@wondercoin said:
And at the risk of repeating myself…
‘’If the auction house is bidding, how do you know they are doing everything they can to sell and market the coin and encourage competing bids?’’
ProofCollection- First, how do you know this if they are not bidding?
Life is full of conflicts of interest. The key is full disclosure of the conflict, and good faith and fair dealing with the consignor by the auction company. Nothing less.
It would be easy to implement the highest integrity standard. Policies that remove the conflict of interest.
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
.
.
It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
.
.
So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
https://youtube.com/watch?v=2YNufnS_kf4 - Mama I'm coming home ...................................................................................................................................................................... RLJ 1958 - 2023
And, one other thing. If and when an auction company places myriad bids on its auction lots, it is essentially supporting the auction. I have my opinion on which auction house(s) support their consignors best. I share my opinions with the collectors I work with. I place their coins in auctions where I believe they have the best chance to maximize their returns. Auction house bidding (directly or indirectly) is a critical part of my decision making process of where it is best to consign certain coins. Since perhaps over 3/4 of all my annual auction business is with my customer’s coins (as opposed to my personal coins) my strategies (including seeking the highest “merriest” bids) inure to the benefit of my customers who are, in the main, great collectors like many here reading these comments. I joined in this “side topic” because I thought it was important for collectors to know and understand it can be a good thing when auction houses participate in the auctions. There will come a time when most collectors become an auction consignor of their prized possessions.
Wondercoin
Please visit my website at www.wondercoins.com and my ebay auctions under my user name www.wondercoin.com.
This has been a weird thread but here are a few facts. One, if the coin goes over a thousand dollars there are no fees for the auction house (except the 3 dollar listing). So Ian and company lost over 100 dollars in fees on 2 of my coins on purpose? Second, I pre estimated my 9 coins at current CDN bid. all 9 coins sold for between 7 and 56 percent above bid. Does that sound like a profitable business approach? I might expect a base bid by them just to have a complete sell through, but after that bidding does not seem to be a good plan for the auction house. They also have an archive on the website so anyone can see the previous price. How many people are looking to pay more than the last guy? Sorry but I think GC makes its profits by just being the middle man between collectors. The rest sounds like tin foil hat time to me. James
@lilolme said:
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
.
.
It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
.
.
So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Right, but this doesn't cover the scenario where the auction house "bags" the auction by taking bad pictures, not writing the best description, not selecting the coin for a flyer or advertisement, or maybe advertising a particular auction less so that it realizes a much lower price to begin with. The auction house can pick up these "bargains" and achieve more than the 20% fee would have and the seller gets screwed.
@yspsales said:
Why again should I care an auction house was bidding on an item that I consigned?
Totally lost on me why I would not want the deepest pockets in the room finding value in my item.
At the risk of repeating myself, If the auction house is bidding, how do you know they are doing everything they can to sell and market the coin and encourage competing bids (working against themselves) and taking the best pictures?
If they posted crappy pics and didn't market the coin just to buy themselves at a cheaper price you and everyone else would take your business to Heritage, S&B, and elsewhere. Regarding an unfair advantage since they don't pay the BP, what do you expect. They take the money from 1 pocket to put in their other pocket . Plus all the expenses they have running an auction house, having servers farms & the technology to run the business, all the support functions, etc, they are paying over and above the hammer if they are the buyer.
I seriously doubt they & the other major houses ever shill bid to increase their commission. The only advantage they have over bidders is they have the coin in hand. If they feel it is worth x and for whatever reason the high bid is lower, and I would guess 10+ % lower, they may, may bid to buy. But also think this is rare as the are not in the business of sinking much capital in inventory and hoping they can turn it over higher. JMHO.
I heard that it was your dog, Belle who ate that sticker!
mikebyers.com Dealer in Major Mint Errors, Die Trials & Patterns - Author of NLG Best World Coin Book World's Greatest Mint Errors - Publisher & Editor of minterrornews.com.
@yspsales said:
Why again should I care an auction house was bidding on an item that I consigned?
Totally lost on me why I would not want the deepest pockets in the room finding value in my item.
At the risk of repeating myself, If the auction house is bidding, how do you know they are doing everything they can to sell and market the coin and encourage competing bids (working against themselves) and taking the best pictures?
If they posted crappy pics and didn't market the coin just to buy themselves at a cheaper price you and everyone else would take your business to Heritage, S&B, and elsewhere. Regarding an unfair advantage since they don't pay the BP, what do you expect. They take the money from 1 pocket to put in their other pocket . Plus all the expenses they have running an auction house, having servers farms & the technology to run the business, all the support functions, etc, they are paying over and above the hammer if they are the buyer.
Right, but it doesn't have to be every auction. They can flub one here and there and no one would probably figure it out. The top auction sites don't always have what I feel are the best pictures.
I seriously doubt they & the other major houses ever shill bid to increase their commission. The only advantage they have over bidders is they have the coin in hand. If they feel it is worth x and for whatever reason the high bid is lower, and I would guess 10+ % lower, they may, may bid to buy. But also think this is rare as the are not in the business of sinking much capital in inventory and hoping they can turn it over higher. JMHO.
Probably not. But they can if they want to. Why not just implement a policy and tout strong ethics?
Having the coin in hand is not the only advantage. They know your proxy bid and know how far they can push the top bidder to juice the take. I'm not saying that anyone does this, but per their policy they can.
@lilolme said:
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
.
.
It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
.
.
So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Right, but this doesn't cover the scenario where the auction house "bags" the auction by taking bad pictures, not writing the best description, not selecting the coin for a flyer or advertisement, or maybe advertising a particular auction less so that it realizes a much lower price to begin with. The auction house can pick up these "bargains" and achieve more than the 20% fee would have and the seller gets screwed.
.
.
As I stated in my post:
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Also I stated in the prior post:
Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not.
https://youtube.com/watch?v=2YNufnS_kf4 - Mama I'm coming home ...................................................................................................................................................................... RLJ 1958 - 2023
@lilolme said:
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
.
.
It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
.
.
So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Right, but this doesn't cover the scenario where the auction house "bags" the auction by taking bad pictures, not writing the best description, not selecting the coin for a flyer or advertisement, or maybe advertising a particular auction less so that it realizes a much lower price to begin with. The auction house can pick up these "bargains" and achieve more than the 20% fee would have and the seller gets screwed.
This is mental. Do you know how many folks are involved from consignment to sale of a coin at an auction house?
If a coin comes to me on consignment, raw, I send it to our main office, where it is submitted for grading by another person, then it goes to the photography team (a dozen or so folks) that image it, then to a numismatist (another dozen folks) that writes a description if necessary, then is auctioned by an auctioneer (half a dozen of these). If it's bid on by the house, that's a
whole different and far more select group of folks than the grunts that actually produce the auctions from start to finish.
