Collector's Guides
Buying at Auction: How to Calculate a Lot's Final Price
Many new collectors base their budget on the hammer price, only to be surprised by the final invoice. The smart approach is to start with your total budget and work backward to determine your maximum bid.
The Formula
Final Price = Hammer Price + Buyer's Premium + Online Bidding Fees + Shipping + Applicable Taxes.
Fees to Identify Before You Bid
- The auction house's buyer's premium, found in the terms and conditions of each sale. This typically ranges from 25% to 30% (incl. VAT) at traditional auction houses.
- Online or 'live' bidding fees, which can add another 1.8% to 3.6% (incl. VAT) depending on the platform.
- Shipping, packing, and insurance costs.
- Storage fees, if you are slow to collect your lot.
- Customs duties and taxes, for any international shipment.
Setting Your Maximum Bid
Divide your total budget by (1 + the combined fee rate).
For example, let's say your total budget is €1,280. (Note: MDP Auction invoices in euros (EUR); US dollar figures are indicative only).
- With a combined 28% in fees: your maximum bid is approximately €1,000
- With 10% in fees: approximately €1,163
- With 0% in fees: €1,280
The lower the fees, the higher you can bid for the same total budget.
A Complete, Step-by-Step Example
Consider a lot with a hammer price of €800. Here is an illustration with indicative rates:
| Auction House A | Auction House B | MDP Auction, registered before 12/31/2026 | MDP Auction, registered after | |
|---|---|---|---|---|
| Hammer Price | €800 | €800 | €800 | €800 |
| Buyer's Premium | 27% (incl. VAT) = €216 | 20% (incl. VAT) = €160 | 0% = €0 | 10% = €80 |
| Online Bidding Fee | 1.8% (incl. VAT) = €14.40 | €0 | €0 | €0 |
| Total | €1,030.40 | €960 | €800 | €880 |
The difference between two auction houses can exceed €200 on a single lot. Across multiple purchases, this adds up to a significant amount.
Three Pitfalls to Avoid
- Confusing pre-tax and post-tax rates. Always check if advertised rates include VAT or other sales taxes.
- Forgetting online bidding fees, which are often added on top of the buyer's premium when bidding remotely on certain platforms.
- Overlooking shipping costs and customs duties for international deliveries.
Pre-Bidding Checklist
- Read the sale's terms and conditions.
- Note the buyer's premium and any online bidding fees.
- Factor in the costs of shipping, packing, and insurance.
- Check your country's applicable customs duties or taxes.
- Calculate your maximum bid using the formula above.
- Set your absentee or automatic bid at this amount, and no higher.
At MDP Auction
Members who register before December 31, 2026, pay zero buyer's premium, for life, and enjoy free shipping (excluding any applicable customs duties and taxes). After this date, the lifetime buyer's premium will be 10%. You can create your free account to take advantage of this offer.
For a detailed comparison with Drouot, the historic Paris auction hub, read our article: "Buyer's Premiums at Auction: Drouot vs. MDP Auction."
Frequently Asked Questions
Are fees calculated on the hammer price? Yes, fees are almost always calculated as a percentage of the final hammer price. Always check the specific terms of each sale.
Do I have to pay to bid? No, you only pay if you win the lot.
How soon do I need to pay? At MDP Auction, payment is due within 7 days of the auction's close.
Further Reading
- Buyer's Premiums at Auction: A Comparison of Drouot and MDP Auction
- Buying at Auction with No Fees: The MDP Auction Offer
- How Online Sales Are Changing the Game for Collectors