ebay's "Buyer's Premium" and Live auctions

[ashlyne]

I came across this in one of the pony auctions I was going to bid on. 

http://announcements.ebay.com/2014/10/ebay-live-auctions-give-buyers-direct-access-to-premium-art-and-collectibles-sales/

Basically, ebay is now participating in live auctions happening in real-time at auction houses.   What I don't like is the "Buyer's Premium", which allows the seller to charge you a percentage of your bid, on top of your bid.   This particular pony auction was listed at a starting price of $10, with a Buyer's Premium of 20%.    That means even if I win the auction at $10 with no other bids, I will actually have to pay $12.  This wasn't vintage rare item; it's a current G4 item that can still be found on the shelves for about $15.   I find it odd that such a common low-price item would even be sold at a live auction. 

I'm wondering if non-auction-house sellers can set up their auctions as a live auction so they can take advantage of the Buyer's Premium.  Does anyone know if ebay sorts out the real live auction sellers from the would-be regular sellers?

[moving to Trader Support ~ thanks, Mirnyj]

[ponyqueen]

Oh my gosh so intriguing! I'm curious to know more!

[ajmeier55]

I saw some yesterday too, on equestrian girl dolls.

[Mirnyj]

Sounds really suspicious. :/ I'm gonna bump this to TS for you.

[ashlyne]

Well I don't think it's a scam or anything, so not sure it belongs in Trader Support...

It's a new thing ebay's doing.  I just want to know if anyone knows more about the process, whether or not they screen for those using it for regular auctions.   

[MikeysGrrrl]

From everything I read on other media sites back a few weeks ago regarding this, my understanding was that it only applies to legit auction houses and not private sellers.

[MiRaja]

In normal auctions, the whole buyer's premium is actually always around.  Ebay is really the only sort of auction place that doesn't have such a thing.  Ebay basically passes on the whole buyer's premium to the sellers which I really don't like.  I wish ebay and paypal WOULD pass on some of the fees to buyers and just make things a bit more FAIR.  But that's a whole nother thing. . .

  I've been on live auctioneers for a few years ( as I can snap up some really good finds for next to nothing ) and yeah, there's buyer's premiums, but you just factor that into what you're bidding.  Not that hard nor is it that big of a deal.  It's like going out to a restaurant and calculating the tip for the server.  Oh, I bought a $50 meal?  That means I need to leave $10!  So, if you're looking at an item you can afford to spend $60 on, you would bid $50, and so on.  If you can't take the time to do the math and factor in the fees, suppose it's on you to pay any extra.  ; 

[ashlyne]

Thanks Mikeysgrrrl and MiRaja for the extra information!   I've never been to a live auction, so the buyer's premium is all new to me.   I personally don't like it (I don't want to have to be figuring tip in the last seconds as an auction goes up and up) but that's just me.   I guess I prefer prices that are straight-forward: no taxes, no haggling, no fees, no premium, just tell me what my bottom dollar is going to be      Figuring premiums is easy when it's a 10% premium on a $50 figure, but when it jumps to $168 and the premium is something like 13%, and my maximum dollar limit is $210, then I'm doing algebra! *lol*    Not a huge deal, but an extra step.

But I get why auction houses need to do it.  They're providing as service as a middleman between buyer and seller.   I can understand that.

Thank you for the information!   

(ps - algebra questions answer:  $185.84      )

[MiRaja]

Thanks Mikeysgrrrl and MiRaja for the extra information!   I've never been to a live auction, so the buyer's premium is all new to me.   I personally don't like it (I don't want to have to be figuring tip in the last seconds as an auction goes up and up) but that's just me.   I guess I prefer prices that are straight-forward: no taxes, no haggling, no fees, no premium, just tell me what my bottom dollar is going to be      Figuring premiums is easy when it's a 10% premium on a $50 figure, but when it jumps to $168 and the premium is something like 13%, and my maximum dollar limit is $210, then I'm doing algebra! *lol*    Not a huge deal, but an extra step.

But I get why auction houses need to do it.  They're providing as service as a middleman between buyer and seller.   I can understand that.

Thank you for the information!   

(ps - algebra questions answer:  $185.84      )

Being a restaurant slave ( hence why I brought up the tipping comparison! ) I can calculate percentages really quickly and I do so with some quick little cheats.  Start off calculating 10%, so, your top bid is $150, 10% is $15.  But the buyer's premium is 15%!  But that's easy, just cut that $15 in half, that's 5%, so, $7.50 plus $15, your buyer's premium is $22.50.  If you're okay with a close estimate, 13% is a smidge under that.  Over estimating can always help, but then 13% is 10% and a little less than a third of 10%.  So, $15, plus $5, = $20.  Easy!    No algebra involved! 

[Ringlets]

Thanks for the info everyone  - ands yes this subject does belong in TS , so thanks for the move  too 
*nods* its a common practise in real auction houses to factor in that percentage when you are bidding -  and ebay should only be doing it there in the real auction houses too. It shouldn't effect any normal ebay auctions etc

[MoondancerMilkyWay]

what's strange to me is that as a seller you forfeit 30% of whatever the highest bid is for the privilege of the exposure from an auction house, and on ebay the fees are usually half that and people still complain.
i haven't been to a live auction so wasn't aware of these "premiums" before so that's interesting to learn for sure! and dont know why a legit auction house would even be auctioning off an item still readily available in stores...

[MiRaja]

what's strange to me is that as a seller you forfeit 30% of whatever the highest bid is for the privilege of the exposure from an auction house, and on ebay the fees are usually half that and people still complain.
i haven't been to a live auction so wasn't aware of these "premiums" before so that's interesting to learn for sure! and dont know why a legit auction house would even be auctioning off an item still readily available in stores...

Most buyer's premiums are between 13%-20%.  They can go higher than that, yes, but it's uncommon.

Also, final value fees may come out to be 15%, but you're also charged a percentage fee of shipping and then paypal gets their cut to.  So, it's at least 20% at the end of the day once everything is said and done with.  People make less on ebay because a lot of sellers are more shop oriented, so there is a lot more overhead because the seller is the one finding the product.  The catch 22 is that the seller is doing all the work too.  Doing all the pictures, the shipping, the ads and listings, etc.  ALL Ebay does really is host and provide a system that barely works on even the best of days.  Ebay's moderation system is lackluster at best.  So, why do they deserve the same if not more fees than an auction house who does all the leg work for their 20% buyer's premium?  The auction house does all the listings, the promoting, the pictures, paper work, shipping, etc. 

[lovesbabysquirmy]

I think it will take a long time for me to accept this news without wanting to spit on the floor.  I always have avoided auction houses like the plague because of all the mark-ups and this isn't going to increase my desire to use EBay's services. 

I always liked Ebay as the "international yard sale" but now that they constantly want their sellers to behave like a brick-and-mortar business, buyers just can't find a cheap deal there anymore.