What is a Buyer’s Premium?

Understanding the Buyer’s Premium

A buyer’s premium is an additional fee that the winning bidder must pay on top of their final bid amount in an auction. This fee is typically a percentage of the winning bid and is added to the total purchase price. While buyer’s premiums are most commonly associated with traditional auction houses, they are sometimes used in online charity auctions as well. The purpose of a buyer’s premium can vary, but it often helps cover administrative costs or provides additional funds to the benefiting organization.

For example, if an auction has a 10% buyer’s premium and a winning bid is $500, the buyer would pay an additional $50, bringing the total cost to $550. The auction host should clearly disclose the percentage or fixed fee in advance so bidders can make informed decisions when placing their bids.

Buyer’s Premium on Our Platform

On CharityAuctionsToday, the buyer’s premium is added to the winning bidder’s invoice. This buyer’s premium is added to winning bidders’ invoices, not deducted from the total funds raised by the auction host.

On our site, this buyer’s premium is generally 5% of the pre-tax total of the hammer price. On your invoice, the buyer’s premium is listed below each item’s total and their accumulated tax.

This buyer’s premium serves to offset some of CharityAuctionsToday’s costs of operation, so that we can pass on further savings to the organizations who use our site and continue to do so for years to come. 

We strive to serve nonprofits and charitable causes that have limited resources and manpower. CharityAuctionsToday makes it possible for them to reach fundraising goals with fewer hands at the helm, with less budget, and with little to no technological savvy. The buyer’s premium helps us to continue to help these mission-driven organizations achieve their fundraising goals.