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Buyer's Premium?
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Robert W Greif
Posted 7/20/2011 19:14 (#1871941)
Subject: Buyer's Premium?



Dallas Center IA 515-720-2463		Just a question from an old man who thinks a lot of things are going to pot.

At a 'Buyer's Premium' auction I assume 10% is a pretty comman charge. So that $10,000- bargin you got is going to cost $11,000-

But does the auction company still charge the seller a commision?

I don't know what the rate on auctions is. Never had a sale, hope never to have one - Let it rust away.
But I think 5% and down. Maybe more on low dollar stuff.

I am with Ployboy on them, Don't Bid, don't even go. Just call the auction company and the owner of the stuff being sold and tell them both that you would have liked to done their sale and bid. But not at a a buyer's premium auction.

I bet the auction companies that charge a buyer's premium have the same line as I once heard from a farm manager [in a bar]
"We will get you more money, after our commision is taken out, than you will get on your own"
[Not a word for word quote, but the meaning is there]
And I think he is right. Do you have any pro farm management land? Do you have any just talk about it and you rented the place ground?
Which costs you more?

I bet the buyers premium auction company has as it's sales pitch that they will get more people at the sale, more bidders, and more gross dollars.
Even if most people know that $10,000- bid is going to cost them $11,000-
And should adjust their bid downward to take care of it.

Edited by Bobby Greif 7/20/2011 19:42




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Jon S
Posted 7/20/2011 19:24 (#1871953 - in reply to #1871941)
Subject: RE: Buyer's Premium?



I'm of the opinion that who cares what the buyer's premium is as long as the net price is a bargain or below what I perceive to be market value. It's kind of like people getting all upset about what a dealer is allowing for a trade while not being concerned at all about the price of the item to be purchased. It's the net net net that matters.


Am I looking at this wrong?





Edited by Jon S 7/20/2011 19:25
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Red/Green
Posted 7/20/2011 19:26 (#1871956 - in reply to #1871941)
Subject: Re: Buyer's Premium?


Elizabethtown,KY		Started down here back in the 80's there was only one auctioneer who I graduated from high school with that didn't charge the buyer's premium, he passed away back in the winter, so everyone does it now.
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Mart
Posted 7/20/2011 19:28 (#1871961 - in reply to #1871941)
Subject: Re: Buyer's Premium?


Eastern Ia.		A buyers premium is an invented BS idea. Stay clear of these auctions. I will never pay a buyers premium in my life!!!!!!!!!!!!!!!!

I think there should be an auctioneers premium that the auctioneer pay the buyer.

Edited by Mart 7/20/2011 19:31
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Tim in WI
Posted 7/20/2011 19:42 (#1871988 - in reply to #1871941)
Subject: RE: Buyer's Premium?



Embarrass WI

I'm with Jon S on this. If I go to an auction with a BP, I can simply adjust my bid amount. The only number that matters is how much I have to make the check out for.

A buyer's premium is just a different way for the auctioneer to get paid.

I can very seldom get things bought at auctions. Seems that someone else almost always wants it worse than I do.

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Trent2520
Posted 7/20/2011 19:59 (#1872016 - in reply to #1871941)
Subject: RE: Buyer's Premium?



Statesville, NC		I sold a truck bed at a Ritchie Bros. auction and it sold for $1750.00. The commission was 20%, and they charged the buyer a 10% premium. It was a very high commission, but they did get more for it than I could have got anywhere else. I had asked several people $1000 for it and no one was interested.
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Jon S
Posted 7/20/2011 20:04 (#1872025 - in reply to #1872016)
Subject: RE: Buyer's Premium?



It cost the buyer $1925. You got $1400. They made $525. You got an extra $400 over what you were asking.

I don't see the problem.


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ayrporte
Posted 7/20/2011 20:32 (#1872058 - in reply to #1872025)
Subject: RE: Buyer's Premium?


Eastern Ont		I guess if the buyer had done a little research he could have bought your 1925 truck bed for a $1000
If the seller wasnt selling something then you wouldnt get paid
I agree with the previous posters won't participate in BP auctions
You cant have it both ways
imho
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Tim(nj)
Posted 7/20/2011 23:49 (#1872406 - in reply to #1872058)
Subject: RE: Buyer's Premium?


