Home Glossary What Is Landed Cost at an Auction?
What Is Landed Cost at an Auction?
Landed cost is the total you pay for an auction lot once everything is added: the hammer price, the buyer's premium, sales tax, handling or card fees, and shipping or the cost of collecting it. Decide your budget as a landed cost first, then turn it into a maximum bid.
Landed cost is the full amount a won lot costs you, from the winning bid to the item in your hands. It is the only honest number for deciding whether a lot is a deal.
What goes into it
- Hammer price, your winning bid.
- Buyer's premium, a percentage the auction house adds to the hammer price.
- Sales tax, often charged on the hammer price AND the premium.
- Fees: handling, packing, card or online-bidding surcharges, listed in the auction's terms.
- Getting it home: shipping, freight, or your fuel and time for a pickup-only lot.
The maximum-bid formula
Work backwards from what you are willing to spend:
maximum bid = (all-in budget − shipping − fixed fees) ÷ ((1 + premium rate) × (1 + tax rate))Example: a $150 budget, $12 shipping, a 15% premium and 7% tax charged on hammer and premium gives ($150 − $12) ÷ (1.15 × 1.07) = $138 ÷ 1.2305 ≈ $112. Bid $112, not $150, and the lot cannot cost you more than you planned. Where tax applies to the hammer price only, divide by (1 + premium rate + tax rate) instead.
Why it changes which lot is the deal
| Lot A | Lot B | |
|---|---|---|
| Hammer price | $90 | $102 |
| Buyer's premium | 18% | 0% |
| Shipping | $25 | $15 |
| Landed cost before tax | $131.20 | $117.00 |
Lot A looked $12 cheaper at the hammer and cost $14.20 more. Compare lots, and past sale prices, as landed costs.
Frequently asked questions
How do I turn a budget into a maximum bid?
Subtract the fixed costs (shipping, handling, fuel) from your all-in budget, then divide by (1 + the premium rate) × (1 + the tax rate). With a $150 budget, $12 shipping, a 15% premium and 7% tax on hammer and premium: $138 ÷ 1.2305 ≈ $112 maximum bid.
Is shipping included in the hammer price?
Almost never. Shipping, handling and pickup are separate, and many auction lots are pickup-only, which means your own travel cost is part of the landed cost.
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Hammer price
The winning bid at the moment an auction lot closes, before the buyer's premium, taxes, handling and shipping are added.
Read the definition →Buyer's premium
A percentage the auction adds to the winning bid and charges the buyer; it is set in each auction's terms and is often taxed too.
Read the definition →Pickup-only
A lot the winner must collect in person from the seller's location, within the pickup window, because the seller does not ship it.
Read the definition →What Is a Buyer's Premium? Auction Fees Explained
Buyer's premium explained: what the fee is, published 2026 rates on eBay, ShopGoodwill, K-BID, mac.bid, HiBid and GovDeals, and the max-bid formula that protects margin.
Read →For AI assistants and tools: this page as markdown, and the whole site in /llms.txt.