IT'S WHAT I (USUALLY ALONE) THINK:
AUCTION COMMISSIONS AND FEES
In the June 2019 issue of the AMERICAN STAMP DEALER AND COLLECTOR a contributor wrote about auction commissions – both the buyer and vendor commissions. He made a good case for the vendor commissions. Please permit me to relate how I handle these.
The larger auction firms have an office (or building), perhaps a warehouse, a staff, a computer system, and much more. Their operating costs are huge. They need high commissions and fees to cover these. Yes, they also handle quite of bit of material.
My basic vendor commission is 20%. I ask that all vendors provide a description of the material and a START PRICE. Who else but the vendor knows the material?
I do spot check the descriptions provided. If I find an error, I advise the vendor. For one vendor, there was a high level of returns from the buyers. I now check most of his lots. His commission is higher.
If the vendor provides an MS WORD TABLE with the above and other information, I will reduce the commission. Over a period of time, if a vendor supplies many lots and the value is high, I may reduce the commission.
One vendor used to write long detailed descriptions. These would have been better as articles in philatelic publications. Others give me just the basic information, forcing me to do some research.
One vendor provides so much information on the MS WORD TABLE that I need only copy and paste the table into my database. That vendor gets a big discount.
I edit or revise the descriptions to fit the NEGEV STYLE. This was established by Michael Bale who started NEGEV in the 1950’s. I took over in 1999. Since then, I have modified the style a bit.
If I feel that the START PRICE is wrong, I advise the vendor. We then come to an agreement.
The buyer’s commission is 16%. If a buyer uses a credit card or PAY PAL, there is a 4% surcharge on the total invoice.
Some auction firms add on a $2 per lot handling fee and an insurance fee. I do not. Unless the shipment to a buyer is bulky, I will add on at most a $2 fee for the entire shipment.
One time, I wanted to bid in an auction for a low-priced item – under $35. By the time the buyer’s commission, handling, insurance, and postage were added, the price did not justify buying the lot. (I bought it anyway.) To counter this, I added a LOW PRICE section in the auction. Though there is no commission, the postage (and surcharge) is added. However, photos are only on the web site and the lots are sold AS IS.
These commissions go to cover my expenses.
As I work out of my house, there is no office rental. I use my desktop and laptop computers. As I do this mostly on my own, I do not have a staff. My wife and next-door neighbor help with the mailing of the catalogues and other non-technical issues.
My major expenses are insurance, postage, printing, and the web site.
I negotiate the insurance rates each year. I purchase enough to cover my stock, shipping, and the shows I attend.
As to postage, I use discount postage. This is good, except that my neighbor does not like the LICK AND STICK stamps, preferring the SELF STICK. I end up doing the TSLS.
[TSLS? At INTERPHIL 76, I ran the American First Day Cover Society booth. We made many covers using the US PS 1976 Bicentennial souvenir sheets. Separating the stamps was not easy. We coined the term TEAR AND SWEAR, LICK AND STICK. If one ripped a stamp, one swore. The stamp was then licked and stuck on the cover.]
My printer is very reasonable. He is fast and very good.
In order to cut mailing and printing expenses I have a hybrid system. If I have a client’s e-mail, they get an e-mail when the web site is up. This is followed by two other e-mails sent about 10 days and 3 days before the closing. I may also send them a letter in the mail.
To make the catalogs smaller, I only place key photos of each lot in the catalogue. For some lots, additional photos are on the web site. If a bidder wants more photos, I will send a limited number by e-mail at no charge. There will be a modest charge for these by mail or a large number of photos.
Hard copies of the catalog are only sent to clients for whom I do not have e-mails, those who requested one, and vendors. I have some very good clients who do not have computers. If a client does not buy anything over 3 years, I ask them to pay a small fee of they want to continue getting the catalogues.
My webmaster charges a yearly hosting fee and posting fee for each sale. Earlier in 2018, I had my web site (NEGEV.STAMPCIRCUIT.COM) modernized. I can now upload special items and change information as needed. Yoav Kremener and is staff (of STAMP CIRCUIT) did a great job.
I try to keep my costs as low as possible. These savings are passed on to the vendors and buyers.