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Fair Warning - DNW to hike buyers premiums

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Medaler

There are doubtless some collectors here who do not have membership of the BMF and who do not get to see "Medal News."

 

 

DNW have announced plans to hike buyers premium to 24% from 20%, starting in September. This will mean that successful bidders will now need to add 28.8% to the hammer price (due to VAT on the buyers premium).

 

I gather that some sort of sop is being added for sellers. If the purchaser of any lot bought from DNW since 1st Jan 2013 consigns that lot back to them for resale he/she will not be charged the usual selling commission (15% of hammer price). This however only applies if such lots are consigned by the original purchaser. I personally would think that very few people who have bought lots since 1st Jan 2013 would deem it viable to be re-selling them so soon. If a Dealer bought the lot from DNW and sold it to a client then (as my understanding goes) that client will still be charged the 15% selling commission. This also raises questions about any beneficiary trying to dispose of medals from a deceased estate. Presumably they are not regarded as the original buyer and the 15% would therefore still be applied.

 

Many of us will remember when sellers paid 10% and buyers 15%, with the auction house effectively skimming 25%. Now the fees look set to skim 39% it is perhaps time to consider if both buyers and sellers could do better by taking their trade elsewhere.

 

Regards,

Mike

Edited by Medaler
Correction

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Kitchener's Bugle

This very subject Mike is currently being hotly debated on the British Medals Forum!

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Kimberley John Lindsay

Dear Mike,

Yes, I had seen that on my online Medal News.

The trouble is that medal-collecting is addictive. In general if a collector desires a particular medal group, he will want to secure it, premium here, premium there...

Kindest regards,

Kim.

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Medaler
13 hours ago, Kitchener's Bugle said:

This very subject Mike is currently being hotly debated on the British Medals Forum!

 

Erm, some of that is coming from me! - It's how I found out about it.

 

Mike

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Medaler
10 hours ago, Kimberley John Lindsay said:

Dear Mike,

Yes, I had seen that on my online Medal News.

The trouble is that medal-collecting is addictive. In general if a collector desires a particular medal group, he will want to secure it, premium here, premium there...

Kindest regards,

Kim.

 

Hello Kim,

 

I hope you are keeping well?

 

You are quite right of course. My primary reason for posting here was to prevent any members here from receiving higher bills than they were expecting after the next sale. It does however raise all sorts of other questions about the viability of both buying and selling via DNW. We must all make our own minds up about what we buy and how much we pay for it, but an awareness of this latest hike and its implications can hopefully only be a good thing.

 

As for me, I will just lower my bids by 5%.

 

Warmest regards,

Mike

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Kitchener's Bugle
1 hour ago, Medaler said:

Erm, some of that is coming from me! - It's how I found out about it.

 

Reading some of them posts it seems that the views are polarized and that it is a "forelorne" hope in trying to change them! ;)

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Medaler
1 hour ago, Kitchener's Bugle said:

 

Reading some of them posts it seems that the views are polarized and that it is a "forelorne" hope in trying to change them! ;)

 

I need more biscuits.......

 

I suspect you are a darned good researcher too!

 

Mike

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voltaire60

   The major motive for auctioneers to raise their buyers' premium is usually just good old fashioned greed.  The secondary motive is  performance-  auctioneers usually change the balance between buyer and vendor premiums  in order to lower vendor premiums to bring in more business .  A sign of increased competition.  What would be interesting to know is whether DNW have re-jigged their consignment terms/ rates  over and above the re-sale provisions listed. If auctioneers quietly lower their vendor premiums when pushed, then this usually means buyer premiums will rise to compensate.

 

    I am not a medal collector or dealer but DNW usually seem to offer good service (Auctioneers  elsewhere are often not troubled with words such as "morality"). Are they feeling the squeeze from Tinternet????   Has their management recently changed- the usual spur to higher rates if that some grasping venture capitalist has taken over or bought an interest

 

(I see from Companies House that Dix has scaled down in the past year- no longer director or with significant control-and that Noonan  has increased (75% or more of shares)

Edited by voltaire60

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Medaler
39 minutes ago, voltaire60 said:

   The major motive for auctioneers to raise their buyers' premium is usually just good old fashioned greed.  The secondary motive is  performance-  auctioneers usually change the balance between buyer and vendor premiums  in order to lower vendor premiums to bring in more business .  A sign of increased competition.  What would be interesting to know is whether DNW have re-jigged their consignment terms/ rates  over and above the re-sale provisions listed. If auctioneers quietly lower their vendor premiums when pushed, then this usually means buyer premiums will rise to compensate.