Pittstown, NJ		I had a grain drill I didn't need advertized for $700. A couple guys tried lowballing me on it, one offered $250, the other $350 . . . no other bites. I kept it and took it to a local consignment sale the next spring. Both lowballers were there bidding on it, and #1 ended up outbidding #2 for $1150 . . . . auctions somehow make people spend more than they would in other circumstances. One windbag up the road from me always said he liked the idea of having a BP auction because the seller paid the commission and he got to keep all his money. I couldn't convince him that the way it worked was the buyer AND the seller paid a percentage. Well, when it came time for his retirement sale, he went ballistic when he found out his favorite auctioneer would charge 10% buyers premium and then charge him 15%. Accused the auctioneer of being a crook, etc. Called around and found out they all run BP auctions like that. Burst his little bubble. Ended up with an auctioneer who had very little draw and stuff went for peanuts. I admit that I came home with two of his galvanized gravity wagons for $400 . . . the other auctioneer would probably have gotten $800 a piece for them.
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Trent2520
Posted 7/20/2011 21:31 (#1872143 - in reply to #1872025)
Subject: RE: Buyer's Premium?



Statesville, NC		No problem, I was happy with the 1400. It's just the highest commission I have ever seen.
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Oilland
Posted 7/20/2011 21:16 (#1872125 - in reply to #1872016)
Subject: RE: Buyer's Premium?


Lloydminster Sask.
Trent2520 - 7/20/2011 17:59

I sold a truck bed at a Ritchie Bros. auction and it sold for $1750.00. The commission was 20%, and they charged the buyer a 10% premium. It was a very high commission, but they did get more for it than I could have got anywhere else. I had asked several people $1000 for it and no one was interested.


That's the first I've heard of Ritchie Bros charging a buyers premium. They've never charged them at any sales I've ever seen.
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Trent2520
Posted 7/20/2011 21:33 (#1872150 - in reply to #1872125)
Subject: RE: Buyer's Premium?



Statesville, NC		10% on anything under 2500.
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Plow79
Posted 7/20/2011 23:38 (#1872383 - in reply to #1872125)
Subject: RE: Buyer's Premium?



Chilliwack BC		What Trent said, as well as starting today, 2.5% up to a maximum of $950 on anything over $2,500. They did eliminate the internet bidders fee.
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Oilland
Posted 7/21/2011 01:21 (#1872538 - in reply to #1872383)
Subject: RE: Buyer's Premium?


Lloydminster Sask.
plow79 - 7/20/2011 21:38

What Trent said, as well as starting today, 2.5% up to a maximum of $950 on anything over $2,500. They did eliminate the internet bidders fee.


It's nice they eliminated the internet bidders fee, I've bought a grain truck and an air seeder this year on RB auctions, both on the internet. I usually can't make it to the sales due to my job away from the farm so that will be a break if I buy a swather on one of their sales, which is next on my wish list.

Edited by Oilland 7/21/2011 01:22
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Indianajones
Posted 7/20/2011 20:05 (#1872026 - in reply to #1871941)
Subject: RE: Buyer's Premium?



My FIL is a brood/show pig producer and sells some show stock in online auctions from time to time. The auctioneer charges a 10% buyers premium that the seller gets half of. He also pays a commission but getting half the buyers premium helps the cost of that.
I wonder if the auctions we are discussing here operate the same way? Does the seller get a taste of the BP?
INDY
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lylefarm
Posted 7/20/2011 20:46 (#1872078 - in reply to #1871941)
Subject: Re: Buyer's Premium?



East of Dowagiac Michigan		I skipped the first local sale that I remember that had a buyers premium. The auction outfits that sell industrial stuff all seem to charge a premium not limited to 10%........I have learned to adjust my bids. Not all the buyers premiums are a straight rate. http://www.repocast.com/details.cfm?ID=562409#photos .......a happening auction yard. Just for fun, ask about their commission/fees on consigned items.
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cr39
Posted 7/20/2011 20:57 (#1872096 - in reply to #1871941)
Subject: RE: Buyer's Premium?


