How do auction charges work?Before bidding at auction it’s a good idea to spend a couple of minutes getting to know how auctions work and how much things cost.
The auctioneer is not the owner of the items it offers for sale, so how do they make any money?
The answer is that they charge fees to the seller and to the buyer.
All you as the buyer need to do is know what those fees are and then take those charges into account when you decide how much to bid.
The fees to buyers are typically added on to the hammer price.
The hammer price is the value of the highest bid on an item in an auction. When there are no more bids, the auctioneer’s hammer (or gavel, as it is known) comes down and the final bid becomes the hammer price.
Here are some charges that will be added to the hammer price.
This is added on to the final hammer price, as a percentage of it. Each auction house sets its own buyer’s premium so do check their terms and conditions to see how much it will be.
For example, if there is a 20% buyer’s premium then on a hammer price of £100 a further £20+VAT will be added (20% of £100).
This is usually charged only on the buyer's premium rather than the whole hammer price. Check how the auctioneer is applying VAT by looking in 'Important info' section on thesaleroom.com.
VAT is payable on the hammer price only if goods are being sold on behalf of someone registered for VAT in their role as a vendor.
Lots that came from outside the European Union may also incur additional charges: look out for details in the auction house’s catalogue.
Online commission – for slots sold online, thesaleroom.com charges 4.95% on the hammer price. VAT also applies to this charge.
If that all appears a bit bewildering, don’t worry, it’s much simpler than it sounds. The auction house’s invoice to you will include these charges.
And to see what these charges will be before you bid on thesaleroom.com all you need to do is just click on the ‘Additional Fees’ link. You’ll instantly see these charges all added together into one percentage:
Add that percentage onto the hammer price and that’s what your item will cost you. Simple.
You should find that even after those charges are added on you’ll still be acquiring a great item at a price lower than in a high street store.
Are they any other charges?
Occasionally, there are additional fees relating to specific lots in a sale. The lot description and the auction house’s catalogue will display these.
The other main charge to know about is packing and delivery. You can avoid this charge if you pick up your item in person. Alternatively, for a small fee, some auction houses will pack and send it to you, or you can arrange for a courier company to pick it up and bring it to you – the auction house will usually recommend a few firms that pick up from their premises.
Auction houses will make it clear how soon after a sale a lot must be collected and what the storage fees might be for any delay in collection.
If you wish to pick up your purchases some time after the sale, you will need to agree this with the auction house and you may pay a storage fee for doing so. You may also want to consider taking out insurance for the item while it is in storage.
Now you know that the total amount you pay for an item at auction is the hammer price plus the fees and you know where to find out what those fees will be (remember: just click on the ‘Additional fees’ link), you can bid with confidence and get those unique items at a great price.