Christie’s and Sotheby’s made news recently with announcements about raising their Buyer’s Premiums (the amount the winning bidder pays on top of the hammer price of an item at auction).
Per AntiquesAndTheHearts.com, Sotheby’s made the first announcement, characterizing the changes as follows:
“In order to enhance our revenue stream and strengthen profit margins, we are announcing a pricing change of 25 percent on the first $50,000 of hammer; 20 percent on the next $950,000 of hammer; and 12 percent above hammer of $1 million, effective June 1. For over 95 percent of the lots we sell, this change will represent an increase of 2 percent or less in the final purchase price,” continued Ruprecht.
Last week, Christie’s issued their own release with increases, noting in part (per a report by MaineAntiqueDigest.com):
Following a recent business review, Christie’s have decided to increase buyer’s premium as noted. This is to ensure that we remain competitive and that our fees are commensurate with the quality of service we provide. From June 2, 2008, the premium rate shall be an amount equal to 25% of the hammer price of each lot up to and including £25,000/$50,000; plus 20% of the hammer price from £25,000/$50,000 up to and including £500,000/$1,000,000 and 12% above £500,000/$1,000,000.
The following is a listing of the auction houses that hold or have held film and television memorabilia auctions and the current stated Buyer’s Premium fee structures:
Bonhams (see Bonhams.com)
- 20%: On the first £250,000 of the hammer price
- 12%: On the excess over £250,000 of the hammer price
Christie’s (see Christies.com)
United States (Los Angeles, New York):
- 25%: Up to $50,000
- 20%: $50,001 – $1,000,000
- 12%: $1,000,001 and up
United Kingdom (both salesrooms)
- 25%: Up to £25,000
- 20%: £25,001 – £500,000
- 12%: £500,001 and above
Guernsey’s (see Guernsey’s.com, OPB ref.)
- 22.5%
Heritage Auction Galleries (see HA.com)
- 19.5% (22.5% eBay Live)
Hollywood Roadshow (see HollywoodRoadshow.com)
- 13%: Floor
- 18%: Phone, eBay Live Auctions
Julien’s Auctions (see Juliens.com)
- 25% (27.5% online bidding): Up to $49,000
- 20% (22.5% online): $50,000 and higher
Note: An additional 3% was added to the base Buyer’s Premium for the recent Icons of Music sale if bidding online through the Auction Network (LINK)
Profiles in History (see ProfilesInHistory.com)
- 15%: Cash
- 18%: Credit Card
- 20%: eBay Live Auctions
Sotheby’s (see Sothebys.com)
United States (New York)
- 25%: $20,000
- 20%: above $20,000 – $500,000
- 12%: above $500,000
United Kingdon (London)
- 25%: up to GBP 10,000
- 20%: above GBP 10,000 – GBP 250,000
- 12%: above GBP 250,000
Auction House Bidding/Buying Considerations
For those unfamiliar with participating in auction house events, it is important to consider the impact of the Buyer’s Premium, as well as other costs in addition to the “hammer price” (the winning bid amount at auction).
Other costs can be incurred via sales tax and VAT (value added tax), and fees related to customs/importation, depending on the event venue and your place of residence. Of course, if bidding off site (phone, fax, or Internet), shipping costs can be higher than you might expect as well, though some auction houses allow for winning bidders to make alternate, third party arrangements.
Also of note is the different Buyer’s Premium scale based on method of bidding and/or method of payment, depending on the Auction House and their specific Terms.
All of these factors should be investigated and taken under consideration before bidding in an auction, as it can affect the total cost of the item significantly.
As an example, if one were to bid on an item at auction, and win with a $10,000 hammer price, how could these other factors affect the price paid to the auction house?
With Bonhams, the total amount paid would be $12,000 (plus shipping and VAT, as applicable).
The same item for the same hammer price at Christie’s, Julien’s, or Sotheby’s would amount to $12,500 (plus additional costs). If buying online with Julien’s, $12,750.
At Guernsey’s, $12,250 (plus additional costs).
Heritage would charge $11,950 or $12,250 if bidding online.
Hollywood Roadshow would charge $11,300 if present or $11,800 via phone or eBay Live Auctions.
If offered by Profiles in History, the Buyer’s Premium and hammer price would be $11,500 if paying cash, $11,800 with credit card, and $12,000 for online participants.
So without taking potential sales tax, VAT, shipping charges, or any other fees into consideration, a $10,000 win at auction would cost the buyer anywhere from $11,300 to $12,750, depending on the auction house and bidding method (floor, phone/fax, online) and payment (cash, credit card) – an additional $1,300 to $2,750 (13%-27.5%).
Related Articles:
Auction House Buying Considerations, Part I: Overview
Auction House Buying Considerations, Part II: Chandelier Bid Legislation
Auction House Buying Considerations, Part III: Bonhams
Guernsey’s Pugliese Pop Culture Collection Auction: Terms and Conditions
Jason De Bord