Northeast ks		Shouldn't the person selling the equipment pay the commission. I think it's another way of getting an unsuspecting person.
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jdflyer
Posted 7/20/2011 21:40 (#1872168 - in reply to #1871941)
Subject: Plowboy was being sarcastic


Centralia, MO		Based on his previous posts, I think Plowboy was being sarcastic and he hopes that people boycotting such auctions will make the price cheaper for him. I pointed out that the sale had a buyer's premium because I felt that since neither Machinery Pete or Jerrod of Purplewave had mentioned the buyer's premium in their 5 minute promotional video for the sale that it was worth bringing it to people's attention. It also brought up the question in my mind of how Pete reports the prices. Are the buyer's premiums reflected correctly in the prices you list on your reports MP?
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Machinery Pete
Posted 7/20/2011 23:44 (#1872393 - in reply to #1872168)
Subject: RE: Plowboy was being sarcastic


Very good question...we try to be as detailed as we can reporting all aspects of item sold at auction, condition, location, etc. One thing we do with these online auctions, we created special "Location" designations, so we show "WAVE" for Purplewave.com auctions and "IRON" for Bigiron.com, etc. Then we note in our "Specs" column that it was an online auction and say what state the sold item was from....."PURPLEWAVE.COM ONLINE SALE - ITEM IN TX", etc.

I'll make sure we also show "+10% Buyer's Premium" in our "Specs" field for items sold on PW.com sales as 10% is their across the board rate.

Pete
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plowboy
Posted 7/20/2011 23:46 (#1872396 - in reply to #1872393)
Subject: RE: Plowboy was being sarcastic



Brazilton KS

If you are using their contract price from auction results page, the premium is included. 

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Machinery Pete
Posted 7/21/2011 11:06 (#1872888 - in reply to #1872396)
Subject: RE: Plowboy was being sarcastic


Yep, you're right, PW does go back and reflect their 10% buyer's fee in their final contract/invoice price listed. I like that they do that

Pete
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bushton4
Posted 7/20/2011 22:01 (#1872211 - in reply to #1871941)
Subject: RE: Buyer's Premium?



So when Big Iron wanted to charge me 13% to sell a $20K item, they are a better auction company because I as the seller have to pay the whole comission? For my 13% commission I dont get to know how many total bidders there were and where they came from. Please explain the economics of how this is better for me the seller. Last time I checked the auction company works for the seller, not the buyer!!!!
I have sold a lot of items via PW and there has only been 1 time when my stuff brought marginal money. All the rest of the time it has been higher $$ than what I can get locally. I paid no where near 13% commission and got market price or above for items. Damn that buyers premium for making me more money.
The last auction I sold things at this yr, there were approximately 900 unique bidders from over 24 states. This was for 1 auction of about 160 items. These were auctual bidders, not looky lu's, not whistling gophers, not guys that come to just get a number and a hotdog. When was the last time you were at an auction with 900 numbers out, much less 900 bidders? Guess what fellas, more bidders equals more opportunity for higher sale prices. It only takes two guys to make an auction work. The more people that are bidding the better chance the two guys that want your equipment are watching. It is simple math. Kinda like 10% is simple math.
So if a buyers premium drives the prices down and the bidders away, where is that happening? Why would you have a blanket policy for equipiment buying in your business? i.e. buyers premium I won't bid. That is just plain ignorant and poor business planning. Is it a pride issue? Is it a progress issue?
Lets keep beating the grawlix out of this dead horse!!!
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Kooiker
Posted 7/20/2011 23:39 (#1872384 - in reply to #1872211)
Subject: RE: Buyer's Premium?



bushton4 - 7/20/2011 21:01Last time I checked the auction company works for the seller, not the buyer!!!!

 

Exactly what I always say.

 

So why are they asking the buyer to pay for their services????

 

If the auction company represents the seller (most sale bills state this) then the seller should be the one to pay them.

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bowtieighth
Posted 7/20/2011 23:41 (#1872388 - in reply to #1872384)
Subject: He who makes the rules.....


Bethany, MO		makes the rules. If you want to play in their ballpark, you'll play by their rules!
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Kooiker
Posted 7/21/2011 08:43 (#1872750 - in reply to #1872388)
Subject: RE: He who makes the rules.....



 I won't play.

 

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bowtieighth
Posted 7/21/2011 08:46 (#1872752 - in reply to #1872750)
Subject: RE: He who makes the rules.....


Bethany, MO
Kooiker - 7/21/2011 07:43

 I won't play.

 



That's your choice. Less competition for me!
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coup
Posted 7/20/2011 23:47 (#1872400 - in reply to #1872384)
Subject: RE: Buyer's Premium?


