The Seller’s Bottom Line

Auctioneers and auction companies can charge sellers a sales commission or a buyer premium.  Working with an auction company that charges a buyer premium will benefit the seller because it generates more revenue when compared to a sales commission.

Increased Revenue

Selecting the right auctioneer will impact the revenue that is generated from a sale. An auction company that uses buyer premium will charge the buyer after the final bid.  Since the buyer is charged a fee, the seller is not responsible for paying any fees to the auctioneer.

Dr. Jonathan Wu’s research study states that every percent charged on a sales commission will actually reduce the revenue that is generated for the seller by more than 1 percent.  When the hammer price remains constant, Dr. Wu’s research proved that a buyer premium will generate significantly higher revenue for the seller.

Human Behavior and Revenue

Although research suggests that the revenue generated by a buyer premium will increase significantly when the hammer price remains constant, human behavior can impact the revenue that is generated.  Buyers may estimate their final bid after adding the buyer premium to the bid.

Even if buyers change their bidding strategy, the seller will benefit when an auctioneer charges a buyer premium.  To learn more about how the buyer premium impacts revenue generation, request to read the full report – Learn More