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Commission with minimum. Auctioneers charge the seller a commission, which is typically a percentage of the gross sales, or a minimum fee, whichever is greater. For example, an auctioneer charging the seller 15% or $1,000 would earn $1,500 for a $10,000 auction, but earn $1,000 for a $5,000 auction.
I’ve heard this question 100’s of times in auction school, and otherwise when I speak to virtually anyone about my profession. How are you paid? What do you get paid? When do you get paid? We’ll address the “how” in this article.
There are two parties to an auction. On the one side, there is a seller who typically owns the item, or otherwise represents the title holder. Then, on the other side, there is a buyer who upon, “sold” agrees to take title.
For hundreds of years, and many still today, auctioneers solely charged the seller. This is done in several ways, including:
Then, beginning in 1975, Christie’s and Sotheby’s introduced the buyer’s premium in England, and soon after (1977) in the United States. This allowed the auctioneer to have the buyer supplement his income with additional commission.
While it may be that technically the buyer’s premium belongs to the seller, and not the auctioneer — unless the seller agrees to pay the auctioneer this fee — which would be almost universally the case — the buyer’s premium allows the auctioneer to earn additional income.
Auctioneers are paid in a variety of ways and are generally not required to disclose their method of compensation nor amounts to the public, unless their auction involves entities such as government, a court-order, or the like. However, it is held that a buyer’s premium must be disclosed prior to bidding for it to be enforced upon a buyer, and of course, the seller and auctioneer must agree to any fee arrangement prior to the auction.
Auctioneering, not unlike a number of other professions, is typically seen as something one cannot do themselves (such as a dentist, surgeon or optometrist.) Because of this, auctioneers are paid a premium as contrasted to occupations where the public feels they can do it themselves (lawn care, cleaning jobs, and the like).
Too, auctioneering often involves valuable assets, which have to be carefully and skillfully marketed and presented to maximize proceeds. For these reasons, many auctioneers are paid rather handsomely.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.