The fees and fees agreed before the auction are set out in the auction contract. The percentage amount of the buyer's premium should be at the center of each individual sale, not hidden away in some hard-to-find agreement. Legislators should make this practice mandatory. With the extensive Locate Auctions database, you can search machinery auctions to find all types of machinery being sold, including heavy agricultural machinery and warehouse machinery.
It is important that shipping receipts are given to the buyer as the premium does not cover them and some online auctions may be overcharging both parties. I have also seen how a purchase premium of 30% is added so that the auctioneer can obtain a 60% commission in an auction. These costs include renting the building, heating 26%, air conditioning to make customers feel comfortable during the auction, auction software (to keep track of items for both the seller and the buyer), advertising 26%, marketing, staff salaries, setting up the auction house, time spent taking photographs and creating online catalogs for the auction and general maintenance of electronic equipment. When a company is about to close its doors, it needs to recover some of its inventory, and this is called a business liquidation auction.
Some auction houses, such as Hueckman Auction, only charge a premium to the buyer at their auction house, but don't charge it at auctions held there. The auction house wants to claim 30% and 25% from me from the buyer, in addition to charging me an additional fixed fee to photograph the items, insure them, etc. It is essential for buyers to understand why auction houses choose to implement buyers' premiums. We pride ourselves on publishing only the most reliable auctions and you're sure to get a great deal whether you sell or buy.
Some auction houses try to be creative and call it something like “service fee” or “commission”. You charge the costs to the SELLER and it's up to the auction house to get the best possible price that day for an item. More sellers with rarer, more interesting and high-value items would be motivated to sell with you since they would keep a greater part of the selling price and, by having MORE variety of items per auction with no buyer's premium, you'll attract more buyers. I understand that auction houses should make a profit but I think it should be the seller who pays the buyer's premium (and any additional costs) for publishing an item.
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