After reading your commercial auction company contract, you will have come across the term "buyer's premium." You've noticed this charge as separate from the total commissions, sales and handling taxes, and other fees the auctioneers may charge you. To help you avoid confusion, we'll explain everything about it in the simplest terms possible.
If you read the terms and conditions of the commercial auction closely, you might read something that sounds like "service fee" or even "commission." However, a buyer's premium is mostly separate from the commission, and it's correct to assume that there's no buyer's premium. Still, if you see a sizeable auctioneer commission, then it already includes the buyer's premium.
Total Charging Fees You Can Get
Like commissions, a buyer's premium depends on the final price an item receives after the auctioneers have sold them. Usually, companies charge about 1-15% or up to 25% for highly-renowned auctioneers hosting a bigger event with premium industrial items. But, again, your contract terms and conditions should stipulate this amount. Otherwise, you can ask the auctioning team about it.
Covers Event Costs and Other Expenses
Auction companies charge buyer's premiums because it's legal to do so in Toronto and other countries. However, buyer's premiums typically cover event costs, which explains why bigger and established auctioneers charge highly for highly-populated auctioning events. The more buyers and presentations the event needs, the higher the buyer's premium and costs.
If your contract does not mention anything about a buyer's premium, it's most likely included in the total commission amount. In most cases, the presence of both a buyer's premium and commission rate shows a huge commission rate reduction.
If You're Ready To Sell, We're Ready For You!
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