Division (7)

The owners of the goods who wish to sell ‘consign’ the merchandise to the auction house, which provides selling expertise, arranges the auction, produces a catalogue and arranges advance publicity. Goods are usually offered for sale as individual items (so-called lots). Even items that form part of an entire collection are usually split up for sale into individual lots. The auction house sells the property as the agent of the consignor, billing the buyer for the goods purchased and remitting to the consignor the monies received after deduction of commission, expenses and taxes. The percent commission charged to the consignor/seller is commonly referred to as the ‘vendor’s commission’ (or ‘seller’s commission’); this commission is usually calculated on the ‘hammer price’, the price at which the merchandise is knocked down to the final bidder. Persons buying at auctions are also charged a percentage of the hammer price (known as the ‘buyer’s premium’).