Buyer's Premiums

 

Types of Buyer's Premiums

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There are three types of Buyer's Premiums that can be applied in Wavebid:

1. Fixed Percentage
2. Sliding Scale
3. Cumulative Sliding Scale

Fixed Percentage

A Fixed Percentage Buyer's Premium will apply a flat percentage of the hammer price. For example, if a bidder wins a lot at $100 hammer price and the auctioneer's Buyer's Premium is 20%, the bidder would pay $120.

A company cannot have both a Fixed Percentage and a Scaled Buyer's Premium applied simultaneously.

 

Sliding Scale 

With Sliding Scale fees, the percentage charged generally decreases as the hammer price increases.  Fees are generally applied in a tiered system and are based on each individual lot. For example, a lot selling for less than $200 will be charged a 15% Buyer's Premium fee, while a lot selling for $201- $500 will be charged a 10% Buyer's Premium fee. 

If the bidder wins multiple lots, the Buyer's Premium will be assigned based on the hammer price of each lot. Using our example rates above, if the bidder wins Lot A for $100 and Lot B for $300, they will be charged a 15% fee for Lot A and a 10% fee for Lot B.

Sliding scale Buyer's Premium fees are created at the company level but can be applied at either the company level or the auction level. A company cannot have both a fixed percentage and a scaled Buyer's Premium applied simultaneously.

 

Cumulative Sliding Scale

Cumulative Sliding Scale fees work similar to Sliding Scale fees, except that each lot may be charged more than one percentage, depending on the lot's hammer price. 

Example Cumulative Sliding Scale:

$0 - $200 = 15%

$201 - $500 = 10%

Using the rates above, if the bidder wins a lot for $300, they will be charged 15% on the first $200 (which would be $30) and 10% on the remaining amount (10% of $100= $10) for a total BP of $40.00.

If another bidder wins a lot for $500, they will be charged 15% on the first $200 (which would be $30) and 10% on the remaining amount (10% of $300= $30) for a total BP of $60.00.

Sliding scale Buyer's Premium fees are created at the company level but can be applied at either the company level or the auction level. A company cannot have both a fixed percentage and a scaled Buyer's Premium applied simultaneously.

 

Create a Buyer's Premium Scale 

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Scaled Buyer's Premiums must be created at the company level before they can be applied.

1. Navigate to My Links > Company > Accounting Settings > Scales - Buyer's Premium.
2. Select scale from the Choose a scale to work with drop-down at the top of the page to view/edit an existing scale, or click the Create New Scale button.
3. Enter a name for the scale in the Name field.
   • While this field is not required, if it is not completed, the scale will appear as a blank space in the scale drop-down menu.
4. Enter a Description, if desired.
5. Enter the percentage of your premium in the Buyers Premium field.
6. Enter the highest dollar amount the percentage should be applied to in the Up To ($) field.
   • For example, a 15% premium will be applied to lots with a hammer price up to $100, while a 10% premium will be applied to lots with a hammer price between $101 and $1,000, and a 5% premium will be applied to lots with a hammer price between $1,001 and $2,000.  The 5% rate will also be applied to lots over $2,000 as the rate with the highest Up To amount will be used for any values greater than or equal to the highest Up To amount.
7. If desired, enter the minimum premium dollar amount to be charged in the Min $ field.
   • This is the minimum dollar amount the buyer will be charged, regardless of whether if it is more than the percentage of the hammer price. For example, a 15% premium on a $50 lot would be $7.50, but since the minimum has been set to $10, the buyer will pay a $10 Buyer's Premium fee.  the buyer pays whatever is higher, the percentage or the minimum. 
8. To add additional tiers to the scale, click the Add link.
   • There is no limit to the number of rows that can be added here.
   • To delete a row, click the X located to the right of the appropriate row.
9. Click the Save button in the top right corner of the page.

 

Apply a Buyer's Premium at Company Level

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Buyer's Premiums can be set to default to a specific amount or scale for every new auction made, saving time from having to set it per auction.

