Understanding Buyer’s Premiums
A buyer’s premium is a percentage fee added to the winning bid at the close of an auction. For example, if an item sells for $100 and the buyer’s premium is 5%, the winner pays $105 total.
Many auction organizers use this fee to cover platform costs, credit card fees, or event expenses.
Why Auction Hosts Use Buyer’s Premiums
- Covers transaction costs: Helps offset credit card processing or platform fees.
- Keeps starting bids lower: Instead of increasing item prices, the premium ensures necessary costs are covered.
- Supports fundraising goals: More funds go directly toward the organization’s mission.
- Encourages competitive bidding: Bidders focus on the item price, with the premium added transparently at the end.
How Buyer’s Premiums Are Calculated
The buyer’s premium is a set percentage of the final hammer price. Common rates are 3%–10%, but they can vary.
Example:
- Winning bid: $200
- Buyer’s premium: 5%
- Total owed: $210
This amount appears on your invoice after the auction closes.
When the Buyer’s Premium Applies
- It is only charged to the winning bidder of an item.
- It’s automatically included in the total due on the invoice.
- It may apply to all items or only certain categories depending on the organizer’s settings.
- Some organizers may choose not to charge a buyer’s premium at all.
How to See the Buyer’s Premium Before Bidding
- The buyer’s premium amount is usually displayed on the item page or event terms.
- It may also be visible in the bid confirmation window before placing your bid.
- Always review the terms before participating in an auction to avoid surprises at checkout.
Tips for Bidders
- Factor the buyer’s premium into your maximum bid.
- Check the event’s terms to understand if it applies to every item.
- If unsure, contact the organizer for clarification before bidding.
- Remember that the premium is separate from shipping or sales tax.
Related Guides
- How to Pay for Items I Won
- How to Pay Your Invoice
- Do I Need to Register for an Account Before I Can Bid?
- Adding Custom Bid Increments
- How Will I Be Notified If I’m Out Bid on an Item?
Frequently Asked Questions
What is a buyer’s premium?
A buyer’s premium is an additional fee, typically a percentage of the winning bid, added to the total amount owed by the winning bidder.
Who pays the buyer’s premium?
The winning bidder pays the buyer’s premium, which is added to their invoice total at checkout.
How is the buyer’s premium calculated?
It’s calculated as a set percentage of the winning bid. For example, a 5% premium on a $100 winning bid adds $5 to the total amount due.
Why do organizers charge a buyer’s premium?
It helps cover payment processing and platform costs, allowing more of the winning bid amount to go toward the organization’s cause.
Is the buyer’s premium optional?
No. If the organizer includes a buyer’s premium in their auction, it’s required for all winning bidders where applicable.
Is the buyer’s premium refundable?
Refunds depend on the event’s refund policy. Typically, the buyer’s premium is non-refundable unless the item is withdrawn.
Will the buyer’s premium be shown before I bid?
Yes. The premium amount is usually displayed on the item page or event terms, and it’s reflected in your invoice after winning.
Does every auction include a buyer’s premium?
No. Some organizers choose not to charge a buyer’s premium. Always review the event terms before bidding.
Is the buyer’s premium taxed?
Depending on local laws, sales tax may also apply to the buyer’s premium. Check your invoice or event terms for details.
Can I see the buyer’s premium on my invoice?
Yes. The buyer’s premium amount is listed as a separate line item on your invoice for full transparency.
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