Hi All,
Just noticed that all of the major auction houses have upped their buyers premiums over the 19% mark (one has even gone to 20%)
I know they also charge a commission to the seller for the lots they sell, so my question to those who do buy at these auctions, do you feel there is a justification for the rates to be this high ?
-rob
Quote from: 'Fr45h3R' pid='33450' dateline='1383555696'Hi All,
Just noticed that all of the major auction houses have upped their buyers premiums over the 19% mark (one has even gone to 20%)
I know they also charge a commission to the seller for the lots they sell, so my question to those who do buy at these auctions, do you feel there is a justification for the rates to be this high ?
-rob
I consider the buyer premium to be an absolute "Rip Off".
The Auction house charges the seller the same amount , So in reality they are getting 36-40% of the sale now.
SHEER greed IMHO.
Walters site "numisbid" only charges 10% on Slabbed coins with NO Buyers premium whatsoever :good:
That is why I imagine he regularly gets auction house prices because the buyer isn't getting ripped of with the 18-20% buyers fees .
With the buyers premium attached to the sale all the buyers will vector that cost into their bids and the coin will sell for less because of it and the vendor will "Miss out".
Quote from: 'Fr45h3R' pid='33450' dateline='1383555696'Hi All,
Just noticed that all of the major auction houses have upped their buyers premiums over the 19% mark (one has even gone to 20%)
I know they also charge a commission to the seller for the lots they sell, so my question to those who do buy at these auctions, do you feel there is a justification for the rates to be this high ?
-rob
I'd agree that some auction houses are gouging the market.
Makes ebay look cheap by comparison.
There is no way I would consign stuff to one of these places.
In terms of the best way to sell high value stuff its a no brainer - get it PCGS graded and then sell via Numisbid.
If one wants to sell high priced coins then can I suggest Coinworks. Belinda Downie charges around 8% I believe it is.
Quote from: 'Goldseeker' pid='33474' dateline='1383562363'If one wants to sell high priced coins then can I suggest Coinworks. Belinda Downie charges around 8% I believe it is.
Is there a "buyers premium " also or is the waived ?
I think the sellers commission for same places is a sliding scale, so as the value goes up, the % comes down.
But for buyers it's fixed.
Quote from: 'Fr45h3R' pid='33450' dateline='1383555696'Hi All,
Just noticed that all of the major auction houses have upped their buyers premiums over the 19% mark (one has even gone to 20%)
I know they also charge a commission to the seller for the lots they sell, so my question to those who do buy at these auctions, do you feel there is a justification for the rates to be this high ?
-rob
I believe the aim is to make a profit after paying wages, leasing or buying premises, paying insurance premiums, printing catalogues etc.
Rather capitalistic of them.
I suspect emu is right; they are in the business to make money. However, if they are extracting more than 35% total commission on sales, maybe they need to have a look at their business model. That suggests very high overheads.
It would be interesting to set up a comparison -other auctions for different types of goods too. A quick search of auction sites showed they are very coy about stating their commission structure. Surely they are not ashamed to advertise their rates?
Quote from: 'JeffH' pid='33494' dateline='1383612039'I suspect emu is right; they are in the business to make money. However, if they are extracting more than 35% total commission on sales, maybe they need to have a look at their business model. That suggests very high overheads.
It would be interesting to set up a comparison -other auctions for different types of goods too. A quick search of auction sites showed they are very coy about stating their commission structure. Surely they are not ashamed to advertise their rates?
Bargain Hunt Auctions advertises 17.6% sellers commission and 17.6% buyers premium unless bidding is on-line in which case it is 20.9% buyers premium. So potentially 38.5% to the Auctionhouse.
Regardless of whether it's a sellers or buyers premium it all comes out of the sellers pocket in the end. Simply because they charge the seller a direct fee and buyers factor the buyers side commission into their bids. Auction houses are in the business of making money (like eBay) and like any business they can keep putting their prices up until their customers (consignors) stop consigning with them. Then they need to drop their prices or go broke.
If you don't like the fees don't use them to sell. Same as some people don't like eBay or Paypal and refuse to use them to sell. If you're buying from an auction house with a 20% buyers commission don't get caught up in the excitement and overbid. Always factor the 20% into your bidding.
Agreed with markn. From a buyer's perspective, the size buyers premium is irrelevant. You just factor the premium into the bid. The auction house could charge 90% commission and I would still participate in bidding. On the othe rhand, consigning coins to an auction house that charges a 90% commission would be an entirely different story.
Eric
Quote from: 'markn' pid='33496' dateline='1383613559'Auction houses are in the business of making money
Its always the middlemen who get rich at the expense of both producers and consumers. Its called capitalism, and for better or worse its the system we have.
If only someone could come up with a better way that actually worked, we'd probably all gladly use it. But the way things are, it comes down to choosing the lesser of the evils of auction houses, ebay or dealers.
