Coin Consignment Terms: Commission, Fees, and Payout

Coin consignment terms set three things: the commission you take from each sale, the fees you pass to the consignor, and when you pay the net. Most dealers take the commission as a percent of the hammer price, let the buyer pay the buyer's premium on top, and pay the consignor a fixed number of days after the buyers pay. Write each of these into the agreement before the first coin is cataloged.

The rest of this post goes through each term, with worked numbers for a real-size consignment: a few hundred coins sold across one or more sales.

What goes into a coin consignment agreement

A clear agreement answers the questions a consignor will ask after the sale. At minimum it covers:

• The coins. A list with a description, grade, and cert number for each coin, signed by both of you at intake.
• The commission. The percent, and the base it is taken from (hammer price, or hammer plus premium).
• Fees. Grading, photography, catalog, insurance, and any minimum fee per lot.
• Reserves. Which coins have one, who sets it, and what happens when a coin does not reach it.
• Where and when. Which sales or platforms the coins go to, and how long you can hold them.
• Unsold coins. Whether they return, go to the next sale at a lower start, or go to a fixed-price channel.
• Payout. When you pay, how (check or transfer), and what statement comes with the payment.

Laws on consignment, sales tax, and reporting differ by state. Have an attorney read your standard agreement once, and ask your accountant how to report consignor payouts.

How the commission and buyer's premium work together

The hammer price is the winning bid. The buyer's premium is a percent added on top and paid by the buyer. Your commission is a percent taken from the consignor's side.

Take one coin, an 1889-CC Morgan dollar, in a sale with an 18% buyer's premium and a 15% commission on the hammer:

Line	Amount
Hammer price	$1,450.00
Buyer's premium (18% of hammer)	$261.00
The buyer pays, before tax and shipping	$1,711.00
Your commission (15% of hammer)	$217.50
Net to the consignor	$1,232.50

When you run the auction yourself, you keep the commission and usually the premium: $478.50 on this coin. When a platform runs it, the platform's terms decide what part of the premium you get and what fees it charges you. Platform fee schedules change, so read the current terms on each platform before you quote a rate to a consignor.

Commission on the hammer or on the total?

Most agreements use the hammer price as the base. If you take the commission from hammer plus premium, the consignor pays commission on money the buyer paid to you, and many consignors will ask why. Whichever base you choose, the statement must show it on every line.

Common commission structures

One flat rate

One percent for the whole consignment. It is easy to explain and easy to check. Rates differ a lot between dealers, by the size of the consignment, and by how much work the coins need, so there is no standard number to copy. Set a rate that covers your cost to photograph, describe, list, and ship each coin.

A sliding scale

A higher rate on the first part of the sales and a lower rate above set amounts. It rewards a large consignment. Here is one scale applied to a consignment that sold $48,215.00:

Band	Rate	Sales in band	Commission
First $10,000	20%	$10,000.00	$2,000.00
Above $10,000	15%	$38,215.00	$5,732.25
Total		$48,215.00	$7,732.25

The effective rate is about 16%. Show the bands on the statement, or the consignor cannot check your math.

A rate per coin group

Bullion-type coins and key-date rarities need different work. Some dealers set one rate for coins under a value and another for coins above it. The cleanest way to run this is a separate consignment for each group, each with its own rate and its own statement.

Minimum fee per lot

A low-value coin costs you as much to photograph and list as a high-value one. A minimum fee per lot, such as a few dollars, keeps a box of low-grade coins from losing you money. Say in the agreement whether the minimum replaces the commission or adds to it.

Fees you pass to the consignor

List each fee and when it applies:

• Grading fees for coins you send to PCGS, NGC, or another service on the consignor's behalf. Pass through the actual fee and say so.
• Photography or catalog fees, if you charge them apart from the commission.
• Buy-back or unsold fees, if a coin with a reserve does not sell. Some dealers charge a small percent of the reserve so consignors set reserves they mean.
• Insurance and shipping of the coins to you and back.

Take fees from the payout and show each one on the statement. A fee the consignor finds only in the bank deposit is a fee you will argue about.

A full worked payout

A consignment of 312 coins at 15% commission. Three sales later, 287 coins sold for a hammer total of $48,215.00. Twenty coins were graded on the consignor's behalf at $30 each.

Line	Amount
Hammer total, 287 coins	$48,215.00
Commission, 15% of hammer	-$7,232.25
Grading fees, 20 coins at $30	-$600.00
Payout	$40,382.75
Coins not sold yet	25

Round the commission on each coin, not on the total, and add the rounded amounts. The total can differ by a few cents from 15% of $48,215.00, and the consignor will compare the lines with the total.

When to pay the consignor

Pay after the buyers have paid and the return period has ended. A buyer who returns a coin after you have paid the consignor leaves you to claw back money. Common practice is a fixed number of days after the sale; pick a number you can always meet and put it in the agreement.

With coins sold across several sales, decide whether you pay after each sale or once at the end. Paying after each sale keeps the consignor patient. Paying once means one check and one statement. Either works if the agreement says which.

Common mistakes

• No base for the commission. "15%" of what? Write "15% of the hammer price."
• Rates changed after the sale. If you agree to a new rate, change it before you settle and send a new statement.
• Totals from memory. The payout must come from the invoices for the consigned coins, after voids and returns, not from the auction's summary page.
• Unsold coins left in limbo. Say what happens to them, and list them on every statement.
• Paying before the buyer pays. You carry the risk of a buyer who never pays.

How CoinManagerPro handles consignments

In CoinManagerPro, a consignment belongs to one consignor, who is one of your customers. You set the commission and the buyer's premium for each consignment, so two consignments from the same person can have different rates.

The totals come from the invoices for the consigned coins, from any channel: a sale at the counter, an eBay order, or the results of a HiBid or LiveAuctioneers sale you import with the results import. Voided and cancelled invoices do not count. If you change the commission, the commission and payout totals change with it; after you settle, the rates are fixed.

The consignor statement lists each coin sold with its sale date, price, commission, and net, then the totals and the coins not sold yet. You can print it, save it as a PDF, or email it. When you pay, Settle records the date and check number and closes the consignment. CoinManagerPro stores one rate per consignment, so a sliding scale or pass-through fees are worked out by you; use a separate consignment for each rate group. The consignments help article has the steps.