1. Navigate to My Links > Company > Profile.
2. Click on the Preferences tab. 
3. Select Fixed, Sliding Scale or Cumulative Scale from the Default Buyer's Premium Type drop-down.
   • If Fixed is selected, enter the desired percentage rate into the Default Buyer's Premium for new auctions field.  
   • If Sliding Scale or Cumulative Scale are selected, choose the specific scale to apply from the Default Buyer's Premium Scale drop-down menu.
   • If a scale is selected, but a percentage remains in the Default Buyer's Premium for new auctions (Fixed Percentage) field, the system will still default to the selected scale. 
   • If a specific scale is not chosen from this drop-down menu, it will need to be selected at the auction level.
4. If the Buyer's Premium is taxable, check the Is the Buyer's Premium Taxable box.
   • For more information on taxes, see Creating Tax Codes.
5. Click the Disk icon in the top right corner of the page to Save.
   • Changes made to the Buyer's Premium at the company level will only affect auctions created after changes are made.
   • Existing auctions will remain unchanged unless changes are made to the Buyer's Premium at the auction level.

 

Apply a Buyer's Premium at Auction Level

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1. Navigate to the appropriate auction on the dashboard and then select Auction > Edit Settings.
2. Click on the Accounting tab.
3. Use the radio button to select Fixed Percent, Sliding Scale or Cumulative Sliding Scale.
   • For Fixed Percentage, enter the percentage amount.
   • For Sliding Scale or Cumulative Sliding Scale, select the specific Buyer's Premium Scale from the drop-down menu.
   • To view the selected scale, click the Show link.
   • A selection must be made from this drop-down in order for the scale to be applied. If a specific scale is not chosen from this drop-down menu, no Buyer's Premium fees will be applied to the auction.
4. To set a cap, enter a dollar amount into the Buyers Premium Cap field. Bidders will not be charged more than this dollar amount, even if the percentage would be higher.
   • For example, if the Buyer's Premium Scale is set to 10% on sales over $2,000 with a $300 cap in place, items selling for $4,000 will be charged $300 even though that is less than 10% of the hammer price.
5. If the Buyer's Premium is taxable, select the Buyer's Premium Taxable radio button located in the Taxes box on the right side of the window.
6. Click the Disk icon in the top right to Save.

   • Changes made to the Buyer's Premium at the auction level will not flow back to the company level, meaning they will only impact that specific event.

   • The auction level Buyer's Premium will override company level the Buyer's Premium.

   • Changes can be made to an active auction, however saved changes will only impact unpaid invoices. Invoices that have full or partial payments applied are locked and will not be impacted by premium changes.

To remove a Buyer's Premium that has been applied to an auction, select the Fixed Percent option and then enter zero into the Percentage field. Click the Disk icon in the top right corner of the page to save the changes.

 

Editing Buyer's Premium on an Invoice

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Wavebid provides users with the option to override the Buyer's Premium that was applied at the company or auction level. Buyer's Premiums can be altered for a specific lot or the whole invoice. This option is only available for unpaid invoices. Changes cannot be made to the Buyer's Premium after a payment (partial or full) has been applied to an invoice.

Please note, for Online bidders, the amount displayed in the 'Premium' column on the invoice will reflect the total of both the Buyer's Premium and the Online Premium combined (assuming an Online Premium has been set for the auction). 

1. Navigate to the applicable auction from the Dashboard, then select Accounting > Invoices.
2. Click on the applicable invoice to open it.
3. Click on any of the individual blue premium values to change the Buyer's Premium for that specific lot.
   • To change the Buyer's Premium for every lot on the invoice, click on the word Premium.
4. The Confirm Premium Override window appears. Enter a new percentage into the Buyer's Premium Percentage field.
   • The percentage entered will override the previously applied buyer's premium, regardless of whether it was applied at the auction or company level. 
   • If either of the fields below are left blank, the value will revert back to whatever was set at the auction level. This means that if changes are being made to both the Buyer's Premium and the Online Premium, both of the values need to be entered into these fields every time an edit is made. 
   • For information on editing the Online Premium Rate, see Online Premiums.
5. Click the Ok button. The Buyer's Premium will be adjusted on the invoice.
   • Altered Premiums will have an asterisk (*) located to the right of the new fee to indicate that it is a variation from the auction default. This asterisk will be removed if the Online Premium and Buyer's Premium are both returned to the default auction rate.
   • To return the Buyer's Premium to the default auction rate, click on the blue Premium amount again, leave the Percentage field blank, and click the Ok button.

