Debt Collection for Auction Houses and unpaid auction fees
Debt Collection for auction houses has a vital role to play in the long term future of the industry. The industry relies on commissions, auction fees and winning bids being paid by individuals and businesses that use their services. According to figures released by the EIG (Essential information group), there has been a steady increase of revenue within the auction industry for the past few years pro rata. This is mirrored by the majority of the auction house sector.
The UK’s auction house industry is made up of many different entities. From regional auction houses to the leading metropolitan auction houses such Christie’s and Sotheby’s, auction houses have cemented their place in society.
Different types of auctions
There are many different types of goods, stock and chattels. Add to this the agriculture sector were livestock is auctioned then you more a less have a complete overview of the auction industry. The main key types of auction are:
- Property auctions
- Antique auctions
- Construction auctions
- Agriculture auctions
- industrial auctions
- Food and drink auctions
- Cars and other Vehicles
- Consumer Goods
- IT and Office
- Manufacturing machinery
Other lesser known types of auctions take place for aviation and marine, scientific and medical and beauty. There are also more niche auctions like military auctions and classic car auctions.
Once upon a time, auctions were usually conducted in person by willing buyers. With increasing use of technology, the landscape for the auctioneer has very much changed over the years. Online auctions are very much prevalent in modern auctioneering. There is of course the well known Ebay which is the most commonly used consumer focused site along with Etsy.
For the more conventional and commercial auctions, websites such as the-saleroom cater for collectors and buyers seeking antiques or other collectables. John Pye & Sons is a famous name for their wide range of auctions. They specialise in general auctions, vehicle auctions, insolvency auctions and property auctions.
Agricultural auctions can be offered with a wide range of commodities. From livestock, land to tractors and farming machinery. Well known sites that offer such auctions are Asset auctions, Brown & Co as well as Clarke and Simpson auctions.
Auction fees and charges
As you will know, an auctioneer is the owner of the item. An auctioneer and auction houses charge fees by way of commissions to the seller and to the buyer. These fees should always been taken into account when buyers and sellers alike use the services of auction houses. Buyers auction fees are normally added to the auction winning bid. This is often referred to as the hammer price which is the highest bid and the final bid. This is known as a buyers premium.
For goods, stock etc sold via auction, a commission will be payable. This applies to either online auctions or in person.
Other non standard charges that can be payable by the seller relate to the items in question and will be made clear at outset. Additional fees could include storage fees, delivery or such like. Depends on the items in question.
Unpaid Auction Fees
Unpaid auction fees can occur in a multitude of ways. If the terms of the auction are not kept then unpaid fees can become due. A great example of this is a property auction. On the day of the auction, the winning bidder normally pays 10% of the purchase price as a deposit or reservation fee. Each property auction will have a payment deadline attached to it but its usually around 28 days maximum.
It has been said that non-paying bidders are a huge problem in the art auction world with a high number of defaulting buyers. It is not limited to the art world though. It is a common occurrence in all types of auctions, commercial and consumer. It is a problem that most auctioneers and certainly all auction houses will have encountered at some point.
In 2018, well known Auctioneers Sotheby’s a New York art dealer with a claim for $6.5m after he failed to honour his ‘winning bid’ at one of their auctions. Sotheby’s consequently sold the painting for $4.4m and the Art Dealer had to pay the $2.1m difference
Debt Collection for auction houses
Frontline Collections have recovered unpaid auction fees on behalf of many auction houses over the years. A full and free assessment is provided of all cases prior to any action being taken. Debt Collection for auction houses and their unpaid fees is an area of specialism for us and we are well versed in the typical scenarios that play out every day in the UK.
Whilst non paying bidders can be a problem for many sectors of the Auction industry, we have also helped many auction houses with the recovery of unpaid commissions due to them. This is more common in the agricultural sector where cash is still king in many circles of the farming community.
If your auction house is owed unpaid fees or commissions, speak to our friendly team today for immediate advice on your options to recover what is owed.