So that's 1, 2, 3, 4, 5, 6 different people in different jobs with almost no overlap and minimal communication between one another that would have to work together to pull this off. A major firm isn't 20 folks in a room, it's 200 folks in a dozen different geographical locations.
Simply put, there is no fixing of lots in the way you describe. One bad sale on an expensive coin can cost an auction house vast, vast sums of money going forward in reputational loss. It is in the best interests of the house to have as much stuff as possible sell as strongly as possible because that creates a positive feedback loop with consignors continuing to send great coins that sell for strong money since the reality is the house can get strong money for those coins regardless of if they bid on it or not. Most consignors are consistent, repeat clients that send coins every month. Most are not the one and done type.
Any auction house that engages in the activity you describe is destined to fail because consignors will stop sending them coins pretty fast.
EDIT: If you ever sell a coin that the house buys and makes a profit on, talk to your consignment director and ask them why they missed it. It's their job to advise you on the appropriate course of action with your coins, be that sending them to CAC, submitting for recon, or straight cracking out and regrading. I had a client send me a raw 1950 Franklin recently that came back P65, I told him it was BS, we cracked it and it came back N67+ the second time around. $3000 difference. Can't say it enough, talk to your consignment directors about your coins. It's in our best interest to maximize your return because it makes us look good too when we make the company more money too. Yes, it's more work for us, but its our job!
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
mikebyers.com Dealer in Major Mint Errors, Die Trials & Patterns - Author of NLG Best World Coin Book World's Greatest Mint Errors - Publisher & Editor of minterrornews.com.
@messydesk said:
I would think the qualifications for a sticker remaining on a slab are that the sticker has a proven track record of adding value of some sort to the buyer, and not just the entity affixing the sticker before selling the coin. As far as approval stickers goes, this narrows it down to CAC, QA, and Eagle Eye. Thankfully, my attribution sticker is also now recognized.
How can a sticker gain a proven track record if it is removed by the auction houses?
Further, I believe CAC would argue that the sticker doesn't add value as the coins worthy of CAC stickers were already worth more and they are just identifying them.
@pointfivezero said:
I purchased this unstickered Blay Lincoln from GC and submitted it to CAC and CMQ. I guess I should choose another selling platform if and when it comes time to sell:
That's not very logical. Some auction houses are better for some coins than others, some auction events have different pools of buyers, etc. Further, that's not really how these stickers work as they only represent an opinion which can be important to anyone who values that opinion and in the end can only really add value.
Yup. You went to SB for a sticker. Might as well go to them to sell. Among other reasons, if they want to support the market, they will bid strong for it.
Why would Stacks Bowers bid on coins? Are they a dealer too? AFAIK they are just looking to make the commissions, not acquire inventory. I could be wrong about that though.
@PTVETTER said:
I think the placement of the sticker may have something to do with it
Covers part of the Date!
I think it's just the angle the photo was taken at.
@PerryHall said:
I don't get it. Can someone explain to me how a CMQ sticker hurts the value of a coin consigned to GC? If the buyer doesn't like it, he can always peel it off. Right?
If I saw an OGH with a CMQ sticker, I might wonder to myself if the CMQ sticker means that the coin did not make it at CAC. That is how the CMQ sticker could potentially hurt the value of the coin. CAC >> CMQ
Maybe, it's always dangerous to assume. CMQ stickers many coins that CAC does not. There are other factors at play as well such as ease and cost of submission. It was tough to get a CAC membership for quite a while. CMQ takes great pictures for all coins submitted (CAC does not). CMQ offers Coins In Motion. CMQ is on the West coast, CAC on the East. Etc.
I can understand the decision for GC to not support CMQ with a search filter or putting it in the coin description or title, but many stickers give me a little extra confidence when buying coins I can't see in person which would possibly lead to more buyers competing and higher prices. But bottom line: I would not want to submit my coins to an auction house that is going to work against my coins realizing the highest possible value.
Yes, SB is a very well known, very long time coin dealer, as well as auction house. HA also is a dealer that carries inventory. One of the things that creates value for the stickers, both for CAC and for CMQ, is the house's willingness to stand behind the opinion with a bid.
OK, but dealers generally pay wholesale so I wouldn't put too much expectation into "strong bids" from a dealer regardless of stickers and I would expect SB to not participate in their own auctions as a matter of integrity.
You do know that often more than 50% of the purchases in an auction ARE DEALERS, don't you?
@wondercoin said:
Heritage has the right to bid on my consignment coins to them.
Stacks had the right to bid on my consignment coins to them (not consigning at the moment)
GC has the right to bid on my consignment coins to them, whether it’s written in their terms and conditions (which I hope it is) or not.
The concept that one wishes the auction company doesn’t win their material because the auction company has an advantage over others (or for anny other reason) is entirely misguided. I don’t care if the auction companies outbid every other participant in the world and win every single consigned coin of mine that I consign.
Now, tell me why I am wrong to think this way?
It's unfair to buyers because the platform pay's no buyer premium which sucks to compete against, and in the case of a reserve auction where the reserve is not published, they know the reserve and have information that other buyers do not.
For sellers, this creates a perverse incentive to fail to market or promote the item or otherwise limit or inhibit bidding (for example, crappy pictures) so that the auction house can acquire the piece for less.
Technically, they DO pay a buyers premium although it is between 2 different arms if the same corporation.
While that may bother you as a buyer, the consignor certainly doesn't care.
@lilolme said:
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
.
.
It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
.
.
So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Right, but this doesn't cover the scenario where the auction house "bags" the auction by taking bad pictures, not writing the best description, not selecting the coin for a flyer or advertisement, or maybe advertising a particular auction less so that it realizes a much lower price to begin with. The auction house can pick up these "bargains" and achieve more than the 20% fee would have and the seller gets screwed.
This is mental. Do you know how many folks are involved from consignment to sale of a coin at an auction house?
If a coin comes to me on consignment, raw, I send it to our main office, where it is submitted for grading by another person, then it goes to the photography team (a dozen or so folks) that image it, then to a numismatist (another dozen folks) that writes a description if necessary, then is auctioned by an auctioneer (half a dozen of these). If it's bid on by the house, that's a
whole different and far more select group of folks than the grunts that actually produce the auctions from start to finish.
So that's 1, 2, 3, 4, 5, 6 different people in different jobs with almost no overlap and minimal communication between one another that would have to work together to pull this off. A major firm isn't 20 folks in a room, it's 200 folks in a dozen different geographical locations.
Simply put, there is no fixing of lots in the way you describe. One bad sale on an expensive coin can cost an auction house vast, vast sums of money going forward in reputational loss. It is in the best interests of the house to have as much stuff as possible sell as strongly as possible because that creates a positive feedback loop with consignors continuing to send great coins that sell for strong money since the reality is the house can get strong money for those coins regardless of if they bid on it or not. Most consignors are consistent, repeat clients that send coins every month. Most are not the one and done type.
