The generations before us seem to always say: "In our times, a dollar went a lot further, much further than it does today. I remember when I could buy an ice cream sundae for $0.25 and a gallon of milk was $0.50." We LOVE the generations before us and can learn a lot from them. However, the old ongoing joke of, "I used to walk to school uphill both ways in a blinding snowstorm!" just isn't true, and a dollar didn't go any further than it does today.
So, before you get too nostalgic, remember that the median household income in 1967 was $7,143 and the minimum wage was $1.40 per hour. In 1967 if you had to pay $4.75 like you do today for an ice-cream sundae, well, none of our past generations would have ever been able to afford to enjoy one, let alone take the entire family out for ice cream. But now, the average household income is 7 to 8 times what it was in 1967 and so is the cost of that same ice cream sundae.
Average households make more money today than they did in 1967 and businesses charge more for their product today than they did in 1967. Any business that attempted to charge $0.25 for an ice cream sundae today, wouldn't be able to cover the cost of the ice cream, let alone pay for the purchasing of the toppings. They also couldn't afford to hire staff and provide jobs for someone to serve the sundaes. That ice cream sundae company would be out of business, as the costs would outweigh the money, they could bring in selling one ice cream sundae. Prestige Estate Services is no different. While we may not serve ice cream (generally) we are faced with the same issues every other business is.
As time advances, the cost of all supplies generally goes up, as do wages and we, like every other company, over time, need to slowly adjust our prices to cover some of the increased expenses associated with putting on these wonderful estate sales. Our sales help to match our client's items that are for sale, with our wonderful customers so they can purchase these gently used items at great prices, compared to the in-store retail amounts we otherwise pay. Heck, that's one of the reasons we all love to shop estate sales!
Where Did The Buyer's Premium Come From Anyway?
The used goods market/industry started to charge a buyer's premium for several reasons (some call it a credit card fee or other various names you may be familiar with). Still, it’s called a buyer’s premium, and the first and foremost reason the industry started using it was, that often the final sales price is unknown. In auctions and estate sales, the price of an item changes drastically within a matter of seconds to a few days in comparison to where the item was originally priced at, at the start of the event.
Now compare that to most in-store retail environments that don't allow bidding or negotiations or daily discounted reductions and those who know their exact costs to acquire their good can then, in turn, know how much to sell the item for. Companies do this to make sure they are operating profitable and sustainable profit margins to stay in business and that is why the Buyer’s Premium is associated with the rapidly changing prices in the used goods industry.
It helps to cover their costs of extra supplies etc., and overall costs to put the event on in a rapidly changing cost-to-profit margin environment. Due to this atypical retail purchasing power that comes from the bidding and bargaining process and the deep discounts that can be found at estate sales, it's nearly impossible to appropriately and very so slightly, over time, raise the price of every item to match rising or inflationary costs.
Our industry simply uses a buyer's premium to address the increases in various cost levels. This is a more simple approach than raising the cost of a lamp for sale, from having a price tag of $7 to writing it up for $7.35. If you buy 10 or 20 items, adding up the extra pennies and dollars, etc. on the back end of each of the items you wish to purchase, becomes complex and is unnecessarily burdensome to shoppers. So, we like thousands of other auction and estate sale companies keep it simple, by just adding a small buyer's premium to the subtotal of the purchase to help us to cover these rising costs.
The extra charge is always put to good use. Buyer’s premiums are common these days and are continuing to grow, about 80% of all auction houses and estate sale companies now charge some amount of buyer’s premium in one format or another. Some call it a credit card fee, labor fee, etc. There are many names for it but the actual and proper name for it in our industry is a buyer's premium. We charge the smallest buyer’s premium in comparison to 99% of companies and we are upfront about what it is, and why we charge it. We do not hide behind it, and we are proud to offer great sales and continue to staff wonderful employees to help aid our wonderful shoppers and patrons of our sales
The signage at the sale posts all of our terms and conditions and they state that all entrants agree and understand that we charge the buyer tax, as required by local, state, and federal law, and a small buyer’s premium.
Thank you for taking a moment to learn and understand what a buyer's premium is and why we charge it. Ultimately it helps us as a small business to continue to be able to put on more wonderful shopping opportunities for buyers just like yourself. If you have any further questions don't hesitate to get in touch with us. Thank you for your cooperation and understanding and we look forward to many great sales with lots of wonderful items for you to shop very soon!
