Invaluable Raises Fees to Auctions Companies and Buyers

Invaluable has entered into an agreement with eBay to market the Invaluable auctions on eBay.  EBay will use what it calls a new Live Auction Platform.  In September 2014, Invaluable began to inform Auction Companies that use the Invaluable live auction system that the percentage of sales that Invaluable takes will increase to 5%.  If the Auction Company will sign an exclusive agreement with Invaluable they will decrease that fee.
 

What does this mean to Buyers?  Traditionally, Auction Companies charge a higher buyer premium to online bidders than they charge to in-house bidders.  Some providers of software which operate online bidding for Auction Companies put a cap on how many percentage points the Auction Company may charge above the in-house premium to online bidders.  Examples include LiveAuctioneers, Proxibid and Invaluable.  As an example, 3% above the in-house premium is typical.  Therefore, is the in-house Buyer premium is 12%, the online can not exceed 15%.

The Invaluable fee increase to 5% will more than likely be passed along to Buyers by the Auction Companies, thereby costing Buyers who participate online more.

A buyer premium is a percentage added to the winning bid of an item.  If your winning bid was $1,000.00 and the Buyer Premium was 15% then you pay $1,150.00.  Buyer premiums began years ago as a method to decrease the cost to Sellers and pass that cost to Buyers and for other reasons.  Premiums vary from Company to Company.  Ten percent (10%) to Twenty-Eight percent (28%) or even more is charged.

As a Seller, this all seems good  provided I can pass the cost along to buyers.  As a Buyer, I am willing to pay the premium taking into consideration the value of the item.

EBay offered live auctions for years.  In 2008 it discontinued it's arrangement with LiveAuctioneers and likewise, offering live auctions.  It's entry back into the live auction market is more than likely driven by lower sales and increased competition.  Invaluable's offer to reduce the fee to Auction Companies who sign an exclusive deal with them is likely also driven by increased competition in the live auction business.

On final point worth mentioning concerns the value of the item being purchased.  The Invaluable arrangement with EBay does not mean that items will be more valuable.  In fact, many EBay users are well educated Buyers that know the value of what they are purchasing. No marketing system or number of buyers makes an item more valuable.  It does increase the likelihood that the item will reach it's value.