A buyer's premium is a percentage the platform adds to your winning bid. It is how many auction sites get paid, since the seller often receives the hammer price while the platform keeps the premium. If the premium is 10% and you win at $500, you owe $550 before anything else is added.
Typical premiums on liquidation platforms land somewhere in the 5% to 15% range, though some go higher on specialty or high-value categories. Some platforms charge a flat rate across the whole site. Others set it per auction, per seller, or on a sliding scale where higher bids pay a lower percentage. The only reliable way to know is to read the terms for the specific auction you're bidding on, not the homepage.
Browsing the liquidation companies directory is a good way to see which platforms publish their premium openly and which make you hunt for it. A site that hides its premium until checkout has already told you something.
The premium gets the attention, but it rarely travels alone. Lot fees are small flat charges added to each lot you win, often a few dollars up to $25 or so depending on the platform and lot size. They exist to cover the labor of pulling, staging and documenting the lot.
Other charges show up depending on the platform. Watch for these:
Payment processing fees. Some platforms add a surcharge, commonly around 3%, when you pay by card, and waive it for bank transfer or ACH.
Pallet or forklift loading fees. Common at warehouse pickups, especially for heavy or oversized lots.
Storage fees. If you don't collect within the pickup window, daily charges can start fast.
Deposit or registration holds. Not a fee exactly, but they tie up cash and sometimes forfeit if you don't complete a purchase.
Shipping is its own category and is almost never included in any of the above. Freight on a pallet can cost more than the lot fee and premium combined, so treat it as a separate line in your math.
Tax is where buyers get tripped up most, because the rules vary by state and by whether you're buying for resale. In many places, sales tax is calculated on the hammer price plus the buyer's premium and fees, not just the bid. That means the platform's cut gets taxed too.
If you're a reseller, a valid resale certificate on file with the platform can often remove sales tax from the invoice. You'd then be responsible for collecting tax when you sell the items. Platforms handle this differently, so upload your documentation before you bid, not after you win. If you're unsure how your state treats auction purchases, ask a tax professional. Don't guess from forum posts.
Here is a made-up but realistic example. Assume a 12% buyer's premium, a $10 lot fee and 7% sales tax applied to the bid plus premium and fees. These numbers are for illustration. Your platform and state will differ.
Winning bid: $500.00
Buyer's premium (12%): $60.00
Lot fee: $10.00
Subtotal: $570.00
Sales tax (7% of $570): $39.90
Total due: $609.90
That is roughly 22% above your bid. If the platform also adds a 3% card surcharge, that's another $18.30 and your total becomes about $628.20, closer to 26% over the hammer price. And we haven't touched shipping yet.
Now picture a lot you'd only resell at a thin margin. A 22% to 26% swing between bid and cost can erase your whole profit. That's why the all-in number matters more than the number on the bidding screen.
Instead of deciding what to bid and discovering the cost later, decide what you can spend in total and solve for your maximum bid. The formula is simple: take your all-in budget, divide out the tax, subtract flat fees, then divide by one plus the premium rate.
Using the same example, say your all-in ceiling is $500. Divide by 1.07 for tax and you get about $467.29. Subtract the $10 lot fee for $457.29. Divide by 1.12 for the premium and your maximum bid is about $408. Bid $408, and your total lands right near $500.
Build this into a spreadsheet with your platform's premium, lot fee and local tax rate as inputs. Then set your max bid before the auction opens, when you're calm, not in the last 30 seconds when you're not.
Joel’s Rule: Never set a max bid from the hammer price alone. Start with your all-in budget, subtract tax, flat fees and shipping, then divide by one plus the premium rate.
A low premium doesn't automatically mean a cheaper platform. One site might charge 8% but add a hefty lot fee and card surcharge. Another might charge 12% with no extras. Compare on a standardized basket: run the same $500 and $2,000 bid through each platform's fees and see where the all-in totals land. Small lots punish flat fees, and large lots punish high percentages.
Check how clearly each platform discloses fees, how much time you get to pick up, and what happens if a lot is not as described. The top-rated liquidation companies tend to publish their fee schedules plainly and handle disputes without drama, which is worth more than a point or two on the premium.
Reviews can help here, but only if you read them with a filter. Complaints about fees are sometimes about a buyer who skipped the terms, and sometimes about a platform that really did bury charges. Our guide on how to read liquidation company reviews without getting fooled shows how to tell the difference.
Run through a short checklist. Find the premium percentage for the exact auction. Look for lot, handling, loading and storage fees. Confirm how tax is applied and whether your resale certificate is on file. Check card versus bank payment costs. Get a freight quote if the lot isn't local pickup.
If any part of that is unclear, ask support in writing before bidding. A platform that answers fee questions quickly and specifically is usually one that behaves well after the sale too. For the bigger picture on how these sales work and why the fees exist, start with our primer on understanding liquidation.
Want to compare buyer's premiums and fee structures side by side?