John Cross Ltd Auction

[Clipgate]

Before making judgement on any business model of any operation consider leverage, over trading and operating costs, plus stocking finance.
Many car or for that matter motorhome operation can be not all it may seem from the outside.
Add in leased/rented sites making them likely to be men of straw, should you need to take redress.
I have no knowledge of the operations base business model, however a lesson to anyone entering into a major purchase is take care, or as my father said " caution all blouse and no knickers".

 

[GJH]

That is even more of a scam doing it that way.
I wonder whether it is even legal charging commission on the hammer price + vat to increase the commission price & more vat ?
Smells to me?
doing it that way you would now be paying £143,20 by the time they have striped up the seller they'll be making more than they are.

Why is it a scam when they tell people up front what the terms are?
All auctioneers charge commission and the government requires the payment of VAT, so nothing illegal about it.

 

[chaser]

Why is it a scam when they tell people up front what the terms are?
All auctioneers charge commission and the government requires the payment of VAT, so nothing illegal about it.

This buyers premium is a total rip off, if you bid to buy at a price, that should be it, what else are you paying for?

 

[GJH]

This buyers premium is a total rip off, if you bid to buy at a price, that should be it, what else are you paying for?

Commission is the payment for the auction house to do its job (wages, other costs and profits). That is what you are paying for.
When you buy from a shop the "commission" (the amount the business needs to cover wages, other costs and profits) is included in the price set by the business on top of the base price of the article.
The approach has to be different because the base price at auction isn't known until the hammer goes down.

 

[chaser]

Commission is the payment for the auction house to do its job (wages, other costs and profits). That is what you are paying for.
When you buy from a shop the "commission" (the amount the business needs to cover wages, other costs and profits) is included in the price set by the business on top of the base price of the article.
The approach has to be different because the base price at auction isn't known until the hammer goes down.

Yes but they have already got their commission off the seller

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[GJH]

Yes but they have already got their commission off the seller

It depends how the auction house works. Some use only a seller's premium, some only a buyer's premium and most use both.
As long as they are honest about it up front what does it matter?

 

[chaser]

It depends how the auction house works. Some use only a seller's premium, some only a buyer's premium and most use both.
As long as they are honest about it up front what does it matter?

There is an auction house near us , you can either go or bid online, but when you work it out you have to budget half as much again if you buy, they are already drawing off the seller so in actual fact they are getting near enough the same as the seller. Crazy, in the old proper marts it used to be about 5% or less to the seller.

 

[GJH]

There is an auction house near us , you can either go or bid online, but when you work it out you have to budget half as much again if you buy, they are already drawing off the seller so in actual fact they are getting near enough the same as the seller. Crazy, in the old proper marts it used to be about 5% or less to the seller.

What you are saying is that you know the terms up front.
That makes it simple then - if you don't like the terms then don't bid. Go somewhere else.

Of course, if you want to limit what sellers make and keep prices lower for buyers (in order to attract buyers to your business rather than that of your competitors) you can do as supermarkets did to farmers with products like milk a few years ago. After all, who cares if a few sellers go bust so long as buyers don't have to pay?

 

[chaser]

What you are saying is that you know the terms up front.
That makes it simple then - if you don't like the terms then don't bid. Go somewhere else.

Of course, if you want to limit what sellers make and keep prices lower for buyers (in order to attract buyers to your business rather than that of your competitors) you can do as supermarkets did to farmers with products like milk a few years ago. After all, who cares if a few sellers go bust so long as buyers don't have to pay?

Where else do you have to pay extra over the price to buy something, even eBay doesn't do that.
Just had a look at Mathewson's car auctions, off the Tele their maximum commission is 7.5% and no buyers premium, so how do these other places justify 50% or more.

 

[GJH]

Where else do you have to pay extra over the price to buy something, even eBay doesn't do that.
Just had a look at Mathewson's car auctions, off the Tele their maximum commission is 7.5% and no buyers premium, so how do these other places justify 50% or more.

I thought you would have realised that from your days in business
Any business looks at the cost of its raw materials (in the case of an auction lot what the house ends up paying to the seller) and the cost of other business expenses. It decides how much profit it needs on top and sets the selling price accordingly.
With the uncertainty of auction hammer prices that has to be done in the form of premiums and, as said earlier, some use only a seller's premium, some only a buyer's premium and most use both. Charge either sellers or buyers too much and they may take their business elsewhere.

