Buyer’s Premiums: What You Need to Know

Buying a product through an auction is a very different experience from buying a product in a retail establishment. Prices in retail locations are clearly marked, and that’s what the buyer pays. In contrast, prices at auctions are set by what buyers are willing to pay. But that’s not the only fee.

When buying at auction, often a buyer’s premium is added to the purchase amount. Auction buyers should be aware of a buyer’s premium before bidding, and buyers should factor that fee into the other costs they should consider before bidding—such as product condition, transportation logistics, and financing.


What is a Buyer’s Premium?

A buyer’s premium is a fee commonly charged by auction companies. It’s a percentage of the final selling price for each item sold. The buyer’s premium compensates the auction company for bearing the responsibility of representing the products for sale. The premium can vary depending on several factors, such as:

  • Product Category—whether the products are high-priced equipment, collectibles, or products with a lower price point.
  • Location—whether the items for sale are domestic or international, or able to be viewed in person or strictly online.

Buyer’s premiums can also work on a scaled tier or cap system. In a tiered premium auction, the buyer’s premium percentage is lowered as the bid price moves into a higher price category, or tier. Likewise, premium cap auctions eliminate the premium once the bid reaches a certain threshold. Both of these systems motivate buyers to increase their bid—or to buy a more expensive item—to reduce or eliminate the premium fee.


Proxibid’s Approach to Buyer’s Premiums

As a matter of policy, Proxibid doesn’t dictate what premium a seller should charge. We do, however, take steps to display the fee clearly to buyers, so there are no surprises. Proxibid sellers who offer a low buyer’s premium are identified by a “badge”. This allows buyers to seek out auctions by companies that honor best practices for buyer’s premiums, allowing buyers to make the most informed purchasing decisions possible.

Proxibid’s goal is to be as transparent and clear as possible about buyer’s premiums. Being able to easily find and see the buyer’s premium fee, along with any other terms and conditions, allows buyers to factor all costs into their bidding decision, and to bid with confidence.


Total Transparency is Fair for Everyone

Every system in place at Proxibid is there to bring complete transparency to the Proxibid Marketplace—whether it’s the badge to identify auctions with low buyer’s premiums, or a stringent approval process for sellers and buyers. Complete transparency throughout the platform produces a safe and secure environment for all participants, allowing both sellers and buyers to be in complete control of every aspect of their activity at Proxibid.

We know our reputation is at stake with every auction and every transaction, and we don’t leave anything to chance. Complete transparency is just one of the ways we can ensure a level playing field for all.