Please note, if the Buyer's Premium is changed to zero, but the bidder is being charged an Online Premium, there will still be a value in the Premium column on the invoice. Both the Buyer's Premium and Online Premium would need to be zero in order for that column to reflect $0.00.

 

Taxes

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The Buyer's Premium (BP) can be set to be taxable or non-taxable. If the Buyer's Premium is taxable, invoices can be set up to display the BP tax separately from the sales tax. 

The Buyer's Premium can be set as taxable when applying it to the company or auction level.

 

Edit BP Tax on an Invoice

The default is for the Buyer's Premium taxes to be combined with sales tax and appear in one Tax column on the invoice.

To have the BP tax appear separately from the sales tax:

1. Navigate to the applicable auction from the Dashboard, then select Auction > Edit Settings.
2. Click on the Invoices tab.
3. Select the Options menu from the left side of the page.
4. Check the Show separate buyers premium tax box.
5. Click the Disk icon in the top right corner of the page to Save. Once the changes are saved, the BP and BP tax will be listed separately from the sales tax.
   • In the example below, the Sale Price and Buyer's Premium amounts are listed in yellow, while the Sales Tax and Buyer's Premium Tax appear below those in red.

Users have the option of updating the tax code for the Buyer's Premium directly on a bidder's invoice. 

1. Navigate to the applicable invoice.
2. Click the bottom blue value in the Premium Tax column. A pop-up window will open.
3. Select the Tax Code from the drop-down or check the Tax Exempt box.
4. Click the Set Tax Code button. The Buyer's Premium tax will update on the invoice.

Troubleshooting

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Can't Remove the Buyer's Premium From an Invoice

If the invoice does not have any payments applied to it and editing the Buyer's Premium to "0%" on the invoice does not result in a $0.00 premium, it may be that the auction is using an Online Premium in addition to the BP.

If the Online box was checked when the bidder was checked into the auction, and there is an Online Premium applied to the event, then zeroing out the BP will still result in a premium being displayed on the invoice. Both the Buyer's Premium and Online Premium would need to be zero in order for that column to reflect $0.00. For more information, see Online Premiums.

Buyer's Premium Links on the Invoice are Not Blue (Cannot be Edited)

If any payments have been applied to an invoice, edits to premiums cannot be made.

All payments will need to be deleted/removed from the invoice before edits can be made. For information on removing payments from an invoice, see Payments.

• Please note, issuing a refund on the invoice will not remove the payment. For more information on making edits to invoices, see Invoices.

Additionally, if the invoice template is using advanced customization of the "Details" tab, additional updates may need to be made to that customization to ensure that edits can be made to the premiums directly on the invoice. For more information on invoice options, see Invoice Settings.

The Edited Buyer's Premium isn't Reflecting the Correct Dollar Amount

For Online bidders, the amount displayed in the 'Premium' column on the invoice reflects the total of both the Buyer's Premium and the Online Premium combined. 

This means that, if an Online Premium has been applied to an auction and the Buyer's Premium is edited directly on the invoice, the amount in the 'Premium' column will not reflect that new Buyer's Premium amount, because it will also include the Online Premium amount.

When editing the premiums directly on the invoice, if either of the fields below are left blank, the percentage for that premium will revert back to whatever was set at the auction level. Additionally, the field will be wiped out every time a user returns to make additional edits. This means that if changes are being made to both the Buyer's Premium and the Online Premium, the updated percentages need to be entered into these fields every time an edit is made. 

For example, if a user edits the Buyer's Premium on the invoice and then goes back later to edit the Online Premium, they need to enter the Online Premium percentage and re-enter the Buyer's Premium percentage. If the user just edits the Online Premium percentage and leaves the Buyer's Premium field blank (because the value is correct from when it was edited earlier) that Buyer's Premium percentage will now revert back to the Buyer's Premium that was set auction level, rather than the percentage that was entered on the invoice earlier.

 

 

Related Articles:

• Invoice Guide
• Tax Summary Report
• Online Premiums