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Silver Bullet member
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1,134 Posts
Discussion Starter · #1 ·
How common is it for the auction houses to charge the ridicious (IMO) fees on top of the sale price? I talked to the lady there (before bidding) and questioned their internet fee, packing fee, and insurance fee. That was a waste of breath, naturally.

I won an auction for a 1940 Tula M91/59. Here are the charges:

Rifle: $50 (A steal right? Not so fast!!)
Internet Buyers Fee: $7.50 (15% of selling price - do the math on an expensive rifle)
Packaging: $20 (cardboard box/paper/peanuts)
Insurance: $20
Shipping: $22 (guesstimate for FedEx, Adult Signature Req'd)

Sooo....$50 for the rifle, $69.50 to get it to me. Ouch!!

I feel the rifle is worth the total of $119.50, but overall I had to be considerably more conservative in my bidding than I wanted to be.

Another member outbid me and got a nice Tikka M39 for $325, but with the added expenses it was no longer worth the asking price to me once all the additional fees were added on (approx total $435.75). Not out of the ballpark, but no longer a great price either.

Anyways, I guess before you bid on those sites ya better make sure you read the fine print or that sweetheart of a deal may no longer be such a deal!

Did anyone else fill a hole in their collection last night?
 

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Admin Emeritus
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Thats how they make money. Sometimes the best call is to go in person or have a buddy nearby pick up your stuff. I bought a collection a couple of years ago that numbered about 30 pieces at an auction of an estate. The auction company wanted to charge me over 1500.00 to ship the rifles when the real cost was closer to 300.00
 

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Silver Bullet member
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1,134 Posts
Discussion Starter · #3 ·
In this particular case it was an internet only auction so I don't think a pickup in person is possible.

It seemed ironic to me to be charged an "Internet Buyer's Fee" of 15% of the sale price on an internet only auction. :rolleyes:

I also saw a variation in prices charged after just boing back to their site. In a separate place, they quote $15, not $20, for packaging rifles. I also noticed insurance quoted as $5 less there too. Honest mistakes related to updating pricing I'm sure, but too much regardless!
 

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Platinum Bullet member
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3,462 Posts
The fees seem high to me. I work for a auction service which has both live and online auctions. "gunslingerauctions.com" The buyers premiun is a flat 11% on top of the hammer price. We don't charge a "packing" fee. Shipping for a long gun $25 for the first one and $20 each for the additional long guns.

Handguns we send via thw USPS to 03 FFL holders as it's much cheaper than fedex or UPS.

I think the fee charged to you were excessive.

We also don't have a "registration" fee.
 

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Silver Bullet member
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Discussion Starter · #7 ·
I hate to say it, because I'm a long time Tikka M39 hater, but those usually sell for $500+.
I know they do Radom. That's why I say it wasn't worth it to me. I don't want one that bad. I just can't justify the premium price they are going for. I'll just keep hoping I stumble across a seller that doesn't realize the "going" rate on them.

The specific rifle I mentioned has a interesting feature too, beyond the fact that it is a Tikka. I just don't want to steal his thunder (the GB member that got it) if he decides to post it here, which I hope he does.

The fees seem high to me. I work for a auction service which has both live and online auctions. "gunslingerauctions.com" The buyers premiun is a flat 11% on top of the hammer price. We don't charge a "packing" fee. Shipping for a long gun $25 for the first one and $20 each for the additional long guns.

Handguns we send via thw USPS to 03 FFL holders as it's much cheaper than fedex or UPS.

I think the fee charged to you were excessive.

We also don't have a "registration" fee.
Seems much more reasonable Jimmy, I agree!
 

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Platinum Bullet Member
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7,597 Posts
The fees from that particular auction house are usually high, and I think the bids reflected this fact. I also got a 91/59, a 1937 Tula for $75. That is basically half price compared with anywhere else. However, with the fees it will come to nearly double, unless the shipping is consolidated for the three items I won. Mind you, with that company I am not banking on it.
 

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Diamond with Oak Clusters Bullet Member
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74,955 Posts
The fees seem high to me. I work for a auction service which has both live and online auctions. "gunslingerauctions.com" The buyers premiun is a flat 11% on top of the hammer price. We don't charge a "packing" fee. Shipping for a long gun $25 for the first one and $20 each for the additional long guns.

Handguns we send via thw USPS to 03 FFL holders as it's much cheaper than fedex or UPS.

I think the fee charged to you were excessive.

We also don't have a "registration" fee.

