What is a
BUYERS PREMIUM ?
If Bidder-Sweet were to absorb the entirety of these costs, it would shrink our margins to a point that we simply would not be able to offer auction services to the public. Further, if Sellers were expected to incur 100% of the costs, they would find their opportunity for profits reduced to a point where few would offer their property for public auction. And as you can expect, if Buyers were required to take complete responsibility for these costs, it would defeat the purpose of going to an auction-To purchase quality merchandise at a bargain price.
So in order to ensure the auction benefits all parties–we all share the costs.
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So how do you, as a bidder, account for the “Buyer’s Premium”?
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Determine what the “Top Price” is that you want to bid on an item. (Example) Antique China Set - $100
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Determine the “Buyer’s Premium”. (Example) At this Sale: 10%
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Subtract the “Buyer’s Premium” amount from your “Top Price” (Example) $100 x .10 = $10 | (Top Price) – (Buyer’s Premium) = (Your Highest Bid) or $100 - $10 = $90
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Checkout: Should you win the Antique China Set for a bid of $90 you will be charged $90 for the item with a $9.00 Buyer’s Premium, leaving a total bill for the item of $99. See, you have already saved a dollar!!
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Sales Tax: According to State Law we must charge sales tax commensurate with the local County tax rate. This amount will be added to your final bill.
A “Buyer’s Premium” or a “Bidder’s Premium” is a tool auctioneers use to help defray the costs associated with the auction. Just like retail stores, there are overhead costs incurred during an auction that must be absorbed by one or more of the three parties involved (Auction Company, Seller, Buyer). Whether a buyer realizes it or not, they pay this premium at any retail store as the costs are included in the purchase of any item. Auction companies cannot do this as the value of the merchandise is not determined until the moment of sale.