Why so long for auction houses to settle with a consignor? Not whining, actually want to know.
BryceM
Posts: 11,827 ✭✭✭✭✭
So I recently sold a few things with GC, and this isn't meant to pick on them in any way. They say they take somewhere around a month to settle the invoice and send payment. Often it's quicker than that. I've sold some coins with HA, and if I remember correctly it's 45 business days, or about two months before they send payment. I have no experience with Legend or Stacks. The auction houses aren't sneaky about it and their policies are clearly spelled out in their terms.
Yes, they'll give you a cash advance if you ask for it. I haven't explored the terms of that. I assume there's some finance charge built in, but that's a guess on my part. I've always felt that if I was that desperate I shouldn't be playing around in an expensive hobby anyhow.
I understand them wanting funds to clear before they forward payment to the consignor, but it seems to me that if they were genuinely worried about it, they'd also hold on to the coins until payment was certain. Usually, the coins go out to their new owners in few days.
Yes they can make money holding a pile of other people's money for a couple months, but I'm curious if there's something I'm not thinking about.
Comments
Are they allowing time for winning bidders to get their lots and make sure everything is okay and nothing is coming back?
@ianrussell Since you specifically mentioned GC, maybe the owner who is a member here can shed some light on the time it takes to make payments to the consignors.
Worry is the interest you pay on a debt you may not owe.
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Most businesses have 45 day payment terms. A lot of it is about payments clearing, returns being processed, etc. It is rather unusual for an OEM to have terms less than 30 days. There's nothing at all unusual about this for businesses in general.
I don’t know what the statistics are. But my guess is that there are numerous bidders who don’t pay right away (or quickly) and that coins don’t necessarily usually go out in a few days. Also, it’s one thing not to worry about getting paid by established bidders. But it’s another to wait for payment you’re confident will be forthcoming.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
They are making sure that a buyer's payment is real AND accurate.
It takes me 7-10 days to receive a coin after immediate payment.
They hold payment for what little interest that they can get.
30 days is a minimum. It is talking about the volume of the dollars when talking about the amount of auction sales. Figure what it is on $100,000 or a $1,000,00 in sales. IT DOES ADD UP.
Wayne
Kennedys are my quest...
I think returns might have something g to do with it. They allow one return and then there is a penalty I think. So maybe the return window needs to close? I just finished a fairly large consignment with them and have another one coming up next week I think.
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Ive sold several things thru GC, and Checks have always come in a timely manner, some even faster than I expected.
I have not sold anything in years thru any of the others, so I cant comment on them.
I do know there are slow payers, as I get a few of them on ebay sales.
There really is not much float these days, even over 45 days. Cash is cheap.
I don't know where you came up with the 45 business days regarding Heritage. I have sold numerous consignments through them over the years and the check is always mailed 45 CALENDAR days after the auction.
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There are several reasons for the 30 day delay in paying consignors: first and foremost, the winning bidder generally has a 14 day period to pay up. Then it can take a week for shipping. THEN, the winning bidder has a couple days to decide if they are keeping the lot. Then, it can take up to another week to receive the lot back.
Some dealers get special treatment from the auction houses, especially for sales associated with in-person coin shows. These dealers are allowed to take possession of their lots before payment has cleared. Obviously, such winning bidders are hoping to resell their lots during the show (either to retail customers or other dealers) before their payment is finally due. This payment “cushion “ adds a bit to the time it takes for consignors to be paid.
We pay all consignors within 30 days from auction. Most are paid within 14 days. An auction 6 months ago, a little over 90% were paid within 14 days, over 95% by 21 days, and the remainder within 30 days. The percentages will vary by auction.
While many customers pay very quickly, we also extend payment terms to many bidders using our Extended Payment Plan. Although when we do this, it will never cause us to pay later than 30 days. We simply carry the balance on our books (with our own capital) after paying the consignor.
We're also pretty flexible with consignors. If a consignor needs payment by a certain date, just let us know and we'll do everything we can to make it happen.
Owner/Founder GreatCollections
GreatCollections Coin Auctions - Certified Coin Auctions Every Week - Rare Coins & Coin Values
What pct of CPG do you realize after the juice? How does it compare to eBay?
What would you get shopping it around the bourse at a show?
Odd question coming from someone who wants a 50% margin on coins. You're going to net 70 to 85% in most cases. On eBay, you'd net closer to 90%, but not everything will sell for maximum dollars on eBay.
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GC has been good for me. Payment has been sent in that 14-21 day time frame both times I consigned.
Related question, how can GC ship a coin to me the day after an auction but stacks consistently takes 3 weeks to ship?
It has been several years since I last sold thru GC but the payments to me were very quick, processed right around the 14 day timeframe if memory serves. No doubt there may be different considerations for larger dollar amounts where the ridk may be higher for the auction house.
This year I won a few lots on GC as a bidder, the first two took longer to ship and I assumed it was taking time for the funds to clear. The last one lot I won shipped much faster, same payment method so I just assumed that GC was more comfortable with the dollar value or that the previous payments that had gone smooth. Perhaps if the winning bidder is not well known or the payment takes more time to clear then the consigner pmt is slightly longer. Have never used any other auction house so I cannot comment on their payment timeframes, only the very long waits for coins to ship to me as a bidder.
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Good comments so far. @2ndCharter , admittedly, I didn't bother to look it up again before starting this thread. I just checked and you're correct about 45 days, of course.
Interesting regarding bidders delaying payment. Honestly, that never occurred to me. I generally don't bid unless I have cash on-hand, but obviously not every collector does business that way and I'm sure many dealers don't either. I haven't ever tried to return a coin to an auction house. I can't imagine making a habit of that is regarded as an endearing attribute. Quite often the coin brings less the second time it goes through the mill.
Many years ago I established a credit limit with most of the auction houses and they generally ship lots to me immediately. It was so long ago I just take it for granted these days.
@slowhand , I agree regarding shipping times at SB. I'm generally a pretty patient person.... OK, well, that's a lie.
I've had a couple minor snafus with them regarding shipping and I often forget to follow their auctions. Too bad, because they actually do have quite a number of outstanding coins.
Finally, thanks @ianrussell for the comments. GC runs a pretty nice ship and the fee structure suits me perfectly. I'm sensing a general trend that GC is being trusted with more significant coins and collections all the time.