When Proxiblog launched in May, one of our goals was to persuade auctioneers that a 15% or lower online buyer’s fee would spark competition. At the time, only 11 auctions that regularly sold coins met our Honor Roll standards–low buyer’s fee, expandable pictures of obverse/reverse, and quick inexpensive shipping. Now 44 do. Booyah!
Auctioneers know about competition. It’s the lifeblood of the industry–so much so, that the Discovery Channel televises a reality show, “Auction Kings,” chronicling the entire process from consignment to sale.
Proxibid has expanded the auctioneering experience by adding online bidders to the customer base offsite around the world. Now competition is not only about scheduling a sale at the right time for maximum attendance, hiring a caterer or staffing a concession stand, and canvassing newspapers in search of estate sales (although these activities are still mainstays, to be sure); it is also about allowing online bidders to compete for high-price lots without worrying that the buyer’s fee is exorbitant.
If you’re still catering to the onsite crowd by not charging a buyer’s fee, even though physical set-up costs and advertisements may justify it, then you’ll be selling your high-priced items to local folks who had better have deep pockets given the rising price of gold and silver. An onsite bidder will pay melt value of $1600 for a low mint-state Saint Gaudens Double Eagle whereas an Internet bidder would pay $1920. Better for the Internet bidder to shop at the local coin store or order bullion direct from the US Mint!
However, if the onsite crowd is charged a 10% buyer’s fee and the Internet clientele a 15% fee, that rather evens the playing field and invites competitive bidding. You probably won’t get the $1920 for that coin. But you’re apt to get higher bids approaching or surpassing $1800.
Do the math: $1600 to an onsite bidder in a session without a fee compared to $1800 from an Internet bidder with a modest buyer’s fee.
We explained this to an established auction house, Dudley’s Auction Service, a few hours before her live Proxibid session began this week. To our surprise, the house posted this notice:
5:13pm-BUYER’S PREMIUM JUST LOWERED to 15%!!! The auction is in 2 hours and we have JUST lowered the online buyer’s premium from 17% to 15%! Don’t miss out on this great deal 🙂
We wish other houses charging 18% would consider lowering their fees to spark competition, such as Dudley’s just did. Some yet unlisted Proxibid auctions that sell coins regularly also have large staffs canvassing the country for the best consignments. They have big advertising budgets augmented by expert use of social media. Their competition is Heritage Auction, Teletrade and other up-and-coming start-ups, such as Great Collections.
Skilled at numismatics, they’re banking on getting choice consignments of the most popular series, denominations and ultra rare coins. There’s always a market for that, so they can charge 18%. (Note: Heritage and Teletrade charge 15% and Great Collections, 10%. Also, Teletrade features no-buyer’s-fee auctions every Tuesday.)
They’re taking business away from high-buyer fee houses on Proxibid.
There are many ways to earn a profit selling coins to onsite and online bidders. We just happen to think a few small enhancements, such as Dudley’s Auction did this week, coupled with excellent customer service, is less costly, more effective and, in the end, profitable.
Proxiblog is an independent entity with no connection to the auction portal Proxibid. Our intent is to uphold basic numismatic standards as established by the American Numismatic Association and the National Auctioneer Association and to ensure a pleasurable bidding experience not only on Proxibid but also on similar portals such as iCollector and AuctionZip.