Any auction house that engages in the activity you describe is destined to fail because consignors will stop sending them coins pretty fast.
EDIT: If you ever sell a coin that the house buys and makes a profit on, talk to your consignment director and ask them why they missed it. It's their job to advise you on the appropriate course of action with your coins, be that sending them to CAC, submitting for recon, or straight cracking out and regrading. I had a client send me a raw 1950 Franklin recently that came back P65, I told him it was BS, we cracked it and it came back N67+ the second time around. $3000 difference. Can't say it enough, talk to your consignment directors about your coins. It's in our best interest to maximize your return because it makes us look good too when we make the company more money too. Yes, it's more work for us, but its our job!
First, not all auction houses are mega operations like you describe. But that's just more parties who can get their buddies in the other departments to help them acquire items for their collections cheaper. I may need to repeat that I'm not saying this is happening anywhere, just that it could happen and probably has happened.
@wondercoin said:
Heritage has the right to bid on my consignment coins to them.
Stacks had the right to bid on my consignment coins to them (not consigning at the moment)
GC has the right to bid on my consignment coins to them, whether it’s written in their terms and conditions (which I hope it is) or not.
The concept that one wishes the auction company doesn’t win their material because the auction company has an advantage over others (or for anny other reason) is entirely misguided. I don’t care if the auction companies outbid every other participant in the world and win every single consigned coin of mine that I consign.
Now, tell me why I am wrong to think this way?
It's unfair to buyers because the platform pay's no buyer premium which sucks to compete against, and in the case of a reserve auction where the reserve is not published, they know the reserve and have information that other buyers do not.
For sellers, this creates a perverse incentive to fail to market or promote the item or otherwise limit or inhibit bidding (for example, crappy pictures) so that the auction house can acquire the piece for less.
Technically, they DO pay a buyers premium although it is between 2 different arms if the same corporation.
While that may bother you as a buyer, the consignor certainly doesn't care.
I did understand this but didn't think it worthy to wallow in the details of taking money from one pocket and putting it into the other.
@messydesk said:
I would think the qualifications for a sticker remaining on a slab are that the sticker has a proven track record of adding value of some sort to the buyer, and not just the entity affixing the sticker before selling the coin. As far as approval stickers goes, this narrows it down to CAC, QA, and Eagle Eye. Thankfully, my attribution sticker is also now recognized.
How can a sticker gain a proven track record if it is removed by the auction houses?
Further, I believe CAC would argue that the sticker doesn't add value as the coins worthy of CAC stickers were already worth more and they are just identifying them.
@pointfivezero said:
I purchased this unstickered Blay Lincoln from GC and submitted it to CAC and CMQ. I guess I should choose another selling platform if and when it comes time to sell:
That's not very logical. Some auction houses are better for some coins than others, some auction events have different pools of buyers, etc. Further, that's not really how these stickers work as they only represent an opinion which can be important to anyone who values that opinion and in the end can only really add value.
Yup. You went to SB for a sticker. Might as well go to them to sell. Among other reasons, if they want to support the market, they will bid strong for it.
Why would Stacks Bowers bid on coins? Are they a dealer too? AFAIK they are just looking to make the commissions, not acquire inventory. I could be wrong about that though.
@PTVETTER said:
I think the placement of the sticker may have something to do with it
Covers part of the Date!
I think it's just the angle the photo was taken at.
@PerryHall said:
I don't get it. Can someone explain to me how a CMQ sticker hurts the value of a coin consigned to GC? If the buyer doesn't like it, he can always peel it off. Right?
If I saw an OGH with a CMQ sticker, I might wonder to myself if the CMQ sticker means that the coin did not make it at CAC. That is how the CMQ sticker could potentially hurt the value of the coin. CAC >> CMQ
Maybe, it's always dangerous to assume. CMQ stickers many coins that CAC does not. There are other factors at play as well such as ease and cost of submission. It was tough to get a CAC membership for quite a while. CMQ takes great pictures for all coins submitted (CAC does not). CMQ offers Coins In Motion. CMQ is on the West coast, CAC on the East. Etc.
I can understand the decision for GC to not support CMQ with a search filter or putting it in the coin description or title, but many stickers give me a little extra confidence when buying coins I can't see in person which would possibly lead to more buyers competing and higher prices. But bottom line: I would not want to submit my coins to an auction house that is going to work against my coins realizing the highest possible value.
Yes, SB is a very well known, very long time coin dealer, as well as auction house. HA also is a dealer that carries inventory. One of the things that creates value for the stickers, both for CAC and for CMQ, is the house's willingness to stand behind the opinion with a bid.
OK, but dealers generally pay wholesale so I wouldn't put too much expectation into "strong bids" from a dealer regardless of stickers and I would expect SB to not participate in their own auctions as a matter of integrity.
You do know that often more than 50% of the purchases in an auction ARE DEALERS, don't you?
I haven't seen that statistic but are the 'strong bids' coming from the dealers or the collectors trying to outbid the dealers? Any data on that?
@lilolme said:
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
.
.
It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
.
.
So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Right, but this doesn't cover the scenario where the auction house "bags" the auction by taking bad pictures, not writing the best description, not selecting the coin for a flyer or advertisement, or maybe advertising a particular auction less so that it realizes a much lower price to begin with. The auction house can pick up these "bargains" and achieve more than the 20% fee would have and the seller gets screwed.
This is mental. Do you know how many folks are involved from consignment to sale of a coin at an auction house?
If a coin comes to me on consignment, raw, I send it to our main office, where it is submitted for grading by another person, then it goes to the photography team (a dozen or so folks) that image it, then to a numismatist (another dozen folks) that writes a description if necessary, then is auctioned by an auctioneer (half a dozen of these). If it's bid on by the house, that's a
whole different and far more select group of folks than the grunts that actually produce the auctions from start to finish.
So that's 1, 2, 3, 4, 5, 6 different people in different jobs with almost no overlap and minimal communication between one another that would have to work together to pull this off. A major firm isn't 20 folks in a room, it's 200 folks in a dozen different geographical locations.
Simply put, there is no fixing of lots in the way you describe. One bad sale on an expensive coin can cost an auction house vast, vast sums of money going forward in reputational loss. It is in the best interests of the house to have as much stuff as possible sell as strongly as possible because that creates a positive feedback loop with consignors continuing to send great coins that sell for strong money since the reality is the house can get strong money for those coins regardless of if they bid on it or not. Most consignors are consistent, repeat clients that send coins every month. Most are not the one and done type.
Any auction house that engages in the activity you describe is destined to fail because consignors will stop sending them coins pretty fast.
