New auction started today… with a shiny new 20% buyers premium.
this was the only auction I used to regularly check because new ones started frequently and there was no premium to the buyer. yeah, it ended up being a lot of repeats from previous auctions but every once a while a good deal would show up with very low bid numbers.
Wouldn’t you just accept that 20% is part of the price, work out what a bottle will cost you all in and bid accordingly? It is not a crime for a business to make a living.
I don’t get it, wouldn’t you just lower your bids by 17%? What’s the difference to the buyer between bidding $120 and paying no premium versus $100 and paying a 20% premium?
What I dont understand is why are they allowed to charge seller fee for an item then charge a buyer fee for the same item. Looks like double dipping.
What is their seller’s fee now?
I agree with Adrian: just bid less.
As to charging both seller’s and buyer’s premiums: Their business, they can do what they want. They do have to compete with other auction houses.
are you talking about tcwc.com?
I could do that, but the reason it was the only auction site I frequented was because I didn’t have to do exactly that. not to mention that it doesn’t really look like they adjusted opening prices on this auction accordingly to allow it to be a flat transition. although ill admit I didn’t dig incredibly deep for that
yes. at least their associated auction site
The title sounded as if the business shuttered, not the bidders.
That’s what wined.com does also. They need to have the capital to pay for employees to handle the wines, manage the warehouse, etc. I’ve found that as long as I factor the buyers premium & shipping into the cost it still allows me to have a figure I’m willing to pay.
The auction site is free to do what it chooses and the decision is sensible and likely justified for them, but Matt has a point.
He could lower his bid by ~ the buyers premium % and end up in the same spot only if we’re dealing with a wholly efficient market where everybody else does the same thing. We all know auctions are efficient in the sense the everybody gets a shot to win, but innefficient in that not everybody will lower their bid amount by the new buyers premium %. Some people just gotta own that wine, buyers premium be damned. And some still (I know them) don’t really factor the premium into the equation when they’re placing a bid. They know it’s there but they just see the amount they enter as their bid. Most will behave rationally and won’t do this, but enough will and that changes things.
In the real world the end result is Matt ends up winning less wine than he did before, or he wins the same amount but pays more. Nothing wrong with that but that’s the reality.
Huh. Tried to check out the auction and it wouldn’t let me as it said my clock is ahead?? Weird.
I have known the folks @ tcwc for many many years, both on the auction side and retail. Their no buyers premium was something they were very proud of and 15 years ago their actions were much more substantial. I haven’t followed their auctions recently but the last couple I have seen have been fairly lean. A lot of regurgitation from their consignment inventory. They must have a good reason to go from zero to 20, but void of any other changes/enhancements I don’t see how this moves the needle much in a positive direction to grow their auction business. Let’s see. I have dealt with them enough to give them many benefits of the doubt. I just know the max price I am willing to pay all in and stick to it. I don’t bid on wines that another won’t come along soon and tcwc doesn’t really sell those either.
Aren’t there issues with Illinois as a shipment point? I thought something was percolating around with that.
This is how virtually every auction house works from eBay to Christie’s- there will be both a seller’s and a buyer’s premium. The seller’s premium is usually negotiable depending on the size of the consignment. The buyer’s premium is usually fixed for a general category or even for all sales. In my experience it only goes down when lot prices get very high (into the millions)- such as for the semi-annual Post-War and Contemporary Art sales at Christie’s.
Sounds to me like The Chicago Wine Company is just adjusting their business model to adapt to current marketplace expectations. I have not sold there in quite a long time, but in my early days of wine collecting I did a lot of buying and selling there because it was the only viable option. At the time, the only other major national options generally known were Christie’s and Sotheby’s where lot sizes tended to be fairly large as they are now. At The Chicago Wine Company you could much more easily find 1-6 bottle lots, for example, and a couple of times a year they had “Caveat Emptor - End of Bin” auctions where they would sell off-vintage and/or heavily ullaged bottles from good provenance but considered risky for enjoyment due to vintage or ullage. I loved those sales as they were my primary source for first growths and top Burgs in bad vintages so I could experience the full spectrum of what was out there.
In any event- back then they had no buyer’s premium, but the seller’s premium was 28%. It made good sense at the time because houses like Christie’s and Sotheby’s only wanted to deal in large collections. So CWC offered sellers of smaller parcels what was often their only choice, and they lured in buyers with the promise of no buyer premiums. That model has long since become outdated, but was quite brilliant at the time.
The reality today is also that we have a highly liquid market in which most auction purchases are by professionals- be it brokers, private consultants or retailers who are allowed to procure wine in this manner. So most bidders are going to wisely take into account all premiums and other costs in placing bids that generally leave things hammering in a fairly tight range for a collectible/hobby category item that moves predictably. But even so, it would be very hard to convince a seller today to give up 28% of sales even if the seller is starting with what should theoretically be items that sold for a higher hammer price since there was no buyer premium. And there is some reason in that since not every bidder is so meticulous with the math and will often bid not considering costs after the fact- thus leaving the seller vulnerable.
At one point, a number of CWC guys were over at Hart- maybe still there, I do not know. But all along it has been a reliable and classy operation. If this change is an attempt to get back into the auction marketplace more actively, I would certainly welcome their presence.
No, it’s not double dipping. It’s simply splitting the transaction costs (the auction house’s take) between the parties.
In any sale, transaction costs such as commissions are always shared by the parties, buyer and seller. Not necessarily 50-50, but never 100-0. This just brings the nominal charges more in line with economic reality.
In the auction business, I assume the starting point it to get consignors, and it will be harder to do that if you charge them a higher commission than competitors because you charge buyers nothing, even though in an economically rational world that shouldn’t matter to the consignor because an auction held without buyers’ premiums should proportionally higher bids. So I can see why it would be hard to maintain a policy of 0% buyers commission.