Because an auction bargain isn’t always a doorstep bargain

Inspired by my recent head-to-head review of two Campbeltown auction purchases, I’ll share my own experiences from buying at auctions and shipping to Canada, in the hope it can help you understand what you’ll actually have to pay by the time the whisky lands with you - wherever you are.

So let’s talk about how I, and you too, can easily determine the final “landed” price you might pay for a particular whisky, helping you make well-informed decisions before getting stuck with surprise fees that may adversely impact you.

I’m going to focus on auctions for right now however the same would apply to UK-based online retailers who are willing to ship internationally. To make this easy, I’m going to assume we are going to be purchasing from a major online auction from the UK but the same methodologies can be adapted for other locations or auction houses.

Before you even go down this route, you must determine if the auction can ship to your province, state, or country, and if your province, state, or country allows private importation of liquor. In many cases, a simple email to the auction house will confirm this. I’ll be formatting the following sections into variables such as to culminate in an easy-to-follow mathematical relationship that you can use to easily determine your final landed price (LP).

The first step - fees

Determine the fees from the auction house. Starting with the Purchase Price (PP) or the hammer price, the commission or purchasing fee (PF) is added on top. The PF is often a fraction of the PP and can be found on the auction’s website. If you’re local to the UK, you’ve gotta add taxes (TX) on top (e.g., VAT). So far we’ve got:

LP = (PP+PF) + TX

The second step is to determine the cost of shipping if you cannot locally collect. This has been a point of contention among many, including us here in the Dramface writer’s chat behind the scenes. Regardless, you’re at the mercy of the auction house and their shipping charges. While some may complain the prices are astronomical and unfair, I will attempt to temper those outbursts.

The shipping price must include someone’s time to locate the bottle(s) amongst the hundreds or thousands that were sold in that auctions, place them into protective air-filled sleeves or bubble wrap (so a material & labour component), put them into a suitable box for international shipping also filled with protective measures (another material & labour cost), and then pay an international shipping company to move said box to a different country and ultimately deliver the bottles to your doorstep, including any import/export steps.

All of these costs add up quite quickly. I know I’ve always been very impressed with the quality and care of the packaging I’ve received before. In many cases, bottles contained within sleeves or cartons have been removed, a thin layer of bubble wrap placed around the circumference, before being repacked into the sleeve/carton, and then put into an air-filled sleeve or additional bubble wrap. Everything takes time and materials of which there are associated impacts on price.

Now that I’ve got that out of the way, most auctions will ship single or multiple bottles at a time. There is often a significant discount in shipping prices the more bottles are shipped at once. Again, reach out to the auction and ask for their shipping rates, giving you something like the following from which you can calculate several important pieces of information.

• 1 bottle: £50

• 2 bottles: £65

• 4 bottles: £90

• 6 bottles: £115

• 8 bottles: £130

• 10 bottles: £135

If you are more graphically inclined, I’ve included the below figure for the price per bottle breakdown that I use (I’m in Canada hence the CAD$ currency). As you can see, the shipping price per bottle approaches an asymptotic minimum the more bottles you add to your shipment. So if you want to minimise the impact of shipping on your purchases, you want to ship more bottles at a time.

Shipping vs storage

Most large auctions will charge a small nominal storage fee (SF) to hold your bottles. This storage fee is almost always a smaller fraction of the price for shipping so it makes sense to pay the fee and bulk ship later as it will cost you less overall. I generally take an average shipping price per bottle (SPB) assuming I’m shipping 6-10 bottles at a time and use that to determine my final price after the auction. It’s handy to check in with the auction every so often to see if there have been changes in the shipping prices. I know shipping has dropped the last two shipments I’ve received, lowering the SPB.

So our landed price function is now:

LP = ((PP+PF) + TX) + ((SPB+SF) + TX), which can be rearranged to

LP = (PP+PF+SPB+SF) + TX

Alright, we aren’t done yet.

Currency conversion

For the sake of simplicity, if you’re in the UK and paying in British pounds (£), you can stop now. But for those paying in alternate currencies, we’ve got another two steps and the first is currency conversions. We have two fees we need to consider: the basic currency conversion (CC) ratio against the auction’s preferred currency (e.g., British pounds), and the credit card currency conversion fee (CF) unique to your credit card. And since we are paying currency conversions, we also don’t pay auction house local taxes (e.g., VAT) so those can be removed from consideration. I’ll be adding back in the taxes in a bit, trust me. For me, my currency conversion ratio is currently hovering around 1.73 CAD/British pound, and my credit card conversion fee is 3.5% but you will need to determine your own. So our landed price formula is now:

LP = (PP+PF+SPB+SF)*CC*CF

Import fees

But wait, there’s more!