EDIT: If you ever sell a coin that the house buys and makes a profit on, talk to your consignment director and ask them why they missed it. It's their job to advise you on the appropriate course of action with your coins, be that sending them to CAC, submitting for recon, or straight cracking out and regrading. I had a client send me a raw 1950 Franklin recently that came back P65, I told him it was BS, we cracked it and it came back N67+ the second time around. $3000 difference. Can't say it enough, talk to your consignment directors about your coins. It's in our best interest to maximize your return because it makes us look good too when we make the company more money too. Yes, it's more work for us, but its our job!
First, not all auction houses are mega operations like you describe. But that's just more parties who can get their buddies in the other departments to help them acquire items for their collections cheaper. I may need to repeat that I'm not saying this is happening anywhere, just that it could happen and probably has happened.
I can't speak for Joe Schmoe's auctions down the road, but I can tell you no auction house with a solid reputation sandbags their auctions. Full stop. Too much work, too much risk. Makes no sense. Slinging wild hypotheses around with no backing in actual reality is a dangerous game.
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
@NJCoin said:
Nothing wrong with it, insofar as it legitimately pushes prices to where the house (and seller) believe it should be. Whereas money does not change hands when a seller buys their own coins (hence the word "shill"), when the house buys the item, a legitimate arm's length transaction between unrelated parties actually takes place. Who frowns on it, other than bidders looking for a below market deal?
Really? Nothing wrong with it? If you're buying there's a BIG problem. The auction site is pushing you to bid more after they failed to generate honest competing bidders so they can increase the fees that they make!
Yup. Maybe it's worth keeping in mind that they represent sellers, not buyers. The only "deals" you get are the ones they are willing to allow you to get.
To the extent they also run a coin business, you are competing with them for every lot, and that works to the sellers' advantage. Why would the affiliated coin dealer be any less legitimate or honest than every other dealer that bids in the auction?
When they bid, I'm sure it's not to increase their commission, although that is a happy side effect. The idea is to take the "deal" you would otherwise get for itself. And why shouldn't they?
Why does eBay have this policy? Shill bidding is unfair to buyers and it's illegal in many places in the world. We have this policy to discourage shill bidding and to make it clear what can happen when people don't follow these guidelines.
The auction houses probably all allow shill bidding by policy because Arizona and probably other states allow buyers to cancel purchases if it is not disclosed:
47-2328. Sale by auction
...
D. If the auctioneer knowingly receives a bid on the seller's behalf or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at his option avoid the sale or take the goods at the price of the last good faith bid prior to the completion of the sale. This subsection shall not apply to any bid at a forced sale.
Generally agree with your comment except for this small correction. GC does operate as a coin dealer and I wouldn’t be surprised if their policy on internal auction participation mirrors Stacks or HA.
Are you referring to GC's current listing of 282 Buy Now Coins which includes 23 Morgan Dollars and 50 America the Beautiful coins?
The site says those were consigned. Consigned means GC doesn't own them.
Those coins are apparently mostly simply too low value to waste time trying to auction them. $8, $10, $20, $30 etc. As for the others, the seller probably just wants what they want, so rather than repeatedly list them at a reserve that won't be met, they are listed at a Buy Now price, waiting to see if anyone bites.
They are not all low dollar coins, but many are "low interest" (difficult to sell for a decent price at auction) coins. I have no problem with GC or any company selling their own inventory The problem is when they bid on what is being sold. We can agree to disagree.
Sure, agree to disagree. But shill bidding is bidding on your own stuff. Not bidding in your own auction.
Sorry if you don't think it is "fair," but it is fully disclosed, and that makes it "fair." Regardless of how you want to define a "fair marketplace," as in real estate, the house's job is to get the best price for the seller.
Not the other way around, although that does not work to your advantage as a buyer. And that includes stepping in to bid themselves when it is in their interest to do so, rather than letting you have a deal on something other bidders might be sleeping on, or have no interest in.
Where this could go sideways is if an auction house a) had the ability to bid and b) had knowledge of max bid levels of participants that placed those bids ahead of the live auction. At that point they could in theory act as a shill bidder and create competition that might not otherwise exist to run up legitimate bids without having to ever take on any risk of purchasing the item.
Maybe, but that ignores live bidding. I seriously doubt these reputable auction houses manipulate bids just to earn a slightly higher commission.
But, sure, theoretically, anything is possible. So stay away from auctions. Again, their job is to maximize proceeds for the seller, not to generate deals for bidders.
@wondercoin said:
And at the risk of repeating myself…
‘’If the auction house is bidding, how do you know they are doing everything they can to sell and market the coin and encourage competing bids?’’
ProofCollection- First, how do you know this if they are not bidding?
Life is full of conflicts of interest. The key is full disclosure of the conflict, and good faith and fair dealing with the consignor by the auction company. Nothing less.
It would be easy to implement the highest integrity standard. Policies that remove the conflict of interest.
At the cost of possibly causing the seller to receive less. As a bidder, you are only concerned about the auction house competing with you.
The house bidding is not only disclosed, but does not create a conflict with the seller. It creates a potential conflict with you, the bidder, to whom they owe no duty. Whose interest, other than bidders, is served by removing a deep pocketed bidder from an auction?
No one's. Which is why it has been a thing forever. And no one here apparently was even aware of it until someone expressed potential "shock" if it was happening and I spent two seconds posting T&Cs from SB showing that it is, has been, and will continue to be a standard practice.
Regardless of the fact that bidders here today first woke up to the fact that they are competing with the house for every lot at every auction. Other than, apparently, at GC. Pretty ironic, considering that the thread started out vilifying GC over removing a CMQ sticker, huh? 😀
@lilolme said:
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
.
.
It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
.
.
So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Right, but this doesn't cover the scenario where the auction house "bags" the auction by taking bad pictures, not writing the best description, not selecting the coin for a flyer or advertisement, or maybe advertising a particular auction less so that it realizes a much lower price to begin with. The auction house can pick up these "bargains" and achieve more than the 20% fee would have and the seller gets screwed.
This is mental. Do you know how many folks are involved from consignment to sale of a coin at an auction house?
If a coin comes to me on consignment, raw, I send it to our main office, where it is submitted for grading by another person, then it goes to the photography team (a dozen or so folks) that image it, then to a numismatist (another dozen folks) that writes a description if necessary, then is auctioned by an auctioneer (half a dozen of these). If it's bid on by the house, that's a
whole different and far more select group of folks than the grunts that actually produce the auctions from start to finish.
So that's 1, 2, 3, 4, 5, 6 different people in different jobs with almost no overlap and minimal communication between one another that would have to work together to pull this off. A major firm isn't 20 folks in a room, it's 200 folks in a dozen different geographical locations.
Simply put, there is no fixing of lots in the way you describe. One bad sale on an expensive coin can cost an auction house vast, vast sums of money going forward in reputational loss. It is in the best interests of the house to have as much stuff as possible sell as strongly as possible because that creates a positive feedback loop with consignors continuing to send great coins that sell for strong money since the reality is the house can get strong money for those coins regardless of if they bid on it or not. Most consignors are consistent, repeat clients that send coins every month. Most are not the one and done type.
