Collector tip
Buyer’s premium at auction: what to check before you bid
The winning bid is not always the final amount you pay. Before you raise your paddle or submit an online bid, understand the buyer’s premium and every other charge that may apply.
What is a buyer’s premium?
A buyer’s premium is an additional percentage charged on top of the hammer price, or winning bid. The rate can vary by auction, sale category, bidding platform, and payment method. A premium of 20%, for example, means a $1,000 hammer price may become $1,200 before tax, shipping, or other costs.
Check the complete cost before bidding
Read the sale terms and look for the following details before you bid:
- The buyer’s premium rate and whether it changes by price tier.
- Sales tax, resale-certificate requirements, or other applicable taxes.
- Online platform, credit-card, wire-transfer, or other payment fees.
- Shipping, packing, insurance, storage, and pickup deadlines.
- Whether the premium is calculated on the hammer price alone or with other charges.
Set an all-in budget
Decide your maximum total cost, not just your maximum bid. If the terms are unclear, ask the auction house to show how a sample hammer price would be calculated. Taking a moment to do the math can help keep an exciting purchase within a comfortable budget.
A note from Dion Abadi
Dion Abadi is an Atlanta-area art and jewelry auctioneer and author who writes for buyers and collectors. His collector’s guide offers broader context on auctions, art, jewelry, watches, and collectibles. You can learn more on the About Dion Abadi page or contact him directly.
Auction terms differ by sale. Review the official terms for the specific auction and ask questions before bidding.