Online industrial auctions or machinery auctions have become a popular way for people to buy and sell used equipment, heavy equipment, and much more. The advantage of online industrial auctions is that they are easily accessible, and can reach a large number of potential buyers. This is because online auctions are open 24/7 and can be accessed from anywhere in the world with an internet connection. 

Depending on the auction vendor, some may charge a seller’s premium or a buyer’s premium in order to sell or buy in the auction. In this article, we are going to answer all the most common questions people have about buyer’s premiums in industrial equipment auctions.

What is a Buyer’s Premium?

A buyer’s premium is an additional fee that is added to the winning bid amount in an online auction. It is a percentage of the winning bid that is charged to the winning bidder, in addition to the bid amount.

How Much is a Buyer’s Premium?

This fee can range from 10% to 25% of the winning bid, depending on the platform, the products being purchased, and the type of auction. It is also important to note that some online auctions charge a different buyer’s premium for different types of assets. For example, the buyer’s premium for heavy equipment may be lower than the buyer’s premium for used equipment. Bidders should carefully review the auction terms and conditions to determine the buyer’s premium for the item they are bidding on.

Why Do Industrial Equipment Auctions Charge a Buyer’s Premium?

The purpose of the buyer’s premium is to provide revenue for the auction platform. This fee helps to offset the costs of setting up and running the auction, including the cost of advertising the auction, processing, and shipping the items, and maintaining the auction site. 

In some cases, the buyer’s premium can also be used to provide a guaranteed minimum price for the item being sold. This is because the buyer’s premium can increase the final price of the item, making it more likely that the item will sell for a higher price. This is particularly useful for selling rare or unique items, where the value of the item may be difficult to determine.

How Do I Calculate The Buyer’s Premium?

Bidders need to be aware of the buyer’s premium, as it can increase the final price of the item. For example, if the winning bid for an item is $100 and the buyer’s premium is 15%, the final price for the item would be $115 ($100 + $15). Bidders should consider the buyer’s premium when determining their maximum bid amount, to ensure that they do not overbid on an item and end up paying more than they intended.

Do I have to pay the Buyer’s Premium?

The short answer is yes, in most cases, you will need to pay a buyer’s premium in industrial auctions. That being said, it’s always a good idea to read the terms and conditions of an online auction before placing a bid. Make sure you understand the buyer’s premium and any other fees that may be charged, such as shipping or handling costs. You should also research the auction platform hosting the machinery auction to ensure that they have a good reputation and track record of fair dealings.

What is the Buyer’s Premium on Aucto?

For every equipment auction and machinery auction on the Aucto Marketplace, the buyer’s premium will be set between 10% -18%. When preparing to bid in any auction on the Marketplace, you will be able to see the Buyer’s Premium (BP) listed underneath the sales details. In addition to being listed underneath the sales details, when you submit a bid on the Aucto Marketplace, the platform  shows you what your bid will be including the Buyer’s Premium. This allows our buyers to know exactly what they are bidding to ensure  a timely response to any competitor bids. 

Ready to Start Bidding in Machinery Auctions on the Aucto Marketplace?

Now that you understand what a buyer’s premium is, why buyers are charged a buyer’s premium, and how to calculate a buyer’s premium, you are ready to start bidding in your first Machinery Auction on the Aucto Marketplace. Click the link below to create your free account and start bidding with just a few clicks.

Create Your Free Account

 

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About the Author

Clayton Arnold

Clayton Arnold is the Marketing Manager at Aucto. Clayton has 10 years of experience working in traditional and digital marketing campaigns. A Mohawk College graduate, Clayton believes in leveraging the latest technology & analytics to foster long-term relationships with clients.