USA		I bought a house that will close on Friday at auction. Was a flat $5000 BP. Got a copy of the closing statement today, seller paid nothing.

I would rather pay the fee rather than the seller in this case. Wrote a seperate check for $5000 to auction company, should be able to expense the $5000, rather than depreciate it over 30 something years.
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German Shepherd
Posted 7/20/2011 23:01 (#1872315 - in reply to #1871941)
Subject: RE: Buyer's Premium?


I want nothing to do with a Buyers Premium and you won't see me bidding on anything that runs that scam either.  ((Are you listening Purple Wave?))

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bharzman
Posted 7/20/2011 23:08 (#1872326 - in reply to #1872315)
Subject: Re: Buyer's Premium?


North Central Kansas		Bushton,
I am happy you got more $$ for your items.

My point is, why should there be a sellers and buyers premium? If you the seller have to pay 5%, and me the buyer 10% on an item that brings $50,000.
Thats one heck of a pay day $7500.

my opi
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plowboy
Posted 7/20/2011 23:21 (#1872344 - in reply to #1872326)
Subject: Re: Buyer's Premium?



Brazilton KS

Brent, go back and read what Bryan posted again.   Evidently it didn't sink in the first time. 

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Mark (EC,IN)
Posted 7/20/2011 23:06 (#1872323 - in reply to #1871941)
Subject: RE: Buyer's Premium?



Schlegel Farms, Hagerstown Indiana		Stand in the crowd with a calculator and keep yelling "I'm Figuring what it will cost with the BP"....disrupt the show as much as possible.

There have been several auctions I was going to attend, till I saw there was a BP and I don't go.

............................................Mark
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coup
Posted 7/20/2011 23:19 (#1872341 - in reply to #1872323)
Subject: RE: Buyer's Premium?


USA		Am not going to let a a buyer premium stand in the way of buying something. I can figure good enough in my head to know the true cost.

It's the final cost that matters, what method is used to get to that point is irrelevent as long as a person knows the rules up front.
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plowboy
Posted 7/20/2011 23:23 (#1872346 - in reply to #1872341)
Subject: RE: Buyer's Premium?



Brazilton KS

All these people keep claiming it's gonna drive bidders away.....I just wish it would.    I keep hoping....Come on, all you guys, boycott starts tomorrow!

I think the guys complaining are the ones who aren't players to begin with, so why would anyone care what they think. 

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bowtieighth
Posted 7/20/2011 23:33 (#1872373 - in reply to #1872346)
Subject: RE: Buyer's Premium?


Bethany, MO		What's wrong with me plowboy. I'm not a player and I'm shaking my head! Good luck tomorrow. Hope it's lonely! 'Course we all know the only reason you'll be there is to make sure everyone abides by the boycott!
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derby
Posted 7/21/2011 08:20 (#1872719 - in reply to #1872346)
Subject: RE: Buyer's Premium?


Once again the jerk has spoken!

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bowtieighth
Posted 7/21/2011 08:34 (#1872740 - in reply to #1872719)
Subject: RE: Buyer's Premium?


Bethany, MO
derby - 7/21/2011 07:20

Once again the jerk has spoken!


What an insightful comment. Really added a lot to the thread.
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German Shepherd
Posted 7/21/2011 08:33 (#1872738 - in reply to #1872346)
Subject: RE: Buyer's Premium?


I buy a fair amount of stuff on line, so I'd say your dead wrong.   I have only seen one local auctioneer that tried the BP thing here once, and he hasn't tried it since.

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Ben D, N CA
Posted 7/20/2011 23:26 (#1872353 - in reply to #1871941)
Subject: Can someone please explain



Whiskey, Tango, Foxtrot		How a buyers premium is "screwing" anyone, dishonest, or all this other horrible stuff?

Every single one states on the first page, or on the sale bill, etc that there is a buyers premium. It is just the terms of the sale. Nothing hidden or dishonest about it.
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Big Ben
Posted 7/21/2011 00:02 (#1872431 - in reply to #1872353)
Subject: RE: Can someone please explain


Columbia Basin, Ephrata, WA		Yes, finally someone else who has it figured out. I have yet to see a hidden BP; they always make it clear up front what it will be. Just bid accordingly.

All you BP naysayers go ahead and stay home in protest. Less people for me to outbid.

