Buyer's Premium
A Buyer's Premium is a standard fee or percentage that auction houses add to the winning bid price. It's a crucial concept in the auction industry that generates additional revenue for the auction house. When someone wins an auction, they pay both the hammer price (their winning bid) and this additional percentage. For example, if someone wins an item for $1,000 and there's a 20% buyer's premium, they would actually pay $1,200 total. Professionals working with buyer's premiums need to understand how to calculate, communicate, and process these fees, as they directly impact sales totals and customer relations.
Examples in Resumes
Managed and calculated Buyer's Premium rates resulting in 15% revenue increase
Implemented new Buyer's Premium structure for online auctions
Trained staff on explaining Buyer's Premium policies to new clients
Typical job title: "Auction House Professionals"
Also try searching for:
Where to Find Auction House Professionals
Professional Organizations
Job Boards
Example Interview Questions
Senior Level Questions
Q: How would you handle a situation where a high-value client disputes the buyer's premium?
Expected Answer: A senior professional should explain their approach to client relations, knowledge of industry standards, and ability to maintain both client satisfaction and company policy. They should mention documentation, clear communication, and possibly flexibility for valuable clients.
Q: What factors do you consider when setting buyer's premium rates?
Expected Answer: Should demonstrate understanding of market conditions, competitor analysis, operational costs, and client base considerations. Should also discuss how different categories of items might warrant different premium rates.
Mid Level Questions
Q: How do you explain buyer's premium to new clients?
Expected Answer: Should show ability to clearly communicate the concept, provide examples, and address common concerns. Should emphasize transparency and maintaining good client relationships.
Q: What systems do you use to track and process buyer's premiums?
Expected Answer: Should be familiar with auction management software, payment processing, and record-keeping procedures. Should understand how to handle both online and in-person auction premiums.
Junior Level Questions
Q: What is a buyer's premium and how is it calculated?
Expected Answer: Should be able to explain the basic concept, demonstrate ability to calculate percentages, and understand why auction houses use buyer's premiums.
Q: What information about buyer's premium must be disclosed to clients?
Expected Answer: Should know basic transparency requirements, when and how to disclose premium rates, and standard documentation practices.
Experience Level Indicators
Junior (0-2 years)
- Basic premium calculations
- Client communication
- Documentation handling
- Payment processing
Mid (2-5 years)
- Premium rate analysis
- Client relationship management
- Auction software proficiency
- Problem resolution
Senior (5+ years)
- Premium strategy development
- Staff training and management
- Policy development
- High-value client handling
Red Flags to Watch For
- Unable to calculate percentages accurately
- Poor communication skills when explaining fees to clients
- Lack of knowledge about industry-standard premium rates
- No experience with auction management software
