By Ben Smith on Dec 14, 2021 12:30:37 PM
Online shopping is growing ever more popular and the interest in online auctions is showing no sign of dropping. Continued uncertainty and nervousness surrounding the Covid pandemic – let alone months on end of everyone being stuck at home with nowhere to go – has driven a boom in buying over the internet.
Meanwhile, many businesses have sadly struggled and some have gone to the wall or scaled back as they battled the effects of lockdowns and nervousness amongst the marketplace. While that is clearly dreadful news for those immediately affected by those closures, it has seen a rise in old stock and unwanted office furniture which often finds its way to landfill.
All of this has helped increase the amount of items available to buy in online auctions, but you might be wondering how it is priced? Whether you’re a buyer or a seller, here’s everything you need to know about auction pricing:
Value of the item
This might sound obvious, but it can be a bit of a balancing act, juggling the competing pressures on what stock might be worth. If it’s a high street item, the chances are it’s going to compare favourably to the price down in the shops. But if it’s rare, one-of-a-kind or a particularly sentimental piece then that can push the value up. The seller will set the opening bid, with the aim of generating interest in the lot by not setting it too high or too low and ultimately the value is decided by the person who is prepared to bid the most.
If you’re selling through William George then you’re on to a winner as we don’t take a commission - the hammer price is what the seller will take home. Couple that with our low buyer’s premium, meaning the person purchasing is on to a winner as well!
As is standard practice across the auction industry, we charge a premium on every lot sold. It’s important to take that into consideration when bidding for a lot because it’s only added on when the hammer falls. It’s clearly indicated at the top of an auction and again right next to the field where a bid is placed. It can vary from as little as 15 percent on high value goods up to about 25 per cent, then there’s VAT of 20 per cent on top of that. Unlike other auction houses and sites, we don’t charge the sellers any commission so they can offer a bargain.
There isn’t anything we can do about this one I’m afraid, you have to pay tax. VAT of 20 per cent is applied to the buyer’s premium and to most items sold through William George. If the highest bidder is a VAT registered business, then that can be claimed back through HMRC, otherwise it needs to be paid, just like in a shop. Again, like the other costs, it’s clearly marked on listings next to the bidding form.
Sellers have two options when listing their items – either join a collective or go it alone in a private auction. A collective is always free, with users able to sell up to 50 items per month at no additional cost.
The first private auction is also free of charge, after that it’s £120 plus VAT for each auction. In return, you get a dedicated account manager to help you out, support with your marketing and greater control of the auction. Private auctions are a fantastic way to sell lots of stock and to turn a side hustle into a fully-fledged business.
Sellers can really boost their sales potential with even a modest marketing budget and here at William George we can help. There are a number of different packages, tailored to suit all budget starting at just a few hundred pounds. Activities can include listings in our dedicated auction emails, capitalising on our social media reach, a banner on our homepage and much more. There are a number of different packages available or one of our experts can create a more bespoke campaign for those who want it. Head over to our seller’s bible for the full run down of marketing packages available.
Once an item has been bought, it needs to get to the buyer and this should be factored into the total outlay for the highest bidder. Many vendors choose to offer free delivery, incorporating the price into the reserve and making it more appealing to potential buyers. Others may offer collection, though of course this can put some people off who don’t want to travel.
For sellers who pass on the cost of delivery, choosing competitive couriers and getting several quotes is a great way to keep costs down.
This doesn’t actually add to the total price of a lot, but it will prevent it selling for less. If an item has a reserve placed on it, it will only sell if someone bids a greater amount than the reserve price. This can protect the seller from making a loss on an item or ensure they get what they consider a fair price for something rare or sentimental. But sellers need to be aware that setting a reserve price too high can have an adverse effect on their sale. It might help provide piece of mind or stop you losing money but it could prevent you getting a sale. Buyers don’t know what a reserve is but they can see how many bids have been made and if the reserve has been met. If a reserve hasn’t been met and there have been several bids then it could easily put people off. Why would they waste their time? Think; do I really need a reserve? If you’re selling something pre-loved in a de-cluttering session, then any money you make is a bonus. And it’s a very enticing prospect to buyers knowing they don’t need to meet a reserve.
Now you know all the facts about pricing, have a look at what you could be bidding on right now in our live auctions!