Similar with eBay to what Mark said. Always factor in the postage and subtract that from your best price to set your best bid. Some sellers make their profit with the postage markup.
I mean look at Noble's last auction which realized $2.7 Million when I believe they had a buyers premium of 16.5% and now they have increased it to 19.25% meaning an increase in profit from $445000 to $519750 based on that relized total now I think any auction company would have a hard time justifying an $74750 rise in their profit to simply just increasing costs to them. I mean I do economics at school and am about to move into university economics but you don't need me to tell you that they need to work on their business model anyway If it was sustainable then there would be no need for changes in buyers premiums.
Everyone has great points.
I fully support factoring in the buyers premium, and 20% is probably a bit easier in the heat of things. Postage, Insurance, C/C / Paypal fees do add up quite quickly though after the 20% is added.
I also understand companies are out there to make money.
OMF, you haven't factored in the sellers commission in your calculation.
Might be time to start my own Coin auction :)
are we forgetting that there is a 10% GST tax - both for the seller and the buyer
so 20% of all this goes into Uncle Tony's coffers?
or have I got that wrong?
I think the GST is only on the buyers premium.
So 16.5% was actually 15% + 1.5% GST included.
Not sure on the sellers side though.
All of which adds up to why I prefer to source my goodies from the pond or from other collectors like you mob. While middlemen may be a necessary evil, I don't want to be the one to feed them. Much better for the money to go to worthy causes like goldy's holiday or whatever.
I disagree with the concept of buyer's premium, always have. A company shouldn't make clients pay for the privilege of buying coins they offer. If they want 40%, they should just bill the vendor 40%, it's more transparent and has the same eventual effect (the vendor pays either way). The only reason to double dip in this way is to trick vendors into believing they're only paying the seller's comm.
Thanks fr45h3r I forgot about that well then the figures quoted for profit can be doubled anyway robbiegal I believe coins are GST exclusive? I don't know about this for sure so don't quote me but I have seen them only charge GST on the buyers premium as fr45h3r said.
I thought that only bullion coins were GST free
GST can be claimable on the price of a coin bought at auction if the vendor of the coin is registered for GST. You sometimes see catalogues with lots marked that are consigned by GST registered sellers. However, you don't pay more for these lots, your bid price INCLUDES the GST the vendor has to pay.
Quote from: 'robbiegal' pid='33530' dateline='1383642854'I thought that only bullion coins were GST free
Any coins can be GST free if the seller is not required to pay GST.
Yeah,its a jungle,i've never had a problem with Ebay,or Paypal, selling fees,i think they're very fair for the service they provide.I spent half my life buying/selling out of the SMH and sometimes the Courier Mail,and getting those slips in the mail for the weekly insertion fees can be heart stopping.
Edit..whilst on the subject,my Niece is a Journo. and she reckons the Libs. are looking at imposing the GST on Online Internet sales so Ebay buyers could be hit with a 10%(or more if they raise the GST level) tax which would bring Auction houses back into the game.
Quote from: 'Basil' pid='33538' dateline='1383649537'Yeah,its a jungle,i've never had a problem with Ebay,or Paypal, selling fees,i think they're very fair for the service they provide.I spent half my life buying/selling out of the SMH and sometimes the Courier Mail,and getting those slips in the mail for the weekly insertion fees can be heart stopping.
Edit..whilst on the subject,my Niece is a Journo. and she reckons the Libs. are looking at imposing the GST on Online Internet sales so Ebay buyers could be hit with a 10%(or more if they raise the GST level) tax which would bring Auction houses back into the game.
That will be a mess to sort out. I have made purchases from over 20 countries on eBay.au, eBay.uk, eBay.us etc and most are pre-decimals, so who is liable to pay the GST and on which component? After all the packing and post is done in another country and the product is money and used goods.
Might be easy on new electronic goods etc where things can be compared, but the numi stuff seems like John Hewsons sandwich shop fiasco.
Quote from: 'nealeffendi' pid='33558' dateline='1383701561'That will be a mess to sort out.
Ah for the good old days... when you always knew where you stood. You could recognise them by the masks, they'd point a gun at you and state clearly
"Stand and Deliver!".
Now you don't even know who the crooks are, they all wear suits, and you have to wade through piles of legislation and all sorts of rules and regulations, and even then you're not really sure how much you're being robbed for. :(
Quote from: 'Fulvio' pid='33573' dateline='1383713464'they all wear suits
And blue ties.
Sorry, I thought we had drifted into politics.
They can make it very simple if they wish,all transactions on Ebay Oz.,for eg,the buyer is hit with a 10%(or whatever) tax,the goods or services involved doesn't matter. Getting customs,thru Aust Post,to collect GST on goods coming in from O/S Ebay sites is where it gets messy.