Edit: As I monitor the Dean Ag auction on Purplewave, I do feel the need to add that there should be a cap on buyers premiums like what Richie Brothers has. I can't imagine why anyone would want to have their big ticket items sold with a flat 10% added by the auctioneer. I hope Dean is getting some of that BP money, or else PW is having a very big day today.





Edited by Ben in the Basin 7/21/2011 11:56
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stevepfrm
Posted 7/21/2011 00:06 (#1872439 - in reply to #1871941)
Subject: Re: Buyer's Premium?


Norton,KS		I bought one thing on Purple wave. I thought that it grossly misrepresented by the pictures. If the buyer has to pay 10% ,then the company should do something to help the buyer(better service)
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johnh
Posted 7/21/2011 00:38 (#1872497 - in reply to #1872439)
Subject: Re: Buyer's Premium?


southern mn		local internet auction charges buyer 25 or 30% plus 10% buyers premium but oh,they could take off like 5% if the items brought over $5000 guess im in the wrong buisness. still some deals to be had with the buyer premium.
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ss@WC Iowa
Posted 7/21/2011 00:52 (#1872516 - in reply to #1871941)
Subject: Re: Buyer's Premium?



Coon Rapids,Iowa		As an auctioneer, I refuse to charge a BP. I think that charging the seller commission is a good enough day's wages. If an auctioneer can't make enough money from the seller, then he better go look for a better paying job. If the buyer is good enough to come & attend your auction & support you, why should you charge him when he is already making you money.
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dvswia
Posted 7/21/2011 06:09 (#1872613 - in reply to #1872516)
Subject: Re: Buyer's Premium?


sw corner ia.		thank you for adding some integrity into this equation.
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coup
Posted 7/21/2011 06:48 (#1872629 - in reply to #1872613)
Subject: Re: Buyer's Premium?


USA		What does charging or not charging a BP have anything to do with integrity?

Have seen more than one auctioneer that does not charge a BP, do some pretty shady things.

Don't know what all the fuss is over if a BP is charged or not. It all boils down to the amount a person has to write the check for at the end of the day.



Edited by coup 7/21/2011 06:50
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Jon S
Posted 7/21/2011 06:56 (#1872638 - in reply to #1872629)
Subject: Re: Buyer's Premium?



I think you are wasting your time trying to explain what "net" means, Coup. lol.





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coup
Posted 7/21/2011 07:05 (#1872645 - in reply to #1872638)
Subject: Re: Buyer's Premium?


USA		Jon,

Persnally, charging a BP rubs me the wrong way.

But not going to let my emotions over rule and not buy something that has value, just because of having to pay a BP.

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trakman
Posted 7/21/2011 06:38 (#1872623 - in reply to #1871941)
Subject: Re: Buyer's Premium?


Central Kansas		I've been watching an item on a PW auction for the last month (ends today) and the bidder number that shows up consistently apparently has a maximum bid placed,...........................ok, how do I know that the seller doesn't have a "neutral" person biding on there behalf to protect it?
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bowtieighth
Posted 7/21/2011 06:56 (#1872639 - in reply to #1872623)
Subject: Re: Buyer's Premium?


Bethany, MO		Why does it matter who is bidding against you? Did you ever consider it might be someone who thinks the thing you're bidding on has value and he has a use for it? Maybe he's thinking the same thing about you. From what I've seen at auctions, the last several bids usually come from a very few people, sometimes just 2! I've even seen it where one or more of those people might bid earlier, when the item is cheaper. Just something I've noticed.
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Tim in WI
Posted 7/21/2011 08:26 (#1872728 - in reply to #1872623)
Subject: Re: Buyer's Premium?



Embarrass WI

The PW guy has posted on here that they do not allow reserves. What you are describing would be termed "shill bidding" which is also not allowed by them. Not to say it couldn't happen, I would expect they would still have to pay and transfer ownership.

Bottom line, don't bid any more than you are willing to pay(including the premium). Seems simple enough to me.

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runningbehind
Posted 7/21/2011 08:39 (#1872744 - in reply to #1872728)
Subject: Re: Buyer's Premium?


NC ND		Higher premium percentages would tend to weed out the Shill bidding as you call it, in my opinion. Wouldn't think that anyone would want to pay the auctioneer alot of money and risk getting stuck with the equipment to bid it up.
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benk8680
Posted 7/21/2011 08:38 (#1872743 - in reply to #1871941)
Subject: Re: Buyer's Premium?


