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.

 

Editing Buyer's Premium on 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, that if a bidder was marked as 'Online' during check-in and the event is using an Online Premium, zeroing out (removing) a Buyer's Premium will not remove the premium from the invoice as the Online Premium will remain. See the 'Troubleshooting' section below for more information.

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 Buyer's Premium Override window appears. Enter a new percentage into the 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.   
5. Click the Ok button. The Buyer's Premium will be adjusted on the invoice.
   • Altered Buyer's 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 Buyer's Premium is 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.

If the steps above do not alter the Buyer's Premium on the invoice, see Why Can't I Edit the Taxes or Premiums on an Invoice?

 

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 Premium From an Invoice

If the invoice does not have any payments applied to it and editing the 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 attempting to zero out the BP will still result in a premium being displayed on the invoice. If the Premium should be zero for all of the bidder's lots, return to the bidder check-in page and uncheck the Online box (be sure to click the Disk icon in the top right corner of the page to Save). Then, click on the premium on the invoice and enter a 0% premium. This should now remove the premium from the invoice.

If only some of the bidder's lots should have no premium, return to the bidder check-in page and register another paddle number to the bidder. Leave the Online box unchecked for that second paddle number. Any lots clerked (or re-clerked) to that second paddle number can have the premium removed.

 

 

Related Articles:

• Invoice Guide
• Tax Summary Report