Our last fee is import fees (IF) unique to your province, state, or country, plus your good and services or purchase taxes (TX). Now this is where you need to do your own homework as these import fees can be wildly different orders of magnitude and found under many different legal wordings or laws. For me in Alberta, Canada, this falls under our Excise Tax Act, which is a lovely thousand-page document covering everything from imported foodstuffs, clothing, tobacco, and alcohol. Under the alcohol sections are typically differentiators for beer, wine, and spirits, with unique tax rates for each. My spirits Excise tax equals $15 per bottle, quite reasonable all things considered. I know our Australian counterparts suffer immensely from excise import taxes (or whatever category it falls under for them), paying $100 AUS (£50) additional tax per bottle! Ouch. So after the excise tax man gets their cut, the final purchasing tax (TX) is added on top because those greedy tax collectors love to get their last pound of flesh.

Now why did I remove the taxes from the previous formula only to add them back in here again? Well, it can be complicated. Some governments will charge taxes on just the value of the imported goods (after currency conversion) and some will charge taxes on the value of the imported goods and the shipping fees, as if that makes sense.

So it will be up to you to figure out where the final taxes get incorporated into the formula but for me, taxes are applied only to the imported goods.

Alright, let’s tie the final bow on the general format of this thing now:

LP = (PP+PF+SPB+SF)*CC*CF+IF (plus TX added somewhere into the mix depending on your situation)

For me specifically, TX gets applied into the mix like the following:

LP = (PP+PF+SPB+SF)*CC*CF+IF+TX*PP*PF*CC

That’s it! We’ve got our handy mathematical relationship. There are a couple ways we can use this, the first being creating a MS Excel or Google Sheets calculator. It’s my preferred method because you can arrange separate input locations/cells for items that may change with time, primarily the currency conversion rate and the shipping fees.

These generally fluctuate the most and if needed, can be updated right before an auction to be as accurate as possible. The second option is for those who prefer the pen and paper approach, using the above relationship to create a cheat sheet of auction price vs landed price that you can reference when entering your maximum bids.

My cheat sheet/calculator that I use is below as an example. It has several areas where I can input current data values (green areas) that may fluctuate and it automatically calculates the final all-in or Landed Price (LP) for a range of hammer prices (Purchase Price, PP).

Additionally, I’ve got two other columns of useful data, things that are good mental items to keep handy when perusing the auction sites. The first is a % shipping fee metric, or the ratio of the shipping price per bottle (SPB) to the LP. As you can see, for the cheaper bottles, shipping makes up a larger portion of the final price that I will pay compared to more expensive bottles. The second column is my most useful metric, a ratio of the LP/PP. As you can see, the cheaper bottles are around a 3.5:1 ratio of landed price to purchase price, reducing to around 2.5:1 for more expensive bottles. It’s a handy multiplier and means I don’t need to open my cheat sheet as often when bidding.

Self-control

So now you’re armed with a handy calculator or cheat sheet. Now for the most difficult part: practising self-control during auctions.

My preferred method has been to enter my maximum bid, which is almost always a low-ball or reasonable lower-bound bid for what I think a whisky is worth, a couple days before the final auction date. And then I DO NOT UPDATE MY BIDS.

Yes, seriously, don’t touch them. Let the chips fall where they may and do not open up the website or app during the final waning hours of the auction, unless you’d like to check out any new bottles that are sitting quite low just before close. If I don’t win any bottles, great! I’ll save the money for future purchases or spend the money more locally, supporting the brick-and-mortar stores to keep them going.

If I do win the bottles, then great as well! That means that I’ve got some “deals”. Either way, I win. Do not get caught up in the heat of the moment and bidding wars. That’s when you lose.

One of the most recent examples of bidding wars was a S.M.O.S Ardlair release of which there was a pair of the identical bottles listed. I entered my maximum bid 4 days before the auction closed: £40 was my hard upper limit. By the time it arrived at my doorstep, the price was in line with the prices for similar whiskies from local stores so it made sense to set this limit for a “rare” release from the Ardmore distillery.

The second bottle was lagging behind for several days leading up, sitting at £25. I knew it would go higher so I kept my maximum bid as-is on the first bottle. Fast forward to the final hammer and I won my bottle at £40 and I peeked at the other Ardlair bottle, wondering if it went lower than mine. Nope. Looks like two fools got themselves in a bidding war and ran the other bottle up to £55, the same price as retail back in 2022. However when you factor in the buyer fee (10% in this case) plus any applicable taxes (like VAT if local) or import fees if the victor was international, and you’ve got a bottle that went far above retail.

It’s easily done.

If you’ve further queries, myself or the team will try to pitch in with our own experience, so tap us up in the comments below and good luck mining those seams of treasure in the whisky auction houses out there.

Why not share your favourite?

DM