Why do the auctions charge a buyer's fee (other than to generate more income) ??

Seem silly to me. I and the people I know figure that into any bids we make.
 

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Gold Bullet Member/Moderator/Administrator/
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27,673 Posts
Name names!

Folks need to know this stuff. It's not libel if its' the truth, so who are these guys charging buyers premiums of 11-15%? Not GB or AA, so who?
thanks!
 

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Platinum Bullet Member
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967 Posts
As LVSteve stated, the fees at this particular auction house are higher than "typical", though they are trying different stratgies to make them less so. In a previous auction, held earlier this year, they charged an 18% premium, rather than the 15% on the most recent, and still tacked on all the other charges as mentioned. They required a CC to register, but would only take cash as payment for the items won. One thing I do want to add to this area though is that 5% of any given buyer's premium listed goes to the service that makes the internet bidding possible. So, if you are charged 15%, 5% of that goes to the service that facilitates the on-line bidding. One heck of a racket that, eh?

After my first time dealing with them I had decided they weren't worth doing business with again...however, I just couldn't resist the HUGE number of nice and more-rare-than-typical offering of Finns they had available.

Bottom line though, yes, you are correct that many houses are "gouging" the buyer. I read an interesting article...I wish I could find it again...on how the "buyers" premium is nothing more than a manipulation to take money out of the SELLER'S pocket and transfer it to their own. The way it was explained, the houses that do this are not only gouging the buyer, but also the seller because the bid price tends to lower and they are still collecting a percentage from the seller on each itme sold. This in, turn, puts LESS money in the sellers pocket and more in the houses.
 

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Moderator / Gold Bullet member
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I've had too many opportunities locally to visit the online auctions lately. But this sounds like the PRK outfit where items magically overnight "grew" reserve prices last time. Is that the case?

I had an interesting experience with Cowan's Auction in Cincinatti, OH recently. Bid absentee on their website on 5 or 6 items. Only item I was high bid on was an impulse purchase. The successful bids on 3 of the other items I bid on were the same amounts as my absentee bid. I understand how the "outs" work, but going 0 for 3 seems odd.

They wanted $65 to ship the small .22lr rifle, a one day ride from OH to TN via UPS ground. The claimed to use an outside company to do the packing and shipping. Further inquiry yielded the fact that the "outside company" was owned by Cowans, they acknowledged this. They claimed a $25 fee for packing and materials. I could deal with the $25 fee, as ground is about $15 from them to my FFL. Where was the other $25 going? Couldn't get an answer, but they shipped it for around $45 after my griping.

It gets better. These packing professionals then sent an 01 FFL rifle to me at my home address. What geniuses! Guess who I won't be buying from again?

SlimTim
 

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Platinum Bullet member
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3,462 Posts
Why do the auctions charge a buyer's fee (other than to generate more income) ??

Seem silly to me. I and the people I know figure that into any bids we make.
The fee is one way the auction company makes money. We don't preform the service for free. ALL auctions charge a buyers premium, usually in the range of 10% to 20%.
For our auction on site bidders are charged a buyers premium of 11%. On line bidders using proxy bid are charged an additional 5%. That 5% goes directly to proxybid.

Auctions are a service as well as a business. Just think before on line auctions there was no way to buy collectible arms unless you actually attended a live auction in person.
The ability to use the internet for auctions expand their collections. This has allowed more collectors the opportunity to "attend" auctions that they would have never been able to attend before.

The most important thin in ANY auction is educate yourself about the fees charged BEFORE you bid on any items at any auction. Call the auction company and confirm their fees If they are not listed.

The bottom line is If you don't agree with the terms and conditions of the auction DON"T BID. It's as simple as that.


There are many costs involved in running a auction.


Employee salaries & related costs
Advertising
Auction location rent
Computer Co fees (such as Proxybid) and web hosting
Insurance
Printing
Equipment
Mailing cost (fliers)
Ect.

When it's all said and done Total profit runs around 10%to 15%.

Which is a fair return for our trouble.
 

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Jimmy's right, I don't have an issue with auction houses up-charging to cover expenses. It's just business. But in my experiences about 25% of auction houses have turned their shipping dept. into profit centers. And I'm not talking about making a decent margin but gouging. You quickly learn who is taking advantage of absentee bidders (in many more ways than just shipping) and steer clear of them. Too bad most of the time I've garnered experience at some expense. But nobody MAKES me absentee bid. Many times it's awesome to be able to bid on rare collectibles that you'd never have access to without doing a lot of expensive traveling. Some of the best pieces in my collection (Lebel M27 and Webley 1910) were found in small, by-the-wayside auctions. Two sides of the coin!
 

