Investor or Collector?

The big auction houses do not consider the "buyer" to be a customer, though of course they want the buyer to be happy. Their real customer is the seller or consignor. Without consignors with highly desirable material to consign, the auctioneer is pretty much out of business, no matter how happy his past buyers have been with low buyer's premiums etc.

The boost over the past few years in the buyers premium to 17.5% has helped the auction houses to offer more attractive terms to consignors, who are the real lifeblood of the business. The good news is that if you assemble a collection that is extremely desirable to the marketplace, when it's time to liquidate you can fully expect the big auction houses to offer you consignment terms that includes more than 100% of the hammer price. (Something that was not common until the past few years).

And so, the real challenge becomes not the buyers premium, or even how low a price you get the item for. But rather it is how well you predict the value of your acquisitions down the road, and to what degree the coins will be in demand at the time you resell. If you have hot-hot-hot material, getting promised 104% of hammer would not be an irrational expectation. And if the coins have appreciated nicely since you bought them, that extra juice when you sell will more than offset the modest increases in buyers premiums that are paid up-front to acquire choice material.

 

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If the underlying asset an auction house is selling has gone up in price, then their fees would still be increasing even if they left their take at 10%. By increasing it to 20% they've managed to double the icing without making the cake any bigger. Plus don't they also get paid by the seller some sort of listing fee, meaning they're collecting on both ends?

 

I agree with you.
I work at a bank and all people want is a free checking account. No one wants to pay $6/mo. for one, even though that helps pay for the services we offer. They want us to service them for FREE. Not sure why people are willing to pay for all other types of services, but at a bank, they get offended that they may get a small monthly charge. I think people got spoiled in the pre-2008 Era where things were free/cheap, and are having a hard time going back to paying for services now...There are more regulations nowadays in all industries, which costs businesses money to adhere to. Therefore, they pass the cost to the customer or go out of business.

 

The bail-out of 2008 has left most people with a bad taste in their mouth when it comes to banks. For the life of me, I don't understand why people continue to bank at some of the institutions that were the worst offenders during the meltdown.

If an auction house sold-off a bunch of coins that they never had to begin with, and then the fraud was discovered, do you suppose the tax-payers would be expected to bail them out? Not likely.

 

I have a free checking account and I expect to have one from a bank. I have a measily savings account return.

Forgive me if this isn't accurate, but I believe Banks make money by loaning other people's money out at higher interest rates than they pay the "owner" of the funds. It's not their only source of income, but if you're going to only pay me a miniscule interest rate for the funds I have in your bank, then use those funds to get higher returns from other sources, I don't think it's too much to ask to keep it at the bank for free.

Also, most free checking accounts are not interest bearing. Mine is not.

 

My checking accounts business and personal are both free and both interest bearing. As long as I keep a minimum $2500 balance. As well as use my debit card 15x a month. Both of those are easy for me and I usually make a couple hundred bucks in interest a year. My bank is great though a independent Maine based bank that is not part on major corporate banking. Only downside there's no branches outside the state of Maine

 

You are the kind of customers banks are willing to work with on free accounts. You scratch our back we scratch yours. It is the customers to come in and demand a completely free account just so they can cash their check and keep $20 in the account. Not every bank, in fact not even a majority of the banks received any bailout so they should not be looked down on. Interest rates are historically low and so the banks are fighting to make much off of any kind of interest. That's why they don't pay out much interest. Nothing coming in, so nothing going out. I may work at a bank and sound like I am sold out for banking, but I am tired of it and want out. I am just speaking from an insiders point of view.

 

Yes, but as @drathbun pointed out, they don't need to increase their percentage to do that.

If the wholesale price of a widget doubles from $10 to $20, and a reseller has a 100% markup, their profit also doubles from $10 to $20. If they say "everything's getting more expensive, so we need to raise our markup to 120%", they're trying to put something over on you -- unless their expenses are rising more quickly than the rate of inflation, which would seem to indicate that they aren't controlling their expenses properly. Or maybe that they're needing to cover health care, or put a kid through college.

Me, I've found a cure for "wishing prices were where they used to be" -- pick hobbies that rely heavily on electronics. For the price of my first computer, I can now buy one with exactly one million times as much RAM, and at least ten thousand times the speed. Even if you're not a computer geek, find some old catalogs or ads from the 1970s and look for a 40-inch TV...

 

...assuming that the dollar volume of material that they auction remains constant. But if costs are going up across the board, presumably the cost of the stuff they're selling is going up as well, and so is their commission (at a given fixed percentage).