Splash

Prior to 1975, there was no such thing as Auction Buyer's Premium. Then Sotheby's and Christie's both decided to add 10% to the final price paid by the buyer, to be retained by the auction house. Naturally, there was outrage, but they persisted and eventually, the buyers paid it and other auction houses followed suit.

Over the years the fees have steadily increased, with a tiered reduction in the headline rate over certain, eyewatering, price thresholds. For watches and jewellery, the major auctioneers charge between 23% and 27% (plus VAT). Of course, an increasing buyer's premium allows auction houses to tempt naïve sellers with offers of 0% commission, knowing that they are still earning 25% at the other end (or, indeed, to offer exceptional clients a cut of this 25% to secure a prize lot). This assumes that sellers don't join up the dots and see how little of the 'achieved price' they are receiving. Grateful to have their commission cut from 15% to 10% and a few sundry fees waived they don't realise that they are effectively being charged the buyer's premium too, as it is part of the total price paid that they never see.

There is a justification for this charging regime if the preparation of a watch for sale requires forensic analysis, deep scholarship, and expensive expertise, but what are we to make of an auction house charging the same fee on a 2022 watch, with box and papers, still under manufacturer’s warranty? What level of expertise is being charged for here?

At the other end of the spectrum, watches that do require knowledge and diligence are coming under scrutiny from online sleuths such as Jose Pereztroika (perezcope.com) and others, who are uncovering an increasing number of watches that are not quite what they appear, either with swapped dials, added/removed dial printing, or largely built from bits. Admittedly, watch auction specialists have to be generalists while amateur nerds can be focused on a tiny area of the market, but if you are taking over 30% in fees on watches making £1,000,000+ you need to be right. Of course, the traditional auction model is expensive. World tours, viewing soirées, and gala events don’t pay for themselves. That is where a significant chunk of the ‘achieved price’ goes.

Watch Collecting takes the opposite approach, connecting a buyer with a seller at a price agreed upon through an online, 7-day, auction format, with class-leading photography and direct communication during the sale, which is about as stripped-back as you can get. There are no fees or commissions to sell, and the buyer’s premium is only 6% plus VAT with a minimum charge below £8300 of £600. The market price is still the market price, but far more of it ends up in your wallet.

If this sounds more appealing than a champagne reception in Geneva, get in touch today.

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