Most collectors reach a point in their lives when selling at least part of their collection becomes a must. This may be due to a move or simply too much buying. I’ve sold off large parts of my collections for both these reasons. Choosing the proper auction house has much to do with the success of the sale. Not all auction houses, or auctioneers, are created equal.
I’m sure many of those reading this have already asked “What about eBay?” If one has only a few choice pieces to sell, eBay may well be a wise choice. If one is selling due to a move or because one has become buried in antiques, eBay is definitely not the answer. Listing numerous items on eBay is simply too much work. More importantly, a great number of items will likely not sell at all. While eBay is a great place to shop and to sell a few items, it’s a poor choice when one has a large number of antiques to sell, especially if they are large or heavy. Shipping is a major factor to consider when selling online. Postal rates are not cheap and it costs more to ship many items than they’re worth. Only a traditional auctioneer will be able to sell everything for a collector.
A major factor to consider is the type of merchandise handled by an auction house. Some exclusively sell upper end pieces. Others sell run-of-the-mill antiques and collectibles. Still others handle antiques, collectibles, and general merchandise. Then, there are those who specialize in general sales and handle few, if any, antiques. Many auctioneers don’t sell out of a set location, but sell on-site. The best venue depends on what one is selling. If one has only antiques, one will need a different type of auction than if one is selling antiques and general household items. Auction prices fluctuate wildly, but it’s a good idea to attend a sale or two at an auction house to get an idea of the prices realized.
The commission charged by the auctioneer is an important factor. The range is generally 15%-25%, although there are some who charge outside this range. The auctioneer with the lowest commission isn’t necessarily the best choice. Some auctioneers are capable of realizing higher prices. Such auctioneers can easily be worth an extra 5% or 10%. This is not to say that auctioneers who charge the lowest commissions aren’t worthwhile. The auctioneer who charges the lowest commission may well be the best choice, but keep in mind that cheaper isn’t always better.
A factor related to the auctioneer’s commission is the buyer’s premium. The buyer’s premium is a percentage paid by the buyer. It’s easy to ignore this factor, but failing to do so is a serious mistake. While some buyers won’t give the buyer’s premium a moment’s thought, others will be very aware of the extra cost. These buyers will include the buyer’s premium when calculating their top bid. While the buyer pays the percentage, the end result is money out of the seller’s pocket.
The buyer’s premium is often 10% to 15%. Some auction houses charge a buyer’s premium of as much as 25%. This means that if the selling price is $100, the buyer actually pays $125. If the selling price is $500, the buyer pays $625. If the premium were 10%, the totals would be $110 and $550 instead.
Some auction houses provide a service to buyers in exchange for the premium. Some will carefully wrap purchases and box them. Other auction houses do nothing for the extra charge. To determine if a buyer’s premium is justified, ask what services the auction house provides.
As both a buyer and seller, I’ve always been against buyer’s premiums—period. Auctioneers charge a commission to sell an item. A buyer’s premium turns around and charges the buyer as well. This cuts into the seller’s profit. Some auction houses charge a lower commission because they charge a buyer’s premium. Others do not. I use a simple formula to determine just how much of a percentage I’ll be out when selling my antiques: commission + buyer’s premium = total percentage. For example, if the commission is 20% and buyer’s premium is 15%, that’s 20% + 15% = 35%. As stated before, some bidders will pay no attention to the premium so this formula doesn’t always hold true, but it gives me a good idea of how much of my money the auctioneer will keep. The auctioneer is certainly entitled to a fee, but I like to have an idea of exactly what the fee will be before I sell.
Should sellers avoid auction houses that charge a buyer’s premium? The answer depends on the commission and premium charged, the ability of the auction house to bring in strong prices, and the services offered by the house. In some cases, an auction house that charges a 15% or even 25% buyer’s premium can provide a better bottom line than one that charges no buyer’s premium at all. The bottom line is what is important. Just be sure to take into consideration all the factors that affect it.
Keep track of other costs as well. If one must pay them, advertising costs can be considerable. When I sold off most of my antiques & collectibles, as well as household items, in a general sale a few years ago, my advertising costs ran around $1,000. This is obviously a significant sum, but I was selling so many items they filled an entire school gym. Every piece was mine, so I footed the entire bill. When one is merely one of several consigners, there will most likely be no charge for advertising at all. Advertising is one of the services an auction house provides for its commission. Advertising may or may not be a factor when one auctions antiques. If it is, don’t fail to consider the cost!
Many collectors are shocked when an auctioneer tells them the commission rate for selling their items. While 25% or even 15% may seem like a rather high percentage to anyone not familiar with the auction business, it’s really quite reasonable. Yes, the auction house will make a profit (hopefully). Auction houses are businesses and there is a great deal of work that goes into setting up an auction that most sellers don’t consider. Some auction houses pick up the items to be sold. Even if the seller delivers to their door, merely setting the items out for the sale can involve a considerable amount of time. There is also cataloging, advertising, answering phone calls and emails about items, and more. Most collectors can probably take the amount of work they think an auction house does on their behalf and multiply it by a factor of five or ten. Like many jobs, auctioneering looks much easier from the outside.
The key to selecting the right auction house or auctioneer is to consider all the factors. One can select an auction house out of the phone book at random, but checking into commission rates, buyer’s premiums, prices realized, type of merchandise handled and etcetera will enable one to make an informed and hopefully profitable choice.