Quote from: 'Basil' pid='33577' dateline='1383715988'They can make it very simple if they wish,all transactions on Ebay Oz.,for eg,the buyer is hit with a 10%(or whatever) tax,the goods or services involved doesn't matter. Getting customs,thru Aust Post,to collect GST on goods coming in from O/S Ebay sites is where it gets messy.
Um, no.
1 GST is not payable on used goods (like old coins).
2 Not all transactions on eBay.au involve goods shipped from Australia.
3 When I buy old coins and they include "free post" then how is the postage/handling GST computed and who pays it?
4 What about mixed lots? (like buying some old coins with a new item).
Quote from: 'nealeffendi' pid='33616' dateline='1383783265'Um, no.
1 GST is not payable on used goods (like old coins).
Um no. GST is most certainly payable on second hand goods if the seller is registered for GST. The ONLY time this doesn't occur with coins is when the bullion value of the coin and the retail value are largely the same. GST does not apply to bullion.
Quote from: 'nealeffendi' pid='33616' dateline='1383783265'Quote from: 'Basil' pid='33577' dateline='1383715988'They can make it very simple if they wish,all transactions on Ebay Oz.,for eg,the buyer is hit with a 10%(or whatever) tax,the goods or services involved doesn't matter. Getting customs,thru Aust Post,to collect GST on goods coming in from O/S Ebay sites is where it gets messy.
Um, no.
1 GST is not payable on used goods (like old coins).
2 Not all transactions on eBay.au involve goods shipped from Australia.
3 When I buy old coins and they include "free post" then how is the postage/handling GST computed and who pays it?
4 What about mixed lots? (like buying some old coins with a new item).
1. Yes they are (as long as the seller is registered)
3/4. It's calculated at 1/11th of the price of items inclusive of GST.
Who knows what will happen but the Govt. is looking at widening the coverage of the GST and possibly at a later stage(after the next election?) increasing it to 12.5% or even 15% .Internet trading and giants like Ebay are getting closely looked at so as Hockey said "ëverything is on the table" which is ominous if he survives Graingate.
I will clarify the gst rules for all. My past profession was a tax auditor for the ato. So here it all is. The first part is based on sellers who are registered for gst. No gst is payable on bullion providing it is sold based on the spot price of metal and fair manufacturing, on costs and profits added in. As soon as some other intrinsic value is added the bullion item attracts gst and will at every point there after regardless of what is factored into future sales. All coins that do not fall into the bullion rules attract gst. Auction house fees by Australian auction houses attract gst payable by the auction house. The gst on the coin is payable by the vendor. eBay fees are gst free as eBay is not registered for gst as eBay.com.au is an off shore company that does not trade in Australia. Dealers registered for gst that buy from the public can get an implied gst credit on second hand purchases as well as credits on gst paid to other registered businesses.
Anyone not registered for gst does not pay gst on sales but can not get gst credits on purchases.
I will also say use this as a guide only. Before relying on this speak to the ato or your tax professional as I do not work for the ato anymore.
Thanks!! very much appreciated!
Quote from: 'markn' pid='33626' dateline='1383801878'Quote from: 'nealeffendi' pid='33616' dateline='1383783265'Um, no.
1 GST is not payable on used goods (like old coins).
Um no. GST is most certainly payable on second hand goods if the seller is registered for GST. The ONLY time this doesn't occur with coins is when the bullion value of the coin and the retail value are largely the same. GST does not apply to bullion.
Most sellers on the bay are small timers, so most are not registered.
I bet the avoided Income Tax by those thousands of sellers is huge and would get the ATOs attention if everything is on the table. Might kill the bay as a source of numi stuff.
Quote from: 'nealeffendi' pid='33658' dateline='1383869633'Most sellers on the bay are small timers, so most are not registered.
I bet the avoided Income Tax by those thousands of sellers is huge and would get the ATOs attention if everything is on the table. Might kill the bay as a source of numi stuff.
Given that eBay (and paypal) can and do supply their records to the ATO some of these "small timers" had better be careful :)
ebay are sending sales records to the ATO now
and they were doing that last year
that is why so many were freaking out about the automatic notification of $20,000 in sales to the ATO
although I was told that it is actually the non-declaring businesses who turn over much more that they are after
Quote from: 'robbiegal' pid='33685' dateline='1383890421'ebay are sending sales records to the ATO now
and they were doing that last year
that is why so many were freaking out about the automatic notification of $20,000 in sales to the ATO
although I was told that it is actually the non-declaring businesses who turn over much more that they are after
They've been doing it for about 5 years.
If you've behaved yourself and confessed all to your accountant, you have no problem.
Quote from: 'emu666' pid='33686' dateline='1383890864'They've been doing it for about 5 years.
If you've behaved yourself and confessed all to your accountant, you have no problem.