How do some justify higher premiums? The same ways in which some shops justify higher prices.

At the end of the day, though, if you don't like it don't bid. As with any other company, if the prices means that the auction house can't attract enough sellers and enough buyers it will go out of business.

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[chaser]

I thought you would have realised that from your days in business
Any business looks at the cost of its raw materials (in the case of an auction lot what the house ends up paying to the seller) and the cost of other business expenses. It decides how much profit it needs on top and sets the selling price accordingly.
With the uncertainty of auction hammer prices that has to be done in the form of premiums and, as said earlier, some use only a seller's premium, some only a buyer's premium and most use both. Charge either sellers or buyers too much and they may take their business elsewhere.

How do some justify higher premiums? The same ways in which some shops justify higher prices.

At the end of the day, though, if you don't like it don't bid. As with any other company, if the prices means that the auction house can't attract enough sellers and enough buyers it will go out of business.

As many small decent auctioneers have I'm afraid.

 

[Silver-Fox]

as my father said " caution all blouse and no knickers".

That seems a positive situation to me

 

[Spriddler]

I assume the top end fine-art auction houses don't charge such high commission on their million or multi-million pound lots.

Does eBay charge commission to sellers and buyers?

 

[GJH]

As many small decent auctioneers have I'm afraid.

 

[Simon Meadwell]

Cant understand why she didnt sell the business or offer it to the staff to buy it out.

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[chaser]

Cant understand why she didnt sell the business or offer it to the staff to buy it out.

Presumably she will still have the premises, probably a lot more things to use it for , for more money with less hassle.

 

[sedge]

The professional auctioneers on things like the Antiques Roadshow (or rather the announcers) always warn you of this - to remember the buyers premium and VAT, before deciding how much to bid, when trying to buy anything at auction. So if you are prepared for it to actually cost you £100, restrict your maximum bid to £65 in this case.

I think if the item you're selling is worth millions - you negotiate the seller's premium with the auction house! though daresay eg Sothebys have a sliding scale which naturally they'd quote to start with. If you're not happy paying that then you'd ask another house to quote. But no good asking eg Bloggs & Smith Estate Agents & Auctioneers in Bedworth to sell the Rembrandt really as they'll not attract the right customer base for the item.

 

[Spriddler]

But no good asking eg Bloggs & Smith Estate Agents & Auctioneers in Bedworth to sell the Rembrandt really as they'll not attract the right customer base for the item.

When I moved to an old cottage I found a Rembrandt and a Stradivarius in my attic but the local auctioneer said they had little value as Rembrandt made lousy violins and Stradivarius was a crap painter.

 

[westhamman]

Just looking Sotheby's, charge standard 10% sellers fee, buying 25% on items up 300,000, 20% on goods up to 3 million, 13.5% over 3 million I would presume you would pay vat on their commission..

 

[Brains]

Cant understand why she didn't sell the business or offer it to the staff to buy it out.

or wind it down rather than auction the lot.
She would have made a lot more money that way.
It may have taken 6 months to do, but unless she has a very fast acting buyer for the land, that would have been time enough.


I have two friends who worked for a large retailer with multiple shops, not just in the UK, but worldwide.
Rather than sell the lot off (warehouses full) at auction, they wound the company down, they shut the shops as fast as they could, and rather than having 'closing down sales' they moved the stock, from all over the world, to two shops in London where it was sold at the proper price.

The entire operation took about 18 months and because it was wound down rather than closed down the staff were laid off with a lot of warning and the company made a lot of money, their final two years of results were better than the previous 5 years.

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[Jim]

or wind it down rather than auction the lot.
She would have made a lot more money that way.

I've no idea and I'm guessing, but I imagine there are a number of probate aspects to consider; also its common for beneficiaries of a will to want to sell assets quickly and realise them.

 

[Spriddler]

She would have made a lot more money that way.

Without knowing the facts (which are no business of anyone else) speculation is pointless.

I'd have a lot more money if I hadn't been married twice.

 

[Puddleduck]

It depends how the auction house works. Some use only a seller's premium, some only a buyer's premium and most use both.
As long as they are honest about it up front what does it matter?

