A buyer's premium is a percentage added to the winning bid and paid by the buyer. If you win a lot at $1,000 and the premium is 15%, you pay $1,150. Auction houses use it to earn on each sale without taking everything from the seller. This guide explains how it works, how to disclose it fairly, and how to set it up in BidKing Pro.
What a buyer's premium is for
- It pays the auction house. The premium covers the cost of running the sale: listing, marketing, the platform and payment handling.
- It keeps the seller's commission lower. Many houses charge both, a seller's commission and a buyer's premium, so neither side carries the whole cost.
- It scales with the price. A percentage grows with the value of the item, which suits sales where prices vary widely, such as vehicles, art, collectibles and equipment.
Rates vary a lot by market and item type, so there's no single "normal" figure. Look at what comparable auctions near you charge, and set yours with your margins and your bidders in mind.
How BidKing Pro applies it
The buyer's premium is a plugin bundled with BidKing Pro and PrizeX. For Starter and Plus it's available from Add-ons in your admin panel.
- Per auction. You set the percentage on each auction's admin form, from 0 to 100, to two decimal places. Lots with no premium settle at the plain winning bid.
- Once, at settlement. The premium isn't added to each bid. When the auction ends and the winner is declared, the winning bid is multiplied by the premium and rounded to the cent. The same happens if an admin picks a winner by hand.
- On every auction type that ends with a winner: English, sealed, penny, unique-bid and reverse.
- Not on Buy Now. Someone who buys a lot outright pays the Buy Now price only.
- After the reserve check. If the lot has a reserve, the winning bid itself must reach it. The premium is added afterwards, so it can't push a low bid over the reserve.
The winner then pays the total, the winning bid plus the premium, through the normal cart and checkout.
Disclosing it to bidders
A premium is fair only if bidders know about it before they bid. Otherwise the final bill is a surprise, and in many places hidden charges also break consumer law.
- On the lot page. BidKing shows a "Buyer's Premium" badge with the percentage on every lot that has one.
- In your terms. State the rate, that it's added to the winning bid, and whether tax applies on top.
- In the listing text, for high-value lots. A line such as "A 12% buyer's premium applies; a winning bid of $5,000 totals $5,600" removes any doubt.
A worked example
The figures below are an illustration, not a suggested rate. The lot is a used motorbike with a reserve of $3,000 and a buyer's premium of 10%.
| Winning bid | Reserve met? | Premium (10%) | Winner pays |
|---|---|---|---|
| $2,900 | No: lot ends unsold | — | — |
| $3,000 | Yes | $300.00 | $3,300.00 |
| $4,250 | Yes | $425.00 | $4,675.00 |
Note the first row. Even though $2,900 plus the premium would come to $3,190, the lot doesn't sell, because the reserve is checked against the bid alone.
Things to decide before you switch it on
- Tax. In some countries, sales tax or VAT applies to the premium as well as the item. Ask your accountant how to charge and show it.
- Seller payouts. On a marketplace with several sellers, decide whether sellers share the premium. Make sure your seller terms say so.
- Consistency. Bidders find it easier to trust one rate for a whole category than a different rate on every lot.
Common questions
What is a buyer's premium at an auction?
A percentage added to the winning bid and paid by the buyer. A $1,000 winning bid with a 15% premium costs the buyer $1,150.
Is the buyer's premium charged on Buy Now in BidKing?
No. It's applied only when an auction ends with a winner. Buy Now purchases pay the Buy Now price.
Which BidKing edition includes a buyer's premium?
BidKing Pro and PrizeX bundle it. Starter and Plus sites can add it from Add-ons in the admin panel.
Does the buyer's premium count towards the reserve price?
No. The winning bid itself has to meet the reserve. The premium is added after that check.