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Old 23rd March 2019, 09:58 PM   #13
A. G. Maisey
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Join Date: May 2006
Posts: 6,675
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Yes I think it is so, I believe there is an element of hidden profit in the packing and shipping of items bought at auction.

But there are other factors too.

If I sell a keris to somebody, it takes me about 45 minutes to pack it, it takes more time to fill in the Customs forms, then take it to the Post Office. If somebody insists on a courier service, it takes even longer. Then there is the cost of packing material. To obtain packing material takes time and vehicle use. There is a very big time element in sending items from one place to another, and trying to ensure that they get there safely. Then, of course we have administration time and overheads.

My professional background is audit, with a foundation of accountancy. If I were advising a client engaged in selling, packing and shipping individual items, all of varying sizes, shapes,value and fragility, my feeling is that I would probably come close to a similar level of cost to customer for provision of this service, as do most auction houses.

If an employee is concerned in any operation, the employer needs to make a profit from that employee's time, or there is no sense in running the business.

It is a very different situation where a private seller is involved, even if that private seller sells reasonably large quantities of goods. The private seller will usually not charge for his time, he will charge just sufficient to cover material costs, and he will usually use a postal service as the carrier, rather than a courier, mostly he does not even think about vehicle costs or other overheads.

When I was a kid, say under 30 or so, auction houses in Australia used to charge the seller 10%. No listing charge, no buyers commission, just 10% from the seller. As time went by it seems that every auction house in the world got the idea that to be like Christies, or Sothebys, all they needed to do was to raise their fees to similar, or even higher levels. So the race to the top began. Now we have a situation where the seller pays 25% or more + catalogue listing costs + photography costs, the buyer pays 25%, and the auctioneer makes a motza --- or maybe he doesn't.

Many major auction houses are publicly listed companies, public companies have a legal obligation to make every effort to make a profit for their share holders.

In another life-time I used to buy a lot at auction, not just keris & other sharp pointy things, but all sorts of things.

I liked auctions, for entertainment value if nothing else.

I have not bid at auction, either live or online in many years.
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