29 Nov 2006
Auction Fees & Commission
It seems that there's still some confusion about the new Auction Fees & Commission so we would like to try and straighten it out.
The easy bit: The Procurement Order Fee is the same as ever: 1 PED for every day you wish the order to remain on the Auction. This fee is paid up-front when creating the order.
The complicated bit: Placing an item on the Auction involves two combined charges: The Base Fee and the Regressive Markup Commission.
The Base Fee: A Base Fee of 0.5 PED is charged when placing any item on the Auction. This is a one-time fee paid up-front when placing any item on the Auction.
The Regressive Markup Commission: This commission is paid on the difference between the Opening Bid and the item's TT value (the Markup). The commission begins at 5% but gradually decreases as the Markup value increases (a Regressive Commission). Complicated as it might seem, it actually ensures that items with large Markup values don't end up paying ridiculously high commissions. In fact, a maximum commission ceiling of 100 PED is in effect. We've replaced the graph in the Auction Section of the Participants Guide to show the Commission Percentage versus Markup Value instead.
The Regressive Markup Commission is paid up-front with the Base Fee when placing an item on the Auction. Remember, the commission is based on the difference between the Opening Bid and the TT value. If you want to keep the initial commission low - keep the Opening Bid low.
The last bit: When an item is finally sold at Auction, the Regressive Markup Commission is again calculated, but this time on the difference between the final Sale Price and the TT value. Then, the original commission you paid to place the item on the Auction is deducted and the remainder is charged against the final Sale Price.
We haven't included the exact formula, not because it's secret, but because it feels just a bit too hard core. Anybody talented with mathematics and who has the interest can easily work it out by placing two items on the Auction and doing some math. Anyway, we hope this sheds a little more light on Auction Fees & Commissions.
Thanks,
Development Team
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