Our local auction house has both sellers and buyers premiums, both subject to VAT.

When going to an auction I work out exactly what I am prepared to pay taking into account of the commission and VAT. Sometimes there is VAT on the hammer price (as said before if being sold on behalf of a business registered for VAT) but this is always stated on the sale particulars and re-iterated by the auctioneer.

The auction house premium does vary depending on the hammer price.

I think auction houses have more costs than one would expect - not just property costs, staff costs but also insurance and security.

As long as one is aware of the on costs before bidding (and these costs are clearly set out in the catalogue) then I can't see how it is a scam.

Seller's premium helps pay for advertising, photography etc - the auction house has to shell out for this even if an item doesn't sell. Buyer's premium is the profit for the auction house and the better the auctioneer then the more the item will sell for and the more the auction house will make.

 

[gus-lopez]

Why is it a scam when they tell people up front what the terms are?
All auctioneers charge commission and the government requires the payment of VAT, so nothing illegal about it.

tre bt there ever sed to be a 'bers premim' ow they want it both ends

Commission is the payment for the auction house to do its job (wages, other costs and profits). That is what you are paying for.
When you buy from a shop the "commission" (the amount the business needs to cover wages, other costs and profits) is included in the price set by the business on top of the base price of the article.
The approach has to be different because the base price at auction isn't known until the hammer goes down.

The shop isn't charging the supplier to sell the product, only me for buying it..

I assume the top end fine-art auction houses don't charge such high commission on their million or multi-million pound lots.

Does eBay charge commission to sellers and buyers?

Yes it is on par with all others.

 

[chaser]

tre bt there ever sed to be a 'bers premim' ow they want it both ends

The shop isn't charging the supplier to sell the product, only me for buying it..

Yes it is on par with all others.

There is no buyers premium with eBay, what you bid is what you pay.

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[Jim]

There is no buyers premium with eBay, what you bid is what you pay.

Traditional Auctioneers cover their costs and make their profits on sale commision and buyers premiums. Its been that way forever.

 

[chaser]

Traditional Auctioneers cover their costs and make their profits on sale commision and buyers premiums. Its been that way forever.

No they don't, buyers premium is a new thing, I have been buying and selling stuff in markets for 60 years and never paid any buyers premium it's only this last 10 years that this buyers premium thing has took off.
Most agricultural auctions still don't have it.

 

[grumps147]

There is no buyers premium with eBay, what you bid is what you pay.

From a buyers point of view that would be ideal.

put yourself in the shoes of the widow and their family, dealing with grief, their world just turned upside down. Now imagine them doing nothing else for god knows how long creacting eBay advertisements as a business - I am sure irs only individuals don’t pay a fee To them.

so how much simpler just to hand the lot over to an auction house to manage for you.

I know if I was in that position what I would want my wife to do, auction house every time.

 

[Jim]

No they don't, buyers premium is a new thing,

Yes they do. I've paid buyers premium for as long as i can remember. From Wikipedia

The modern buyer's premium was introduced at 10% by Christie's and Sotheby's in London in September 1975.[5]

Percentages have varied widely, but have risen sharply with time. Early on, Christie's charged 14% in the Netherlands and Belgium, while Sotheby's charged 16% in Switzerland (10% to foreigners), 11% in Monaco and 16% in the Netherlands. There was no fee at Christie's sales in Australia and Sotheby Parke-Bernet auctions in South Africa. Christie's also charged no fees to buyers at its South Kensington house in London and at Edmiston in Glasgow. Christie's introduced a 10% fee to buyers in the United States when it opened at Park Avenue and 59th Street in May 1977. Sotheby's followed in January 1979.[5]

Beginning on 1 January 1993, Sotheby's charged buyers 15% on goods sold for $100,000 or less. Amounts above that were charged at 10%.[6] Christie's introduced the same price regime on 1 March 1993.[7]

I know I said forever, well Roman times is good enough

The buyer's premium was a feature in Roman auctions during the reign of Augustus, when buyers were required to pay a two percent tax on purchases.[4]

 

[eddie]

As a kid I used to help out "humping" stuff around and was a runner on Auction day

Buyers premium was an established practice then and that is 45 years ago

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