Re : Selling Watches on Auction

[benlee]

Hi,

I'm wondering if anyone got any experience selling their timepiece via watch auction company such as Philips or Sotheby. How was the experience, pros and cons and whether it's worthwhile to put up with the wait in exchange for a better selling price vs just selling to a pre-own/grey dealer.

Thanks.

[fullofboats]

Auction houses charge a 25% hammer premium on top of the winning bid and a 5-10% commission from the seller’s end. You’ll end up getting less than 70% of what the buyer actually pays. With the exception of illiquid pieces greys can’t price or very rare pieces everyone wants I don’t think auction houses make sense.

[ap1]

Yeah but our greys here sell a 5711 for 100k ask, and it appears these go 140 auction? Is that a push?

[sgrossma]

I will never understand the prices often achieved from the auction houses on standard production pieces. Who are the buyers that are willing to pay 40%-100% more than a trusted gray?

[cascavel]

Originally Posted by sgrossma

I will never understand the prices often achieved from the auction houses on standard production pieces. Who are the buyers that are willing to pay 40%-100% more than a trusted gray?

They are people who don't know trusted grays, or people who don't trust trusted grays as much as they trust Phillips, Sotheby's et al.

[benlee]

Originally Posted by fullofboats

Auction houses charge a 25% hammer premium on top of the winning bid and a 5-10% commission from the seller’s end. You’ll end up getting less than 70% of what the buyer actually pays. With the exception of illiquid pieces greys can’t price or very rare pieces everyone wants I don’t think auction houses make sense.

I am actually refer to selling. I was quoted 6% of hammer price.

[DoraTheExplorerII]

Originally Posted by sgrossma

I will never understand the prices often achieved from the auction houses on standard production pieces. Who are the buyers that are willing to pay 40%-100% more than a trusted gray?

I feel like they do it for fun, like when we spend $50 on arcade games to win tickets for a $2 toy.

[Taxman1]

I just sold my GMT Master and the fees at Skinner in the Boston area were very reasonable. 6% fee plus 1.5% insurance (7.5% of total). The estimated price was right on target and advice on the reserve was helpful as well. Their current auction is closing today with another one scheduled for October. I will be selling my IWC watch from the 1960's at the next auction. You should contact Jonathan Dowling if you have any questions. 25% in fees is ridiculous. Best of luck

[fullofboats]

......Auction houses have a 25-30% margin on watches they sell. This is higher than most greys.

If the winning bid is $80, the buyer ends up paying $100 (80 + 25% hammer premium). The auction house then charges the seller 5-10% fees on the sellers cut (ie. 5-10% on the $80 winning bid). Therefore on a watch that an auction house sells for $100 the seller will only get $72-$76

You need to compare the $75 or so with what a grey will offer you...
On liquid pieces grey buy at a 10% margin. You figure out which is better for you...

[dchang81]

Originally Posted by fullofboats

......Auction houses have a 25-30% margin on watches they sell. This is higher than most greys.

If the winning bid is $80, the buyer ends up paying $100 (80 + 25% hammer premium). The auction house then charges the seller 5-10% fees on the sellers cut (ie. 5-10% on the $80 winning bid). Therefore on a watch that an auction house sells for $100 the seller will only get $72-$76

You need to compare the $75 or so with what a grey will offer you...
On liquid pieces grey buy at a 10% margin. You figure out which is better for you...

there are a lot of watches grey dealers won't touch or will severely lowball you.

[dchang81]

Originally Posted by DoraTheExplorerII

I feel like they do it for fun, like when we spend $50 on arcade games to win tickets for a $2 toy.

played midway games with my 5 year old. the family in front of us took 30 minutes to decide and even consulted people via facetime what they wanted. when they decided to change their mind for EVERYTHING they already picked out i died a little inside.

[benlee]

Originally Posted by fullofboats

......Auction houses have a 25-30% margin on watches they sell. This is higher than most greys.

If the winning bid is $80, the buyer ends up paying $100 (80 + 25% hammer premium). The auction house then charges the seller 5-10% fees on the sellers cut (ie. 5-10% on the $80 winning bid). Therefore on a watch that an auction house sells for $100 the seller will only get $72-$76

You need to compare the $75 or so with what a grey will offer you...
On liquid pieces grey buy at a 10% margin. You figure out which is better for you...

I think that's not correct, or at least based on what was explained to me. Say if buyer's premium is 25% and seller's commission is 6%. If the hammer price is say $100K, the buyer pays premium 25% so buyer pays $125K, and I get $94K. That's my understanding..

[dchang81]

Originally Posted by benlee

I think that's not correct, or at least based on what was explained to me. Say if buyer's premium is 25% and seller's commission is 6%. If the hammer price is say $100K, the buyer pays premium 25% so buyer pays $125K, and I get $94K. That's my understanding..

those two explanations read the same to me?

what i don't understand is what is the point of the 25% premium. i mean each bid is essentially x1.25, is it some psychological ploy for sellers to think they are only paying 5-6% commission when it's actually 30%?

[ts3]

Originally Posted by benlee

I think that's not correct, or at least based on what was explained to me. Say if buyer's premium is 25% and seller's commission is 6%. If the hammer price is say $100K, the buyer pays premium 25% so buyer pays $125K, and I get $94K. That's my understanding..

Of course fullofboats is correct and you have described exactly the same with different numbers. No difference between getting 94 from 125 to getting 75 from 100 in terms of the seller getting around 75% of what the winning bidder pays. No offense, but this is a little scary...

[fullofboats]

Originally Posted by dchang81

those two explanations read the same to me?

what i don't understand is what is the point of the 25% premium. i mean each bid is essentially x1.25, is it some psychological ploy for sellers to think they are only paying 5-6% commission when it's actually 30%?

I think they do it for the confusion that is evident in this thread and also for the new bidders who may be unaware of the 25% hammer premium and wrongly think they’re getting a steal on a winning bid.

[benlee]

Originally Posted by ts3

Of course fullofboats is correct and you have described exactly the same with different numbers. No difference between getting 94 from 125 to getting 75 from 100 in terms of the seller getting around 75% of what the winning bidder pays. No offense, but this is a little scary...

The "sales pitch" from the auction company is that they are able to reach a wider field of potential buyers and are confident the prices can be much higher so as a seller, the pro is in better price. This appears to be possible as I recall seeing even standard production pieces going for well above grey market prices. Of course this is not guaranteed as it depends on the actual auction results. The con is that I have to wait quite a long time to get paid.

Anyway, I have not made up my mind. Thanks everyone for all your inputs.

[conkers]

There is a lot of incorrect information here I am afraid. Ben, let's chat over the weekend.

[ap1]

Right, I mean I prefer 94 to 75 tbh lol

[dchang81]

Originally Posted by conkers

There is a lot of incorrect information here I am afraid. Ben, let's chat over the weekend.

curious to see what the correct info is. have some pieces that aren't exactly what grey dealers are looking for so i was thinking the auction route.

[MILGAUSS88]

Originally Posted by Taxman1

I just sold my GMT Master and the fees at Skinner in the Boston area were very reasonable. 6% fee plus 1.5% insurance (7.5% of total). The estimated price was right on target and advice on the reserve was helpful as well. Their current auction is closing today with another one scheduled for October. I will be selling my IWC watch from the 1960's at the next auction. You should contact Jonathan Dowling if you have any questions. 25% in fees is ridiculous. Best of luck

Skinner's has a 23% buyers premium, so if a buyer is willing to pay $100, they are going to bid $81.
In reality the buyers premium is coming out of the sellers pocket.
So you are actually paying 19% + 7.5% = 26.5%.