 

    I am not a medal collector or dealer but DNW usually seem to offer good service (Auctioneers  elsewhere are often not troubled with words such as "morality"). Are they feeling the squeeze from Tinternet????   Has their management recently changed- the usual spur to higher rates if that some grasping venture capitalist has taken over or bought an interest

 

(I see from Companies House that Dix has scaled down in the past year- no longer director or with significant control-and that Noonan  has increased (75% or more of shares)

 

All exactly the sort of thing that both buyers and sellers via auction houses should be thinking about. I think they are being squeezed by the internet. Time to look at their operation instead of making things worse by carving a bigger piece of the pie out for themselves?

 

There are other issues too. I don't believe that their "live" internet bidding system is fit for purpose either. That though is a whole different can of worms.

 

The debate continues on the BMF. I just wanted raise awareness of the hike on here so that nobody gets a nasty surprise when their next invoice arrives. If it prompts some to take a look at the sort of value they are getting, then maybe that's a good thing too.

 

Mike

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hmsk212

Add to this the fact that a few " helpful " members of this forum write posts  with " guess what I saw coming up for auction next week " and I will never be able to afford to buy anything I've got my eye on.

 

Steve

Edited by hmsk212

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OLD ROBIN HOOD

Greetings from Sherwood Forest

Just to put my two groats worth into this topic.

I was once a regular buyer through auctions and got quite a lot of my collection this way. However when the " buyers commission " came in I stopped,

I refuse to pay extra  for the pleasure of spending my money . So has my collection suffered? . No it hasn't  I am still finding nice items to buy and paying only

the price on the dealers ticket, sometimes less. So in me the auction rooms have lost a customer.

 

                                                                                  Old Robin Hood.

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Medaler
2 hours ago, OLD ROBIN HOOD said:

Greetings from Sherwood Forest

Just to put my two groats worth into this topic.

I was once a regular buyer through auctions and got quite a lot of my collection this way. However when the " buyers commission " came in I stopped,

I refuse to pay extra  for the pleasure of spending my money . So has my collection suffered? . No it hasn't  I am still finding nice items to buy and paying only

the price on the dealers ticket, sometimes less. So in me the auction rooms have lost a customer.

 

                                                                                  Old Robin Hood.

 

Your two groats are most welcome! - I was begining to think I was on my own here.

 

It's kind of as broad as it is long in some respects, because a lot of dealers buy a lot of their stock at auction. There are bargains still to be had at auction despite the commission, but the key to is to know the value and not pay over that with the commissions. I think my biggest problem with the auction houses is that, by skimming 20% off the buyer and 15% off the seller, they represent terrible value for the seller. It's not just DNW, its an industry thing, but by widening the gulf further they are making things worse. Doubtless others will follow if the buyers just roll over, suck it up, shrug their shoulders, and pay more.

 

Other opinions are available of course, but that's the way I see it.

 

Goodness, Sherwood Forest - we are almost neighbours.

 

Regards,

Mike

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voltaire60
2 hours ago, Medaler said:

I think my biggest problem with the auction houses is that, by skimming 20% off the buyer and 15% off the seller, they represent terrible value for the seller. It's not just DNW,

 

   Exactly.   But the problem is that reduced vendor  charges are a  "come-on"- paid for by the consignor when the buyers adjust their prices downward to take account of the raised buyer premiums.  But many people only consign to auction once-the more so for medals as what comes from beyond collectors and dealers under the hammer is pretty much always family and or probate.

    I do wish that people would realise that auctioneers are not, to use the phrase of Bismarck, a "treuhand"-they are not honest brokers. They are commercially honest (Well,sometimes) but the chief aim of an auctioneer is to make a profit and put food on his own plate. Auctioneers always crow about the high prices they achieve-the only commercial organization that crows about getting the price wrong (compared to their estimates).  Where you see the auctioneer putting the food on their own plate first, it is with "mixed lots"-which is where many a dedicated collector or small dealer can do well-but this is done to save the auctioneer time and cost. 

     The Internet has changed everything-while DNW prospered mightily when Tinternet came in, it will attract competitors  across time. As something that can be catalogued to a consistent standard, is non-perishable and can be despatched by post, then it must invariably end up more and more with ebay or other auctioneers  who  can undercut on  commission. Very often the vendor is paying for the auctioneer's knowledge- but medal collectors have usually done all the work already -service histories, copies of documents, etc. In that circumstance, a collector/dealer who had done the work would have to be an idiot to consign where there are higher charges.than can be got elsewhere.

    Most lots at auction do not achieve spectacular prices-many fail to sell (What is DNW's "BI" rate by the way?)  Across time, I avoid auctions to sell, as I am happier with the certainty of my own price listed elsewhere, rather than the often illusory  suggestions of wealth beyond the dreams of avarice from the auctioneer.  In my experience,  the vast majority of lots for anything, at any auction fetch about what they should-and what can be assessed in advance with homework.An auctioneer is like a double-gazing salesman giving you the come-on spiel when you already have double glazing-  Auctioneering is  the art of chutzpah and flim-flam.

