A buyer's premium is the auction house's cut, charged on top of the hammer price — the winning bid — and paid by the buyer. Rates are set by each house and vary widely — often from the mid-teens at smaller regional houses up to roughly 25–30% at the major international ones, and they can step by lot value within a single sale. The premium is not negotiable, so always check the specific auction's published terms before bidding. A $400 winning bid at a 20% premium costs $480 before any sales tax.
The premium matters because it is easy to forget in the heat of bidding and it changes the real cost of inventory. A reseller who bids to their comps without subtracting the premium first will routinely overpay, leaving no room for marketplace fees and profit on resale.
For costing, the buyer's premium (and any applicable tax) is part of the item's true acquisition cost — the cost basis that should be recorded against the piece, not just the hammer price.
Related terms
Cost Basis
The total amount invested to acquire an item — purchase price plus associated costs — used to calculate profit and cost of goods sold when it sells.
Comps (Comparables)
Recent sale prices of comparable items, used to estimate what a one-of-a-kind or vintage piece is worth before buying or listing it.
Final Value Fee
A marketplace's commission on a completed sale, charged as a percentage of the total the buyer pays — including shipping and tax.
Specific Identification
An inventory accounting method that tracks the actual cost of each individual item, rather than averaging or formula-based costs — ideal for one-of-a-kind goods.