If you’re new to online auctions, you might notice something called a buyer’s premium added to your winning bid and wonder: “Wait… what is this, exactly?” You’re not alone. It’s one of the most common questions we get from anyone who is new to the auction world.
Simply put, a buyer’s premium is a percentage added to the final bid price of an item. For example, if you win an item for $100 and the buyer’s premium is 18%, your total becomes $118 (plus tax, if applicable).
Perhaps because New Hampshire is tax free and we have that “live free of die” energy, some people don’t love this. And that’s okay! We can still be friends, no hard feelings. Auctions aren’t for everyone. But I do want to explain why it works this way. It’s truly not a cash grab, it’s just a different retail model
When you walk into a store and see a $50 price tag, that number already includes everything:
- The cost to manufacture or acquire the item
- Shipping and transportation
- Rent for the retail space
- Staff wages
- Marketing and advertising
- Business overhead
You don’t see those costs broken out. It’s just part of the list price. In an auction, the market sets the price. Not the us, not the seller. That means:
- Items often start at low opening bids
- Bidders determine what something is worth in real time
- Prices stay transparent and dynamic
Because of that, we don’t inflate item prices upfront to cover business costs. Instead, the buyer’s premium handles that piece separately. That’s things like:
- Payment processing fees
- Advertising and marketing to bring in bidders
- Auction platform and software costs
- Website hosting and tech infrastructure
- Staff time (auction set up, pick up and customer service throughout)
- Oerational supplies
- Our donut habit (Kidding!! Probably.)
Another common question: “Is the buyer’s premium your commission?” Nope! Totally separate things.
- Commission comes from the seller’s side of the transaction
- Buyer’s premium is part of the buyer’s purchase cost
They serve different roles, even though they’re both part of the overall auction ecosystem.
It might feel like an annoying extra fee, but the buyer’s premium actually helps create a better experience with lower starting prices, a wider variety of items (not just high-end pieces) and well-organized, well-marketed auctions. Without it, auctions would need to build those costs into item pricing, which would mean fewer deals and less flexibility.
In short, a buyer’s premium isn’t a hidden fee, it’s just a different way of structuring costs.
For our auctions, the buyer’s premium scales down as the price goes up, so while most items are in the 18% category, once you get into items that sell for over $500, the premium percentage is reduced. You can find a breakdown chart on our auction terms.