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Platinum Bullet Member
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...But in my experiences about 25% of auction houses have turned their shipping dept. into profit centers...
I had a rather lengthy conversation with the owner of a house in FL about this very subject. This particular house is one I deal with alot because they have always been fair and treated their customers well. At any rate, the idea of turning a "shipping department" into a profit center is a subject taught at auction seminars all over the country. Many of the people who have been in the auction business for a long time tend to reject this idea...but newer houses/owners..not so much. Sadly I think we will be seeing this kind of thing on a more frequent basis as the "old school" auctioneers leave the business.

Of course, while the auction house owners are becoming more and more organized, educated, and adapting to the wider marketplace provided by the internet...the auction attendees are not and are falling prey to ever-increasing "beat-em-up" tactics that used to be limited to high-pressure sales arenas. The internet also makes it much easier to get away with this kind of thing. If a local house plays these kinds of games, their supply of people willing to do business with them would quickly dry up. With a nation-wide pool of auction attendees...most inexperienced with the auction trade...it matters less because there is always 2 rubes coming in for every experienced attendee that gets fed up and "votes with his/her feet" by not participating.

I have said this before and will say it agin, there needs to be a place on the internet that rates auction houses and their practices so people can go in with their eyes open...

Yet another $0.02...I'm gonna run out pennies soon if I keep this up :D
 

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Diamond with Oak Clusters Bullet Member
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74,955 Posts
The fee is one way the auction company makes money. We don't preform the service for free. ALL auctions charge a buyers premium, usually in the range of 10% to 20%.
For our auction on site bidders are charged a buyers premium of 11%. On line bidders using proxy bid are charged an additional 5%. That 5% goes directly to proxybid.

Auctions are a service as well as a business. Just think before on line auctions there was no way to buy collectible arms unless you actually attended a live auction in person.
The ability to use the internet for auctions expand their collections. This has allowed more collectors the opportunity to "attend" auctions that they would have never been able to attend before.

The most important thin in ANY auction is educate yourself about the fees charged BEFORE you bid on any items at any auction. Call the auction company and confirm their fees If they are not listed.

The bottom line is If you don't agree with the terms and conditions of the auction DON"T BID. It's as simple as that.


There are many costs involved in running a auction.


Employee salaries & related costs
Advertising
Auction location rent
Computer Co fees (such as Proxybid) and web hosting
Insurance
Printing
Equipment
Mailing cost (fliers)
Ect.

When it's all said and done Total profit runs around 10%to 15%.

Which is a fair return for our trouble.


Charge one fee - to the person selecting the company.
 

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Platinum Bullet member
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3,462 Posts
Sorry cpw, but thats not the way auctions work. It's a service to both the seller and the buyer. Both pay a fee for the service.

Again if you don't like to pay the buyers premium at an auction there is an easy way to aviod it.... DON"T BID!!! and never attend another auction!!

If you do participate don't complain it's your choice.

Why not start your own auction service and do it your way. Only you won't get any consigners. Because you will have to charge them 10-20% more than other auction houses.
 

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Diamond with Oak Clusters Bullet Member
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74,955 Posts
Sorry cpw, but thats not the way auctions work. It's a service to both the seller and the buyer. Both pay a fee for the service.

Why not start your own auction service and do it your way. Only you won't get any consigners. Because you will have to charge them 10-20% more than other auction houses.

Simply it is a device where the auction companies can increase their bottom line from buyers who do not realize that they are going to get stuck for a part of the fee. Smarter buyers figure it into their bids to start with.

I started attending auction 40 years ago. There were no buyers' preminium. If you had been around for a time you would know that is not the way auctions used to work.

But once one company did it and raked in the money, others started following suit. Now even the flea market type auctions charge a buyers preminium.

As for starting my own auction, why should I ? That is not my field and I do not have those licenses. But if I did , you are right that I might not get any consigners. Because I may have to charge them 10-20% more than other auction houses or in the alternative I could not be greedy and just charge the regular sellers preminium. But if I did charge the extra percentage & no buyers preminium, the sellers most likely would end up with around the same amount since the buyers would probably go as high with their bids as they would have, when they figure the buyers preminium into their bid.

Now, in order to increase their net, the auction companies are making money off of packing, shipping and handling. I wonder what their next profit center is going to be.
 
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