ECIL		AS a buyer i really dont care about the bp as long as the net price is a good deal. As a seller , i think pw's bp is a little ridiculous--15k to sell a 150k combine--it still comes out of my pocket if the guy was willing to pay 165k for the machine. Auctiontime is much more realistic with a cap of $950? I think Pw is limiting themselves to small iron sales with this bp-- ill never use it for the big stuff!
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ccjersey
Posted 7/21/2011 08:45 (#1872751 - in reply to #1871941)
Subject: Re: Buyer's Premium?


Faunsdale, AL		I think the reason for a buyers premium is strictly psychological. Even though you know it's included, you still have less inhibition to bid because the price being called is 10% lower.

After all, it all comes out of the same pile of money whether it gets paid by the seller or the purchaser.
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GCAT
Posted 7/21/2011 12:36 (#1872994 - in reply to #1871941)
Subject: RE: Buyer's Premium?


Eastern Kansas		The problem I have isn't the buyers premium. The buyer can adjust what he is willing to give for the item to adjust for the buyers premium. The problem that I have is what I think is an unbelievably overpriced sellers premium. I have tried to sell something on Purplewave one time. I called about it, they asked what the item was and how much I thought it would bring. It was a truck that I thought would bring about $6000. They wanted 25% commission. UNREAL! If they could guarantee me a certain price that is one thing, but what if the truck only brought $4000, which is what my bottom dollar had to be to pay off the truck, then I would have only pocketed $3000, which is half of what the truck is worth. I was in college at the time and there was no way I could take that risk.
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plowboy
Posted 7/21/2011 12:42 (#1873000 - in reply to #1872994)
Subject: RE: Buyer's Premium?



Brazilton KS

   If you were not happy with the deal they offered, you did the right thing by not using them.  With that said, that certainly is not consistant with the sales I have made there.  Was this a long time ago?

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bowtieighth
Posted 7/21/2011 13:03 (#1873018 - in reply to #1872994)
Subject: RE: Buyer's Premium?


Bethany, MO		It's really no more you're right to complain about what their service was worth, than it would be for them to decide what your truck was worth. At a good sale, if a piece brings a certain amount of money, that's sometimes more of an indicator of what it's really WORTH. If it's worth more than fair market value to you than to the general public, then you have to consider that.
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rhinoman
Posted 7/21/2011 16:03 (#1873150 - in reply to #1873018)
Subject: Buyer's Premium - Full Disclosure!


I am a auctioneer and our company does use a buyer's premium occasionaly. Here are the main factors we feel are very important when considering what to do when buying or selling equipment that is being sold with a buyers premium:

Selling:
Many Buyer's do not understand that Auctioneers may be forced to charge a BP. If the court assigns this, our hands are tied. To answer a post some had asked if the sellers pay a commission as well - many still do. It may be reduced, or it may not be. If the Seller is not forced to sell, the auction company may charge both sides, and not fully disclose this. Unfortunately it happens in many states. Auctioneers are one of the few proffessional jobs that don't always have to be liscensed to sell. NE, IA, KS for example do NOT require liscensed auctioneers. This simply means - no governing body to watch them. Buyer / Seller Beware!

Sellers - DO YOUR HOME WORK BEFORE SELLING! It is your piece of personal property. Go with a specialized auctioneer. If you are selling a tractor and the auctioneer just finished a auction for a office supply facility - are they focusing on marketing machinery 100%? Ask for a reference. The days of $5,000.00 tractor, trucks, and track loaders are done. This equipment is costly and you want it marketed to buyers that have confidence in the company. look at reputation, quality of brochures, etc.. Internet bidding is huge, but is that the only marketing they are doing? Check all factors. If the commission is higher - have them prove to you why. If the sell for a flat fee - you sometimes get a flat fee auctioneer with flat fee advertising.



Buying:
Buyers need to do their homework. A reputable auction company will disclose the BP, if not find out asap. Also, look for extra wording when buying (ie..title feel, warehouse fee, clerical fee, etc..) I have seen these everywhere and some run as high as 5% with out using the BP terminology. Our company does charge a .25% transcation fee when selling ag equipment. We disclose this and provide any potential buyers the explanation as to where this money goes and what it covers. We find out buyers appreciate this fact.
Your main option is that if you are being charged a BP, reduce the price you will pay by that amount. Plain and simple.
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