I think this is a key point. Play above board and you'll be fine. Remember the GST limit is just TURNOVER, not profit. So, even if your little eBay business only makes a thousand dollars profit a month but you turn over $6500 a month then you need to pay GST.
thanks
My understanding is that if your turnover is less than $75,000 per annum (which corresponds to Mark's comment about $6,500 per month) then you don't need to register for GST.
If you are not registered for GST then you can't claim GST credits but you also don't charge any GST on sales.
I have absolutely no worries about coming close to that amount so I treat it as a hobby.
If the ATO wanted to start treating it as a business then I'd be claiming deductions everywhere eg Ebay fees, a proportionate costs on rates and utilities for a room in the house, part electricity, deductions on the computer, mileage to get to the banks, bank fees etc, etc. I wouldn't be paying much tax.
As more and more auction houses move towards online selling platforms the question is the premium still justified in that case, American auction houses suggest it is, having said that their sellers + buyers fees are typically less than australian auction houses.
Quote from: 'dcoin' pid='33696' dateline='1383895806'As more and more auction houses move towards online selling platforms the question is the premium still justified in that case, American auction houses suggest it is, having said that their sellers + buyers fees are typically less than australian auction houses.
As online auctions here become more and more popular in Australia I think you'll find that the room auctions here will need to have a much stronger online element AND lower fees. Or they'll go broke.
We buy quite often from auctions in the USA from auction houses that have beautiful catalogues that they mail for free, a great online catalogue, and a room auction that is very accessible to online bidders. And their premiums are a lot lower than room auctions here.
Quote from: 'Steveqld' pid='33695' dateline='1383895408'I have absolutely no worries about coming close to that amount so I treat it as a hobby.
If the ATO wanted to start treating it as a business then I'd be claiming deductions everywhere eg Ebay fees, a proportionate costs on rates and utilities for a room in the house, part electricity, deductions on the computer, mileage to get to the banks, bank fees etc, etc. I wouldn't be paying much tax.
The hobby vs business argument. Well because you say it is a hobby does not mean it is. There are countless court cases where one transaction was deemed a business. Low turnover does not mean it is a hobby. As a rule of thumb if you buy stuff and resell it with the intention of making a profit on any sort of regular basis you have a business. This is different to buying something for a collection or investment then selling it years down the track. In this case you are probably not a business then capital gains tax might be your issue.
The thing that gripes me about all auction house fees is auction houses get a bigger slice of the pie than I do. I am lucky to make 30% on most things and they get more than me for no cash outlay.
hi Bigfellani just went to your website but you don't have photos of the pre-decimal coins that are for sale or is there something I need to do to get the photos? There's plenty of mint product pics
Quote from: 'Bigfellani5' pid='33706' dateline='1383907493'The hobby vs business argument. Well because you say it is a hobby does not mean it is. There are countless court cases where one transaction was deemed a business. Low turnover does not mean it is a hobby. As a rule of thumb if you buy stuff and resell it with the intention of making a profit on any sort of regular basis you have a business. This is different to buying something for a collection or investment then selling it years down the track. In this case you are probably not a business then capital gains tax might be your issue.
The thing that gripes me about all auction house fees is auction houses get a bigger slice of the pie than I do. I am lucky to make 30% on most things and they get more than me for no cash outlay.
I agree with you and the point related to deductions thus minimizing tax obligations.
My wife was also in the same (former) employment as yourself hence I take her advice and be restructuring it in the next 12 months. I think the question of CGT was discussed either early in the life of this forum or in a previous life and caused some consternation with few real answers. A case of being aware that questions could be asked.
Quote from: 'robbiegal' pid='33709' dateline='1383909370'hi Bigfellani just went to your website but you don't have photos of the pre-decimal coins that are for sale or is there something I need to do to get the photos? There's plenty of mint product pics
Predecimals are not up to date. Have some work to do there. Anyway I can email images to you. Let me know what you are after even if it is not on my site and I can see what I have.
Bigfellani5 lists on ebay that's an auction site.His Website is not an auction site it is his website
Buyers premium ... that's just plain bs
thanks runway
i'll have a look on the bay as well
Thanks for your insight. I'm going to have a look at eBay right now.
Quote from: 'runway' pid='33787' dateline='1384007581'Bigfellani5 lists on ebay that's an auction site.
What is this ebay of which you speak?
I thought ebay was an auction site?
but they get out of it strictly speaking by being a platform for venders/sellers to auction their wares
although I think that auction houses are afforded the same protection - the item is sold via the auction house and not by the auction house
that affords protection, particularly in the case of stolen goods - me thinks
ebay has direct fees applied to the seller both through the selling platform and then a monster secondary monetary source through the almost forced use of their financial arm - Paypal but yes, for the seller and not for the buyer
the fees are hidden from the buyer but the seller has to pass these on somehow to make the figures add up correctly at the end of the month!