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What is a buyer's premium?

A buyer's premium is a percentage fee added to your winning bid at auction, set by the seller. On GovDeals it's 12.5% on most lots, and a few sellers charge less. You pay it on top of the hammer price, so it's a real part of what the item actually costs you, not an optional extra.

How it works

When you win a lot, the platform adds the buyer's premium to your bid, then usually calculates sales tax on the bid plus the premium. The premium is the auctioneer's/platform's commission, and because each selling agency sets its own rate, it varies from listing to listing. GavelGap assumes 12.5% unless the listing says otherwise, but always read the specific terms.

Example: a $1,000 winning bid with a 12.5% buyer's premium becomes $1,125 before tax. Add, say, 7% sales tax on that $1,125 (about $79) and you're at about $1,204 before you've paid a cent of shipping. The "$1,000 lot" really costs meaningfully more.

Why it matters for resellers

The buyer's premium is part of your landed cost, the total to get the item resale-ready. Ignoring it is one of the most common ways new buyers overpay: they bid against resale value forgetting that 12.5% is coming off the top before tax and shipping. Fold it into your maximum bid, not your regret.

Related terms

Landed cost · Hammer price · Full glossary

Not sure what a premium does to your margin? The free GovDeals profit calculator adds the buyer's premium, tax, and shipping and shows your real landed cost and profit.

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