In an era when check deposits clear in one business day, why does payment for a successful wine auction sale take 30-60 days or longer? Stories of much longer payment periods (6 months or even a year) are not uncommon. Read this thread titled “Auction question – float” on the Mark Squires Bulletin Board on eRobertParker.com for some examples.
3 Factors explaining delayed payments
- Risk of buyer rescinding purchase – As possession of your money provides some protection from the auction house being stuck with the cost of resolving buyer claims (e.g., regarding authenticity, quality, or title), delaying the seller’s payment provides time for potential buyer claims to be raised.
- Buyer’s money may not have been collected – Virtually all sale contracts require collection of monies from the buyer before payment to the seller.
- Reimbursable expenses may need to be calculated – Charges for shipping and other reimbursable expenses may need to be gathered as these are typically deducted from any sale payments.
Bottom line:
- Read the sales contract! All of these payment details are spelled out in the sale contract you're required to sign. Contracts I’ve seen from major auction houses state 35 days in one instance and 50 days in another.
- Consider superior substitutes to auctions such as Vinfolio’s personal selling service where payment is guaranteed in 0-7 days after the sale. Note that immediate payment occurs for larger cellars that are bought outright. Inspection is performed at the customer’s location and funds are wired and received before wine is removed.
