Do you Think

[MAULEMALL]

David Hall will bid on this

[WinstonWare]

I don't get it. Who is David Hall?

 

While we're at it. I don't get the buyer's premium either. I mean, you bid on something for x dollars but you pay x + x*y dollars. So my questions are - is y a constant? Is there always a buyers premium? Why are we suppose to except the buyers premium - what is it?

 

Sorry Patrick, I doubt a series of questions is what you were hoping for

[TomB]

Here is the little blurb about DH on the PCGS site for those who don't know-

David Hall arguably understands collectibles markets and how they work better than anyone in the world. He became a full-time rare coin dealer in 1972 and was quickly one of the major players. In the 1980's he was the man behind the major market innovations of the decade; guaranteed buy/sell markets, electronic trading, and his coup de grace, the Professional Coin Grading Service (PCGS). In 1990 David Hall was named Orange County "Entrepreneur Of The Year" by Inc. Magazine. The February 20, 1996 issue of Numismatic News called him "the man who changed the rare coin market forever." The July, 1999 issue of Coinage Magazine named David Hall one of the top "Numismatists of the Century."

Essentially, DH was one of the founders of PCGS and until very recently was the President of PCGS. He would also ocassionally post on the PCGS boards as homerunhall.

 

A buyer's premium (BP) is simply a device to lull a bidder into paying more for an item than the bidder planned, and also for extracting money from the seller. Typically, the BP is 15% and many folks forget about that added percentage during the bidding process. Therefore, they think they are paying $100 for the coin when in actuality they are paying $115, while the seller thinks that getting $100 for the coin was great while dismissing the extra $15 paid to the auction house. The BP is for overhead and is how the auction houses stay in business.

[MAULEMALL]

I don't get it. Who is David Hall?

 

While we're at it. I don't get the buyer's premium either. I mean, you bid on something for x dollars but you pay x + x*y dollars. So my questions are - is y a constant? Is there always a buyers premium? Why are we suppose to except the buyers premium - what is it?

 

Sorry Patrick, I doubt a series of questions is what you were hoping for

What do you meen? I think you did a great job in answering them.Oh and the buyers premium is at least $9.00.

[MAULEMALL]

Thanks Tom..

[MAULEMALL]

That is one of the coins PCGS gives you when you join.

 

Obviously The person who joined wasn't too impressed.

[MunkyMan95]

Do You Think

 

Only during the hours of 2 pm and 6 pm

 

[gmarguli]

That is one of the coins PCGS gives you when you join.

 

Obviously The person who joined wasn't too impressed.

 

Back when I was a member, I sold mine and the book they gave and made more than my membership cost.

[MAULEMALL]

That is one of the coins PCGS gives you when you join.

 

Obviously The person who joined wasn't too impressed.

 

Back when I was a member, I sold mine and the book they gave and made more than my membership cost.

When I joined they were giving state quarters...I never even used the free submissions after I found how long it was taking for them to get through.

[WinstonWare]

Thanks for the knowledge Tom. From that blurb, I feel like I should have known. Oh well, one book at a time I guess.

 

RE: The buyers premium. Stated as:

The BP is for overhead and is how the auction houses stay in business

I don't really have a problem with it. The market needs sustenance. Someone had to code the website and update it; someone has to ship the coins; they need offices etc. Similarly, I don't have any problem with paying dealers their ask price or accepting their bid price. The coin market is the service that they provide.

 

But I agree with you that if people get confused into paying more than they thought or recieving less than they thought it's crummy.

[Beijim]

But I agree with you that if people get confused into paying more than they thought or recieving less than they thought it's crummy.

Not to put too fine a point on it, but people who don't understand buyer's premiums, seller's commissions, reserve prices, progressive bid increments, and other basic auction concepts and procedures don't belong anywhere near auctions without adult supervision. This especially includes anyone who would find it confusing that the price they're actually going to pay will be what they bid plus the buyer's premium plus sales tax (if any) plus shipping charges (if any).

 

These concepts are all standard aspects of accepted auction practice, and participants need to understand them in advance if they expect not to hose themselves. All reputable auction houses, numismatic or otherwise, define these concepts and their associated values in advance precisely so prospective buyers and sellers encounter no surprises in the resulting calculations.

 

The eBay model somewhat distorts what most people traditionally understand by the term auction. I suppose this isn't all bad, but it does mean that folks migrating from eBay to live auctions will do themselves a favor if they read up on how traditional auctions work before participating. Watching a Bond flick or two doesn't hurt either...

 

Ultimately, auction houses are like brokerages - they generally make money from both the buyer and the seller on every transaction. The buyer pays a so-called premium in excess of the hammer price, and the seller gets paid the hammer price minus a commission (and expenses, if any).

 

Regards,

Beijim

[TomB]

Beijim hit it on the head!