Understanding Auction Fees and Buyer's Premiums

When you are buying or selling fine art, antiques and rare objects at an online auction, understanding the innate fees and premiums involved is an essential part of the journey. Past winning the bid, additional charges can apply to the final purchase, and sellers may incur extra costs when consigning an object for sale at auction. Whether you’re curating a fresh piece for your collection, searching for a unique piece or preparing to sell something in your portfolio, understanding how auction fees work can help you to plan, decide and get ahead throughout the process. Below, explore everything you need to know before buying or selling at auction. 

What Are Auction Fees? 

Auction fees are costs that are associated with buying and selling. These can cover many different components of a sale, including auction management, object packaging and organising delivery. Auction fees vary from auction house to auction house, with terms of sale and transaction type impacting the final expense. Other charges to note are buyer’s premiums, seller commissions and extra services like shipping or handling. Take a look at the relevant terms before you place your bid or list your item for auction to understand which fees could apply to you. 

What Is A Buyer’s Premium?

At an auction, a buyer’s premium is the fee charged to the winning bidder which stacks on top of the hammer price. For reference, the hammer price is the final bid accepted by the auction house when the bidding session comes to a close. 

This expense is generally calculated as a percentage of the hammer price, although this is not a blanket rule and the practice can vary depending on your auction house of choice. It is essential to check the specific terms of an auction house to understand how this fee could impact your total purchase price, should you come out on top! As an example, if you are the winning bidder on a rare item like a painting, sculpture, bronze statue or decorative item, the amount you pay could be slightly higher than your final placed bid once the buyer’s premium and any other additional charges have been calculated. When you are shaping your bidding budget, factoring in these extra expenses can help you stay within your planned spending window should you win at auction. 

Who Pays Auction Fees? 

Auction fees can apply to both sides of the process, with chargers differing from buyers to sellers. For buyers, a buyer’s premium is the most common additional cost. Other charges that may occur include applicable taxes, shipping, handling or import duties. When it comes to sellers, a commission can be charged by auction houses under the pre-set agreed consignment terms. Extra expenses can also cover services like transportation, restoration or framing depending on the piece and the arrangement between seller and auction house. As these fees and structures are changeable depending on the company, country and context, buyers and sellers should confirm additional charges with their auction house of choice before proceeding. 

How To Prepare For An Auction

By now, you should feel confident on additional auction fees and how they can impact the final price of an item. This is a great step when you are preparing to bid on fine art and collectibles. Before you register for your next online art auction, get to know the auction’s terms and conditions, set your budget and remember to factor in any additional costs associated with your purchase. If you are a seller, explore commissions and any potential service fees before listing your object to help clarify the expected costs involved bringing it to auction. 

Whether you’re buying or selling, discover a premium experience with Charleston’s Fine Art Auctions.


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