Any auction house that engages in the activity you describe is destined to fail because consignors will stop sending them coins pretty fast.
EDIT: If you ever sell a coin that the house buys and makes a profit on, talk to your consignment director and ask them why they missed it. It's their job to advise you on the appropriate course of action with your coins, be that sending them to CAC, submitting for recon, or straight cracking out and regrading. I had a client send me a raw 1950 Franklin recently that came back P65, I told him it was BS, we cracked it and it came back N67+ the second time around. $3000 difference. Can't say it enough, talk to your consignment directors about your coins. It's in our best interest to maximize your return because it makes us look good too when we make the company more money too. Yes, it's more work for us, but its our job!
First, not all auction houses are mega operations like you describe. But that's just more parties who can get their buddies in the other departments to help them acquire items for their collections cheaper. I may need to repeat that I'm not saying this is happening anywhere, just that it could happen and probably has happened.
I can't speak for Joe Schmoe's auctions down the road, but I can tell you no auction house with a solid reputation sandbags their auctions. Full stop. Too much work, too much risk. Makes no sense. Slinging wild hypotheses around with no backing in actual reality is a dangerous game.
Just a few weeks ago a Heritage auction coin had some bad pictures. I asked MFeld about the coin and he had new pictures taken. I'm sure this was just a fluke and will happen from time to time, but maybe there was someone at the firm who wanted a deal? If they had a policy against insider bidding I could feel confident that this is the case. Instead, I will always wonder...
@wondercoin said:
And at the risk of repeating myself…
‘’If the auction house is bidding, how do you know they are doing everything they can to sell and market the coin and encourage competing bids?’’
ProofCollection- First, how do you know this if they are not bidding?
Life is full of conflicts of interest. The key is full disclosure of the conflict, and good faith and fair dealing with the consignor by the auction company. Nothing less.
It would be easy to implement the highest integrity standard. Policies that remove the conflict of interest.
At the cost of possibly causing the seller to receive less. As a bidder, you are only concerned about the auction house competing with you.
The house bidding is not only disclosed, but does not create a conflict with the seller. It creates a potential conflict with you, the bidder, to whom they owe no duty. Whose interest, other than bidders, is served by removing a deep pocketed bidder from an auction?
They have a duty to all parties and should be neutral overall. The buyer is just as much of a customer as the seller is.
@wondercoin said:
If and when an auction company places myriad bids on its auction lots, it is essentially supporting the auction. I have my opinion on which auction house(s) support their consignors best. I share my opinions with the collectors I work with.
I think the paranoia of auction houses tanking auctions is misplaced. Auction houses want to support auctions, so they can advertise high price realizations and high percentage of lots sold. For major consignments, the auction house may even have a price floor deal with the consignor, wherein they only keep the buyer premium above a certain price point. If I were a consignor, I would definitely ask for price guarantees and auction support.
Where this issue become sticky is when buyers start to notice. A buyer might notice that they only win the mistakes, or trap coins. A buyer might also notice that their losing underbids keep coming back out for auction again six months later. Sometimes these are auction house buys, and sometimes these are private dealers engaging in the same bottom fishing tactics. Keep in mind some auction houses may want to muscle out private dealers who make mint cherry picking, too.
The honest way to put a price floor on coins is with an high opening bid or a high reserve. Auction houses don't like doing this for three reasons: they like the buzz around an auction that has a large number of early lowball bidders, they like the price discovery if their initial reserve price proves higher than market, and they like being able to market themselves as having few unsold lots.
@lilolme said:
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
.
.
It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
.
.
So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Right, but this doesn't cover the scenario where the auction house "bags" the auction by taking bad pictures, not writing the best description, not selecting the coin for a flyer or advertisement, or maybe advertising a particular auction less so that it realizes a much lower price to begin with. The auction house can pick up these "bargains" and achieve more than the 20% fee would have and the seller gets screwed.
This is mental. Do you know how many folks are involved from consignment to sale of a coin at an auction house?
If a coin comes to me on consignment, raw, I send it to our main office, where it is submitted for grading by another person, then it goes to the photography team (a dozen or so folks) that image it, then to a numismatist (another dozen folks) that writes a description if necessary, then is auctioned by an auctioneer (half a dozen of these). If it's bid on by the house, that's a
whole different and far more select group of folks than the grunts that actually produce the auctions from start to finish.
So that's 1, 2, 3, 4, 5, 6 different people in different jobs with almost no overlap and minimal communication between one another that would have to work together to pull this off. A major firm isn't 20 folks in a room, it's 200 folks in a dozen different geographical locations.
Simply put, there is no fixing of lots in the way you describe. One bad sale on an expensive coin can cost an auction house vast, vast sums of money going forward in reputational loss. It is in the best interests of the house to have as much stuff as possible sell as strongly as possible because that creates a positive feedback loop with consignors continuing to send great coins that sell for strong money since the reality is the house can get strong money for those coins regardless of if they bid on it or not. Most consignors are consistent, repeat clients that send coins every month. Most are not the one and done type.
Any auction house that engages in the activity you describe is destined to fail because consignors will stop sending them coins pretty fast.
EDIT: If you ever sell a coin that the house buys and makes a profit on, talk to your consignment director and ask them why they missed it. It's their job to advise you on the appropriate course of action with your coins, be that sending them to CAC, submitting for recon, or straight cracking out and regrading. I had a client send me a raw 1950 Franklin recently that came back P65, I told him it was BS, we cracked it and it came back N67+ the second time around. $3000 difference. Can't say it enough, talk to your consignment directors about your coins. It's in our best interest to maximize your return because it makes us look good too when we make the company more money too. Yes, it's more work for us, but its our job!
First, not all auction houses are mega operations like you describe. But that's just more parties who can get their buddies in the other departments to help them acquire items for their collections cheaper. I may need to repeat that I'm not saying this is happening anywhere, just that it could happen and probably has happened.
I can't speak for Joe Schmoe's auctions down the road, but I can tell you no auction house with a solid reputation sandbags their auctions. Full stop. Too much work, too much risk. Makes no sense. Slinging wild hypotheses around with no backing in actual reality is a dangerous game.
Just a few weeks ago a Heritage auction coin had some bad pictures. I asked MFeld about the coin and he had new pictures taken. I'm sure this was just a fluke and will happen from time to time, but maybe there was someone at the firm who wanted a deal? If they had a policy against insider bidding I could feel confident that this is the case. Instead, I will always wonder...
@wondercoin said:
And at the risk of repeating myself…
‘’If the auction house is bidding, how do you know they are doing everything they can to sell and market the coin and encourage competing bids?’’
ProofCollection- First, how do you know this if they are not bidding?
