The auction house receives the additional fee charged to the winning bidder on top of the hammer price. For example, if a painting sells for $10,000 and the premium is 10%, the buyer pays a total of $11,000, with the auction house retaining the extra $1,000.
This surcharge serves as a crucial revenue stream for auction houses, covering operational costs such as marketing, staffing, and venue maintenance. It allows them to offer competitive services and attract both buyers and sellers. Historically, this practice has evolved alongside the auction industry, adapting to changing market dynamics and technological advancements. The structure and percentage of this fee can vary significantly between auction houses and even specific sales.
