Replies to This Discussion

Permalink Reply by Steve Cyrkin, Admin on January 2, 2013 at 3:18pm

Everyone:

If you question if something is appropriate to publish here, ask me before you do it. I just deleted a reply that was completely off-base and threatened to ruin the legitimacy of this discussion. 

Thank you

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Permalink Reply by MICHELLE JAY on January 2, 2013 at 11:25pm

Steve:

Thank you so much for your comment. You make an excellent point!

To answer your question, I reviewed the spreadsheet where I captured the actual “Hammer Price” on several of the Auction Lots LIVE during Julien’s December 2nd Auction and the “Auction Results” which are published by Julien’s Auctions DO INCLUDE the Buyer’s Premium Fee.

Therefore, if you take an approximate percentage of 25% added to the “Auction Results” (which would be if they were all under $100,000 and purchased in person), then the approximate actual sale of the Auction based on the “Hammer Price” was = $3,940,892.62.

However, if you take an approximate percentage of 28% added to the “Auction Results” (which would be if they were all under $100,000 and purchased online), then the approximate actual sale of the Auction based on the “Hammer Price” was = $3,783,256.92.


As to whether the SELLER pays on the “Hammer Price” or the “Hammer Price” PLUS the “Buyer’s Premium,” I am unsure because the terms and conditions only state that “Julien's Auctions has a 20% commission rate.”

So, if you utilize the assumption that Julien’s Auctions charges the Seller 20% on the “Hammer Price,” then Michael Bush would have made approximately the following:

- $3,152,714.10 (subtracting the 20% the Seller pays Juliens. This is calculated on if Julien’s added 25% to the “Auction Results” published)

- $3,026,605.54 (subtracting the 20% the Seller pays Juliens. This is calculated on if Julien’s added 28% to the “Auctions Results” published).


And, if you utilize the assumption that Julien’s Auctions charges the 20% Seller Commission to the “Hammer Price,” then Julien’s Auctions would have made approximately the following:

- $2,101,809.12 (this is calculated based on if Julien’s added 25% to the “Hammer Price” to the “Auction Results” published plus the 20% Seller Commission Fee paid to Julien’s Auctions based on the “Hammer Price”)

- $2,227,917.96 (this is calculated based on if Julien’s added 28% to the “Hammer Price” to the “Auction Results” published plus the 20% Seller Commission Fee paid to Julien’s Auctions based on the “Hammer Price”).


Steve, Please let me know if you have any questions on these calculations.

As mentioned, these are approximate calculations. All prices were obtained from Julien’s Auctions Published “Auctions Results;” however, each item was not separately calculated based on whether it is over or under $100,000 (which is a difference of 20% and 25%, respectively owed to Julien’s by the Buyer) or whether it was purchased in person or online (which, if purchased online is an additional 3% paid by the Buyer to Julien’s), but it is the best estimate based on the information available.

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Permalink Reply by Steve Cyrkin, Admin on January 3, 2013 at 12:12am

Darn, you're good at math, Michelle.

Auction fees work a little differently than most people realize. Let's take the signed Thriller Letterman's jacket as an example:

I watched that lot sell, and the hammer price, which is strictly the amount of the winning bid, was $150,000. Because it was over $100,000 and Lady Gaga's rep, who bought it, was bidding at the auction, the buyer's premium (commission) was 20%, or $30,000. That's why it is listed as being sold for $180,000.

At a 20% seller's commission, Julien's would keep 20% of the $150,000 hammer price ($30,000 again) and give the seller a net of $120,000.

So buyer pays $180,000

Seller gets $120,000

And Julien's gets $60,000: 33.33% of the proceeds.

If an item hammered at $50,000, the buyer would pay a 25% buyer's premium ($12,500), for a total of $62,500. 

The seller would pay Julien's their same 20% of $50,000, which would be $10,000, netting them $40,000.

Julien's would get $22,500, which is 36% of the proceeds.

Probably at least $1,500,000 sold for over $100,000 in this auction, and I imagine less than a million sold over the internet. Bigger bidders at Julien's seem to use the phone more, and that has the same commission as bidding from the floor does.

And now that I've totally confused things, I think I'll go to bed. :)

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Permalink Reply by Steve Cyrkin, Admin on January 3, 2013 at 12:19am

BTW, if Julien's reported $5.2 million gross includes sales tax for California residents, that rate was 8.75% in 2012. Lady Gaga and anyone else who took delivery in California would pay that tax, unless they're a dealer. 

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Permalink Reply by Helen on January 3, 2013 at 12:36am

More pain. Poor people.

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Permalink Reply by MJ-fan-1965 on January 3, 2013 at 5:47am

I think you did a very good job at explaining.  Both of you did, it puts things into prospective.  :)

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Permalink Reply by Helen on January 3, 2013 at 12:17am

Wow, good work! I think both seller's commission and buyer's premium are charged on the hammer price. http://mikebrandlyauctioneer.wordpress.com/2012/01/14/seller-commis...

I'm surprised they publish the auction results including buyer's premiums. Seems almost too honest :D.

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Permalink Reply by MICHELLE JAY on January 3, 2013 at 1:34am

Steve:

Thank you for explaining the calculations in a more precise manner. I apologize for my lengthy calculations that I provided, but I possess a trait of Michael's = perfectionism (although it is sometimes a curse) and of being too detail-oriented (you can ask Taaj - she will tell you)!!!

I did; however, check Julien's Auctions published "Auction Results" and the published Results DO INCLUDE the Buyer's Premium based on the "Hammer Price;" Julien's HAVE NOT subtracted the Seller's Commission off these Published Results; and the Published Results DO NOT include any California Sales Tax.

Thanks for the clarification question(s) - I did enjoy doing the calculations!

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Permalink Reply by Veronica Shultz on January 3, 2013 at 4:30am

 Not sure this has anything to do with the calculations. but I bought the jacket for $1500, then with the % added the amount became $1920. Just a few hours after the auction Julien´s started to withdraw those $420 from the creditcard. In small amounts, starting with just $1 and then $5, then $10 and so on. Caused my mothers bank to react and they cancelled her VISA. She had to wait over 5 days to get a new one and that caused problems. That has been pointed out to Juiens´in the letters we have written them. We got one answer from someone when filling in the form on the website on Dec 5 I think it was, where we said that we can´t pay anything until we get the new creditcard. The answer we got was that we can pay when the new card arrives. It was explained in the message we wrote how the small amounts that Julien´s took caused the bank to cancel the card. No apologize at all from them..

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Permalink Reply by Helen on January 3, 2013 at 5:07am

How weird! Is that normal practice, Steve, do you know?

What a hassle, Veronica, I really feel for you :(.

Also interesting that they were quick enough to reply when they wanted money from you, hm?

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Permalink Reply by Veronica Shultz on January 3, 2013 at 5:09pm

Yes, feels like they kept in contact as long as the jacket wasn't paid.

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Permalink Reply by MJ-fan-1965 on January 3, 2013 at 5:45am

This is very interesting, that they responded to you for that but now, multi attempts at writing them, as well as using the form on the website they won't respond to you.  Someone asked me on twitter if you were doing it correctly and I responded yes, they suggested you make a phone call.  However, I personally like things like this in writing (I also realize your on diff time zones being in Sweden)

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