Life is full of conflicts of interest. The key is full disclosure of the conflict, and good faith and fair dealing with the consignor by the auction company. Nothing less.
It would be easy to implement the highest integrity standard. Policies that remove the conflict of interest.
At the cost of possibly causing the seller to receive less. As a bidder, you are only concerned about the auction house competing with you.
The house bidding is not only disclosed, but does not create a conflict with the seller. It creates a potential conflict with you, the bidder, to whom they owe no duty. Whose interest, other than bidders, is served by removing a deep pocketed bidder from an auction?
They have a duty to all parties and should be neutral overall. The buyer is just as much of a customer as the seller is.
Actually, no. They are agents for sellers. They have no duty to you as a bidder, other than to try to get you to bid as high as possible.
You just don't understand. They have a duty to their consignors, because they are their agent. You, as a bidder, are on the other side of the transaction.
In general, other than things like not committing fraud, sellers, and their agents, have no duties whatsoever to buyers. That's where the phrase caveat emptor comes from.
@wondercoin said:
Heritage has the right to bid on my consignment coins to them.
Stacks had the right to bid on my consignment coins to them (not consigning at the moment)
GC has the right to bid on my consignment coins to them, whether it’s written in their terms and conditions (which I hope it is) or not.
The concept that one wishes the auction company doesn’t win their material because the auction company has an advantage over others (or for anny other reason) is entirely misguided. I don’t care if the auction companies outbid every other participant in the world and win every single consigned coin of mine that I consign.
Now, tell me why I am wrong to think this way?
As always, just my 2 cents.
Wondercoin
You are 100% wrong. A auction house is an auction house it is a conflict of interest for both the buyer and seller for them to buy at their own auction. period. I suspect in some states it is illegal. ( not positive but it should be)
@wondercoin said:
And at the risk of repeating myself…
‘’If the auction house is bidding, how do you know they are doing everything they can to sell and market the coin and encourage competing bids?’’
ProofCollection- First, how do you know this if they are not bidding?
Life is full of conflicts of interest. The key is full disclosure of the conflict, and good faith and fair dealing with the consignor by the auction company. Nothing less.
It would be easy to implement the highest integrity standard. Policies that remove the conflict of interest.
At the cost of possibly causing the seller to receive less. As a bidder, you are only concerned about the auction house competing with you.
The house bidding is not only disclosed, but does not create a conflict with the seller. It creates a potential conflict with you, the bidder, to whom they owe no duty. Whose interest, other than bidders, is served by removing a deep pocketed bidder from an auction?
No one's. Which is why it has been a thing forever. And no one here apparently was even aware of it until someone expressed potential "shock" if it was happening and I spent two seconds posting T&Cs from SB showing that it is, has been, and will continue to be a standard practice.
Regardless of the fact that bidders here today first woke up to the fact that they are competing with the house for every lot at every auction. Other than, apparently, at GC. Pretty ironic, considering that the thread started out vilifying GC over removing a CMQ sticker, huh? 😀
Most everyone here knows that the houses bid. Don't extrapolate from the few people who didn't.
@wondercoin said:
If and when an auction company places myriad bids on its auction lots, it is essentially supporting the auction. I have my opinion on which auction house(s) support their consignors best. I share my opinions with the collectors I work with.
I think the paranoia of auction houses tanking auctions is misplaced. Auction houses want to support auctions, so they can advertise high price realizations and high percentage of lots sold. For major consignments, the auction house may even have a price floor deal with the consignor, wherein they only keep the buyer premium above a certain price point. If I were a consignor, I would definitely ask for price guarantees and auction support.
Where this issue become sticky is when buyers start to notice. A buyer might notice that they only win the mistakes, or trap coins. A buyer might also notice that their losing underbids keep coming back out for auction again six months later. Sometimes these are auction house buys, and sometimes these are private dealers engaging in the same bottom fishing tactics. Keep in mind some auction houses may want to muscle out private dealers who make mint cherry picking, too.
The honest way to put a price floor on coins is with an high opening bid or a high reserve. Auction houses don't like doing this for three reasons: they like the buzz around an auction that has a large number of early lowball bidders, they like the price discovery if their initial reserve price proves higher than market, and they like being able to market themselves as having few unsold lots.
This. Tank an auction and you stop getting consignments.
It is all about consignments. That's also why BPs are high. It allows the auction house to give more money to consignors.
I have bid on a few coins in the past from one auction company and lost only to see the coin listed in there inventory a week later. Many reasons this could have happened, BUT?
@BryceM said:
I read page one. That was all I could digest.
Ian responded promptly, and appropriately, IMO. Well done.
Do stickers “add value” or are they, on average, placed on coins with more value? It’s a simple question. People seem to avoid considering it.
It is both of course. Stickers are often applied to better-than-average coins that would bring premiums over more typical examples even in a world where stickers didn't exist. But stickers also give buyers the confidence to spend or bid (more than they otherwise would) based on images because they know an expert has reviewed the coin in hand and given it their seal of approval.
Going through this thread, you can certainly tell the folks that just LOVE to see their words in print.......
Love to tell the world how intelligent they think they are
some of yous need to give it a rest.....
@lilolme said:
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
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It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
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So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Right, but this doesn't cover the scenario where the auction house "bags" the auction by taking bad pictures, not writing the best description, not selecting the coin for a flyer or advertisement, or maybe advertising a particular auction less so that it realizes a much lower price to begin with. The auction house can pick up these "bargains" and achieve more than the 20% fee would have and the seller gets screwed.
This is mental. Do you know how many folks are involved from consignment to sale of a coin at an auction house?
If a coin comes to me on consignment, raw, I send it to our main office, where it is submitted for grading by another person, then it goes to the photography team (a dozen or so folks) that image it, then to a numismatist (another dozen folks) that writes a description if necessary, then is auctioned by an auctioneer (half a dozen of these). If it's bid on by the house, that's a
whole different and far more select group of folks than the grunts that actually produce the auctions from start to finish.
So that's 1, 2, 3, 4, 5, 6 different people in different jobs with almost no overlap and minimal communication between one another that would have to work together to pull this off. A major firm isn't 20 folks in a room, it's 200 folks in a dozen different geographical locations.
Simply put, there is no fixing of lots in the way you describe. One bad sale on an expensive coin can cost an auction house vast, vast sums of money going forward in reputational loss. It is in the best interests of the house to have as much stuff as possible sell as strongly as possible because that creates a positive feedback loop with consignors continuing to send great coins that sell for strong money since the reality is the house can get strong money for those coins regardless of if they bid on it or not. Most consignors are consistent, repeat clients that send coins every month. Most are not the one and done type.
Any auction house that engages in the activity you describe is destined to fail because consignors will stop sending them coins pretty fast.
