No wonder Heritage Auctions premium is so high!

Anyone selling a 7 figure coin is absolutely getting a significant cut of the buyer premium.

 

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But not the buyer .

This coin would’ve had almost a $2 million premium on top of the cost of the coin itself. That’s just insane.

 

So? Premiums shouldnt impact how much a buyer pays. You just factor it into your bid. People like to complain that they were outbid because someone didn't know about the BP or forget etc, the simple truth is the overwhelming majority of the time the other person was just willing to pay more

 

Looks like they got you COMING and GOING.

 

If you are SMART, however, you can do well on Heritage because unlike most auction houses, they put the previous auction results right up front, so you can avoid being clipped by the market. Additionally, the coins at Heritage are very rarely fake or altered. What you are buying with Heritage is an informed market place that is regulated.... unlike say Ebay where it is not just the wild west, but it is almost impossible sometimes to find a coin of a specific type that is not fraudent, ATed, or just overpriced.

 

I have bought on eBay since 2005 and have received only one bad coin. When I receive my purchases, I take certain ones to a jeweler I know and ask him to check them with his XRF gun. The bad coin tested at only 25% silver and the seller refunded my money thanks to eBay's policies.
Even the well known auction houses have had trouble with fakes, and at those auction houses you are guaranteed to pay more, often 20 - 30 % more or even more.
If you educate yourself and use "due diligence" , you can avoid almost all problems on eBay, and eBay's policies will take care of the rest.
Though I have often found myself making fun of eBay, I think I would rather buy there than anywhere else.

There's an old saying " Each to Their Own ".

 

No. Ebay is a zoo. That is just not right. You can, of course, learn to play ebay, after spending hours upon hours avoiding overpriced coins and sharks. You won't succeed all the time, but you can get some fun out of it, if you are into that sort of thing. This doesn't happen with heritage as they have standards in the coins, grading and desscriptions.

 

True, always has been. It is a great learning tool. Lots to study as you say.
Heritage is great. You may pay a bit more on some things but much less risk of having a major problem.
At the same time there are dealers on ebay that I trust just as much as Heritage.

 

Well I am pretty sure they do not have their own printing and manufacturing capabilities (I was a printer for 36 years). The capital required to purchase a press for example capable of these booklets is many millions of dollars alone + countless ancillary pieces of equipment for pre-press, finishing etc.

It is true that the higher the quantity produced the lower the unit cost, but that price plateaus rather quickly and flattens out. Add to the fact that there are no shortage of idle printing companies begging for work and you start to see that owning a full blown print facility is a capital intensive business. On top of that I can't imagine more than 10,000 copies would ever need printed (the universe of worthy potential candidates for expensive coins is quite limited). And that is a small run for any major printing company.

Postage can be reduced by using Business mail, it used to be called Bulk mail. But that too for books of this size and weight is substantial, trust me.

Now look at it this way > HA for example may sell perhaps (oh let's say $10 million in sales they otherwise would have missed out on...just a guess). That would make them $2,000,000. Not chicken feed. Let's say the 10,000 copies with art, prep, printing, finishing and postage sets them back $200,000 which is about right.

Not bad now is it? Plus all that name recognition and good-will associated with a great quality printed piece.

 

All it takes is for two bidders to want a coin and ....ZOOM it's off to the races and so are the fees.

HA knows this and that is why the catalogs go out, trying to generate that "second" bidder.

 

I disagree.

All dealers need to make a mark-up on the items they sell to say in business. If that is your "fee," I agree.

The problem is with the nature of auctions and the way some people bid. Some bid as if there is no buyers' fee. They just keep going to numbers that are sometimes much higher than what you would pay if you were to buy the same item at a bourse.

My advice is NEVER by "a widget" in an auction. Stick to the stuff you can't find anywhere else.

Another factor is the buyers fee that Heritage charges for some things. For political items, their rate is 25%. The other political items auction houses charge 15%. Many times you can buy the same thing for less from those sellers.

Another factor is that many big consignors get more than the hammer price. That means the Heritage is giving them a break to get the consignment.

 

I've been getting the Heritage catalogs since the late 90's I have tossed many out but, have kept a lot of them for reference. If I bought a coin and it's in their catalog in most cases I keep the catalog. They do a great job on their catalogs but, you will rarely see any cheap coins in them. I think I only bought one coin from them for under $100.00 and that was an online auction no catalog. If you only buying coins for less than $200.00 it's not worth the cost of buying their auction catalog. The only auction catalog I bought from them was the first one I received in the 1990's. That was also the first time I spent big money on a coin. However, back then I think the buyers fee was 12.5 %. I've been dealing with them for 25 years and in general never had any problems. The fees are high but, if you include the fees in your maximum bid you will do ok.

 

I keep catalogs in case I run out of toilet paper during the COVID crises, you never know huh...

 

You realize that coins are just one aspect of what they sell and revenue wise is a small part of it?

 

I have priced catelogue production from The Dominca and other places and the cost is TRIVIAL.

 

So that doesn't matter. How prices are marketed affects human behavior and directly impacts how the product sells, and inflates the final price. That is not news. Auction fees are tacked on to the final bidding price because it works to make more money hiding the fees until the final price is set. This practice is not allowed in general retail. This is a different issue, FWIW and was discussed and annoted in another thread.

 

I am seeing 18 to 25 percent buyer premium, even without fancy catalogs.

 

I used to subscribe to Antique Week Newspaper. One of their columnists was an auctioneer and an attorney. When the buyer premium first came into being, he wrote a column in which he said the BP was a part of the sale price, and as such, it belonged to the seller, rather than the auction company. Auction companies quickly figured how to word their seller contracts to make sure they could double dip.

 

There is also Media mail, which would be inexpensive, but potentially slow and some buyers may not get the catalog before the sale.

But every auction catalog I have received has come by Priority mail and you can figure that at $8.50 per catalog.