   

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Medaler

To be honest I am not sure of their BI rate, but believe it to be very low. I can't see it being more than 5%. The vast majority "hammers" with very little unsold. Frequently the estimates are a bit of a joke (way too low) but again I would stress that this isn't just a DNW thing. I think I need to be clear that I'm not singling DNW out for attack, which would rightly heap the ire of the mods upon me. What I am seeking to do however is to get buyers (and sellers for that matter) just to sit down calmly and evaluate what kind of deal they are getting after this latest hike. DNW come to the fore in this because it is they who are widening the gap between what the seller gets and how much the buyer pays, by taking a bigger slice of pie for themselves. The other auction house are doubtless watching this with interest and will follow suit.

 

The real problem that they have is (IMHO) that they are simply not selling enough high value lots to both sustain their business AND give value to buyers and sellers. I would then take that one stage further and say that they are working to a flawed business model. This kind of thing can ultimately only be bad for their reputation because, if they don't want to look like a bunch of glorified house clearance boys, they shouldn't be acting like them. Their service should be about giving buyers and sellers a fair deal, and if what they are selling isn't generating enough cash for themselves, then they need to look at their business model. What they probably need to do is look at the now antiquated way that they do business and embrace technology to reduce their average end to end costs for processing a lot.

 

Again, I would stress that this is all just MHO. All this of course is said by a person who has never been the Chairman of ICI and is most unlikely ever to be so!

 

Regards,

Mike

 

 

 

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Jim Strawbridge

About five years ago I was the agent for a serving soldier in disposing of his medals as soon as he retired. This was not an ordinary set but a multi-gallantry group that was (almost) unique. A certain auction house offered to take the group for their auction at nil selling commission. They were willing to do this as they wished to retain their reputation of attracting the very best items ahead of competitors. As the group sold privately for over £150k perhaps the auction house would have been entirely happy at pocketing £30k with very little work to do. 

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Medaler
2 hours ago, Jim Strawbridge said:

About five years ago I was the agent for a serving soldier in disposing of his medals as soon as he retired. This was not an ordinary set but a multi-gallantry group that was (almost) unique. A certain auction house offered to take the group for their auction at nil selling commission. They were willing to do this as they wished to retain their reputation of attracting the very best items ahead of competitors. As the group sold privately for over £150k perhaps the auction house would have been entirely happy at pocketing £30k with very little work to do. 

 

Hi Jim,

 

A very interesting example. I would have no idea about how to go about valuing a group like that, and would guess that I am not alone. Needless to say that it's more than a tad out of my price range, so I just don't look at groups like that with that kind of mindset. I had never considered that end of the market but yes, £30K is a belting fee for what is effectively just introducing a seller to a buyer. It would need to have "hammered" at £186K to bring any advantage to the seller, assuming my maths is right. At the new DNW rate that would be nearer £193K.

 

Mike

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voltaire60
3 hours ago, Jim Strawbridge said:

About five years ago I was the agent for a serving soldier in disposing of his medals as soon as he retired. This was not an ordinary set but a multi-gallantry group that was (almost) unique. A certain auction house offered to take the group for their auction at nil selling commission. They were willing to do this as they wished to retain their reputation of attracting the very best items ahead of competitors. As the group sold privately for over £150k perhaps the auction house would have been entirely happy at pocketing £30k with very little work to do. 

 

     A good example of how to deal with them.  With first class items, no vendor should really expect to pay any commission charges at all. In my experience, very few of the crème de la crème lots at auction would pay commission- the auctioneers know they will make a good turn from the buyer's commission.  With the Internet,  "commission" for the top items is just money for old rope.

 

    2) I don't know DNW (look at their listings sometimes) but  "estimates are designed  as a "come on"- Any regular attender at a particular auctioneers will soon begin to correlate estimates with results-  eg A particular auctioneer that I deal with usually has a top estimate of about half  what they really expect the lot to fetch-  and regular customers work on that basis- as the "reserve" price in this particular instance is usually one bidding step below bottom estimate.

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Medaler

Yes voltaire60, I see it exactly that way. Your first point plugs straight back into my theory that they are simply not selling a high enough proportion of big ticket items to cover their costs and give them the sort of margin that they think they deserve. Part of the issue is that they hold these auctions over 2 days, every 2 months, and they therefore have a finite capacity of around 1600 lots which they seemingly never fail to fill.

 

Again, on the issue of estimates, I fully agree about the "come and buy me" angle. The down side of course is that it does tend to make their "highly experienced and professional" valuers look like a bunch of numpty's. There will always of course be occasions where two bidders really, really want something and push lots to unpredictable prices, but there shouldn't be many.

 

Regards,

Mike

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