Current Articles | Archives | Search
MILLERSBURG, Ind. -- People heading to the Carriage RV auction Feb. 21 may want to bring some extra money, one Elkhart area supplier told RV Daily Report after he realized bidders will be paying an extra 12 to 15 percent just for the privilege of bidding on an item.
Marv Miller, president of Intertek Distribution, a wholesale lighting distributor serving the RV industry, said he is baffled as to why the auction company is charging so much money, especially in this economy.
"The goal of any auction is to attract bidders," he explained. "The more buyers there are, the higher the prices the company will command during the auction. But, if buyers have to pay a 12 percent premium just to bid on site or a 15 percent premium to bid online, plus 7 percent sales tax if they don't have an exemption, I think the auctioneers are hurting themselves in this process."
Miller noted that his company held an auction a year ago to liquidate some unwanted inventory and his company paid a 7 percent fee for most items, or 3 percent for vehicles like forklifts and trucks. In fact, the highest premium he has ever seen at an auction is 10 percent, but even then, big ticket items incurred just a 3 percent fee.
But, at the Carriage auction, Myron Bowling Auctioneers makes no such distinction -- everything sold will incur a 12 or 15 percent premium.
Miller said he opted to pay the fees on behalf of buyers bidding at his auction because he knew if more buyers showed up, he'd get more bids and wind up with higher prices paid for the items he was auctioning.
The receptionist at Myron Bowling Auctioneers refused to allow RV Daily Report to speak with any of the auctioneers, but she noted it was standard company policy to charge all buyers the high premium. The company is the sole recipient of the fee, she noted. It is not shared with the bank that ordered the liquidation.
That means, if someone were to pay $50,000 for one of the finished fifth wheels, which the auction company calls "travel trailers," the buyer will pay at least $7,500 in additional fees to the auction company.
Last Thursday, Miller sent an e-mail to Myron Bowling sharing his views on the fees the auctioneer is charging. "Why do you believe it is fair or right to charge a 12 percent buyer's premium -- on everything?" Miller asked. "You ask people to come to an auction, waste their time to stand waiting for an item to sell, and charge 12 percent for high ticket items as well as inventories. What kind of buyers are you expecting to come to this auction?
"Looking at the sale bill, you will need a lot of wholesale buyers that can buy bulk and in large lots," Miller wrote. "I refuse to go to an auction where I have to pay for the 'privilege' to purchase.' I have never seen any auction company try to gouge our industry, and buyers, with a 12 percent fee."
Miller closed his note by explaining the seller shouldn't have to pay anything and that he bank or the seller should pay these fees instead.
Bowling responded to Miller's message by saying, "Sorry you're not coming. I can't change the buyer's premium, but you can adjust what you pay to account for the premium. The bank has already lost all they want to on this business."
Although he is no longer planning to participate in the auction because of the fee, Miller cautions those people who plan to attend to be careful to ensure they aren't caught up in "auction fever."
"People have a tendency to set a budget for what they intend to buy. But, as prices climb, bidders may go over budget on some times. Then, if they win the bid, they will be greatly surprised at checkout to learn that they must pay 12 to 15 percent more than they expected," said Miller. "They forget they are paying premium dollars on top of the purchase price.
"These fees are unheard of in Northern Indiana, especially in this economy," he added. "I suspect the bank or the auction company is trying to take advantage of this situation. But, they are forgetting that 300 suppliers in the RV industry, including myself, have lost money on the Carriage closure. And for those of us trying to buy our inventory back, they are going to charge us a premium to do so. It's wrong and not fair at all."