EDIT: If you ever sell a coin that the house buys and makes a profit on, talk to your consignment director and ask them why they missed it. It's their job to advise you on the appropriate course of action with your coins, be that sending them to CAC, submitting for recon, or straight cracking out and regrading. I had a client send me a raw 1950 Franklin recently that came back P65, I told him it was BS, we cracked it and it came back N67+ the second time around. $3000 difference. Can't say it enough, talk to your consignment directors about your coins. It's in our best interest to maximize your return because it makes us look good too when we make the company more money too. Yes, it's more work for us, but its our job!
First, not all auction houses are mega operations like you describe. But that's just more parties who can get their buddies in the other departments to help them acquire items for their collections cheaper. I may need to repeat that I'm not saying this is happening anywhere, just that it could happen and probably has happened.
I can't speak for Joe Schmoe's auctions down the road, but I can tell you no auction house with a solid reputation sandbags their auctions. Full stop. Too much work, too much risk. Makes no sense. Slinging wild hypotheses around with no backing in actual reality is a dangerous game.
Just a few weeks ago a Heritage auction coin had some bad pictures. I asked MFeld about the coin and he had new pictures taken. I'm sure this was just a fluke and will happen from time to time, but maybe there was someone at the firm who wanted a deal? If they had a policy against insider bidding I could feel confident that this is the case. Instead, I will always wonder...
@wondercoin said:
And at the risk of repeating myself…
‘’If the auction house is bidding, how do you know they are doing everything they can to sell and market the coin and encourage competing bids?’’
ProofCollection- First, how do you know this if they are not bidding?
Life is full of conflicts of interest. The key is full disclosure of the conflict, and good faith and fair dealing with the consignor by the auction company. Nothing less.
It would be easy to implement the highest integrity standard. Policies that remove the conflict of interest.
At the cost of possibly causing the seller to receive less. As a bidder, you are only concerned about the auction house competing with you.
The house bidding is not only disclosed, but does not create a conflict with the seller. It creates a potential conflict with you, the bidder, to whom they owe no duty. Whose interest, other than bidders, is served by removing a deep pocketed bidder from an auction?
They have a duty to all parties and should be neutral overall. The buyer is just as much of a customer as the seller is.
Actually, no. They are agents for sellers. They have no duty to you as a bidder, other than to try to get you to bid as high as possible.
Then what is the buyer's premium for? Purportedly the BP is to compensate the auction firm for services provided.
You just don't understand. They have a duty to their consignors, because they are their agent. You, as a bidder, are on the other side of the transaction.
In general, other than things like not committing fraud, sellers, and their agents, have no duties whatsoever to buyers. That's where the phrase caveat emptor comes from.
If that's true, then they should not charge a BP because they are doing nothing for the buyer. They absolutely have duties to buyers after the hammer falls and a contract is established. Before the hammer falls the auction firm has a duty to the public to provide a fair buying process including truthful representation and full disclosure.
Further, Auction houses cannot become buyers of their own auctions while maintaining fiduciary duties to sellers as that is a conflict of interest. Many comments here have said that it's fine as long as it drives the price up in their favor but they fail to acknowledge that as a buyer the firm is working to pay as little as possible when they are buying. This conflict is irreconcilable even if it rarely results in a negative outcome for the seller in practice.
@alaura22 said:
I have bid on a few coins in the past from one auction company and lost only to see the coin listed in there inventory a week later. Many reasons this could have happened, BUT?
No buts. If you lost out on the coin and the house is offering the exact same coin for sale a week later, they outbid you.
That's not a crime, but now the auction is over, they have capital tied up in it, and they have to sell it. If you still want the coin, maybe call them up and make them an offer. Better yet, let it sit for a while and then make them an offer below your prior bid.
OTOH, if they sell it, at a price significantly above your bid with the juice, then they made a good call and you are not entitled to buy a coin below wholesale, as established by what they paid.
@alaura22 said:
I have bid on a few coins in the past from one auction company and lost only to see the coin listed in there inventory a week later. Many reasons this could have happened, BUT?
No buts. If you lost out on the coin and the house is offering the exact same coin for sale a week later, they outbid you.
That's not a crime, but now the auction is over, they have capital tied up in it, and they have to sell it. If you still want the coin, maybe call them up and make them an offer. Better yet, let it sit for a while and then make them an offer below your prior bid.
OTOH, if they sell it, at a price significantly above your bid with the juice, then they made a good call and you are not entitled to buy a coin below wholesale, as established by what they paid.
I understand what you're saying but I don't like it.
Without putting words in your mouth, what you're saying is that there is no way to be able to win an auction at a great price!
If the auction house is allowed to bid on a coin when they see it going for cheap they will just step in and place a bid on it. Call me naive but I didn't think that auction houses did that and I feel that conduct to be a bit shady.
Yes. I know that they have the right to do it I just didn't think that they did.
Consider me informed
@seatedlib3991 said:
This has been a weird thread but here are a few facts. One, if the coin goes over a thousand dollars there are no fees for the auction house (except the 3 dollar listing). So Ian and company lost over 100 dollars in fees on 2 of my coins on purpose? Second, I pre estimated my 9 coins at current CDN bid. all 9 coins sold for between 7 and 56 percent above bid. Does that sound like a profitable business approach? I might expect a base bid by them just to have a complete sell through, but after that bidding does not seem to be a good plan for the auction house. They also have an archive on the website so anyone can see the previous price. How many people are looking to pay more than the last guy? Sorry but I think GC makes its profits by just being the middle man between collectors. The rest sounds like tin foil hat time to me. James
Interesting. I never looked at it that way.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
@alaura22 said:
I have bid on a few coins in the past from one auction company and lost only to see the coin listed in there inventory a week later. Many reasons this could have happened, BUT?
No buts. If you lost out on the coin and the house is offering the exact same coin for sale a week later, they outbid you.
That's not a crime, but now the auction is over, they have capital tied up in it, and they have to sell it. If you still want the coin, maybe call them up and make them an offer. Better yet, let it sit for a while and then make them an offer below your prior bid.
OTOH, if they sell it, at a price significantly above your bid with the juice, then they made a good call and you are not entitled to buy a coin below wholesale, as established by what they paid.
I understand what you're saying but I don't like it.
Without putting words in your mouth, what you're saying is that there is no way to be able to win an auction at a great price!
If the auction house is allowed to bid on a coin when they see it going for cheap they will just step in and place a bid on it. Call me naive but I didn't think that auction houses did that and I feel that conduct to be a bit shady.
Yes. I know that they have the right to do it I just didn't think that they did.
Consider me informed
Kinda sorta. What I'm saying is that you can only win at a great price if the house allows it. This provides some level of protection for consignors who agree to no reserve auctions. It also provides a source for wholesale material for the house if no one is willing to pay retail at the auction.
As Mel Brooks said in "The History of the World, Part I," "It's good to be the King." There is no reason for an auction house that also has a retail affiliate to sit by while retail buyers scoop up items that it might want for inventory at prices below what it would be willing to pay for the item. So they don't.
It's not crazy once you understand it. While it might not sit well with you, it obviously serves the interests of both the auction house and the consignors, and that is their primary concern. Never to minimize prices realized for the benefit of bidders.
Also, ask @wondercoin if it works for him and his clients. 😀 It's their playground, their rules. You just get to play in it.
The following requirements shall apply to bidding at auctions:
(1) An auctioneer conducting an auction and an auction company where an auction is being held shall not bid on or offer to buy any goods or real property at the auction unless the auctioneer or the auction company discloses the name of the person on whose behalf the bid or offer is being made.
(2) An auctioneer and an auction company shall not use any method of bidding at an auction that will allow goods or real property to be purchased in an undisclosed manner on behalf of the auctioneer or auction company.
(3) At a public auction conducted or supervised by an auctioneer or auction company, the auctioneer or auction company shall not fictitiously raise any bid, knowingly permit any person to make a fictitious bid, or employ or use another person to act as a bidder or buyer.
(4) All goods or real property offered for sale at an auction shall be subject to a reserve or a confirmation from the owner or consignor unless otherwise indicated by the auctioneer or auction company. Except as provided in this subsection, an auctioneer or auction company shall not use any method of bidding at an auction that allows the auctioneer or auction company to avoid selling any property offered for sale at auction.
(5) A licensee who violates any provision of this section shall be subject to an administrative fine in a sum not exceeding five hundred dollars for each violation.
[ 1986 c 324 § 22.]
This is a revised code of Washington state.
I’m not a legal scholar. As most have figured out. But it looks like in WA state
Says a house can bid for someone if it’s made public. I’m not sure though if it means it can bid for itself. I’m still leaning that they cannot. It reads to me they can proxy bid for others that cannot attend or choose that they do the bidding for them
Also I think GC does a great job at a fair price. And I’m not bashing any auction company. I just don’t think it is ethical for them to buy or run up bids on their own behalf. But after reading this thread it appears it is an industry standard.
@FlyingAl said:
This thread has taken a life of its own.
There have actually been memes made about it.
In the interest of putting it all to rest I have a possible solution:
Maybe it would simplify things if the stickers were placed so the whole coin and grade are covered up? It'd sort of be like taking a chance purchasing an unknown box of coins where you don't actually get to see anything, but know they at least have third party approval.
@FlyingAl said:
This thread has taken a life of its own.
There have actually been memes made about it.
In the interest of putting it all to rest I have a possible solution:
Maybe it would simplify things if the stickers were placed so the whole coin and grade are covered up? It'd sort of be like taking a chance purchasing an unknown box of coins where you don't actually get to see anything, but know they at least have third party approval.
Or just cover the whole grade and description. Maybe then people would actually learn to grade for themselves, once again, as the old-timers did...
“I may not believe in myself but I believe in what I’m doing” ~Jimmy Page~
Scrape off all the stickers, including CAC! If it is disclosed in the auction terms and conditions, who are you to complain? Just declare "Anything improperly affixed to the holder shall be removed..."
Given the direction this thread has gone, it must be acknowledged that auction house bidding is a popular topic for a reason. I'm guessing a majority of collectors would share surprise at the idea they are bidding against the house.
Most younger collectors start out on eBay these days, and graduate to the Big Leagues once their budgets and knowledge reach a certain level.
It is completely understandable that auction houses want to support the market, especially in a very online world.
But current policy would also be considered shill bidding under eBay rules. Judging from the responses by sophisticated collectors like @alaura22@ProofCollection@Martin a LOT of collectors are surprised to learn that they've been bidding against and often losing out to the auction house for years.
This should at least cause old hands to pause and think for a few seconds. The argument that collectors have no right to buy below wholesale raises an obvious retort: Why aren't any wholesalers bidding? To quote the great lawyer Mona Lisa Vito "The Defense is Wrong!" The issue is largely a deception one: an auction advertised as no reserve, when there is in fact a secret reserve, and no bargains to be had for retail participants.
Perhaps this topic deserves its own thread. The interest is certainly there.
We all know that auction houses can bid on coins they are auctioning but we would like to think they are not competing against us when we are bidding. How often does this happen? I have no idea and unless you work for an auction house or are well connected you don’t know for sure either. This is another one of those “secret” topics that nobody who knows has any desire to discuss. All we can do is speculate.
Comments
It would be easy to implement the highest integrity standard. Policies that remove the conflict of interest.
Give it time.
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars
I certainly did Not read all of this, so if this has been pointed out then sorry. Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not. Was not sure how to do this but an example (or two) might work easiest (might).
So while it states the auction company might not or does not pay a buyers fee, that does not fully represent the situation.
Assume a seller is getting 100% of hammer and there is a 20% buyers fee. A lot is bid at $9500. and the auction company bids and buys it at $10,000. Since the seller is getting 100% of hammer, then the auction company bought it at $10,000.
However, if the auction company had not bid, then it would have received the prior bid $9500. plus a buyers fee of 20% $1900. for a total of $11,400 from the buyer. Then paying the consignor $9500 and netting (gross) $1900. (or the 20% buyers fee).
So the auction company now owning the lot at $10,000. would need to sell if for $10,000 plus the $1900 or $11,900 to net the same $1900. if the auction company had not bid. Anything above the $11,900 would be additional income.
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It is similar if the seller is getting 110% of hammer. Action company would receive the same from the buyer at $9500. hammer plus 20% $1900. for a total of $11,400. But would net only 10% of hammer since seller is getting 110% or $10,450 and therefor auction company would net $950. (10% of hammer).
However, the $10,000. hammer that the auction company bid would now cost them another 10% since the seller was getting 110% of hammer or $11,000. So the auction company would need to sell the lot for $11,000. plus the $950. or $11,950. to net the same amount if they had let the lot sell at $9500. to the other bidder.
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So while the auction company may not pay the buyers fee, they also do not receive the buyers fee from the next lowest bid and would need to make that up to be 'even' with letting the lot be sold to the prior bidder.
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
https://youtube.com/watch?v=2YNufnS_kf4 - Mama I'm coming home ...................................................................................................................................................................... RLJ 1958 - 2023
You are correct lilolme.
And, one other thing. If and when an auction company places myriad bids on its auction lots, it is essentially supporting the auction. I have my opinion on which auction house(s) support their consignors best. I share my opinions with the collectors I work with. I place their coins in auctions where I believe they have the best chance to maximize their returns. Auction house bidding (directly or indirectly) is a critical part of my decision making process of where it is best to consign certain coins. Since perhaps over 3/4 of all my annual auction business is with my customer’s coins (as opposed to my personal coins) my strategies (including seeking the highest “merriest” bids) inure to the benefit of my customers who are, in the main, great collectors like many here reading these comments. I joined in this “side topic” because I thought it was important for collectors to know and understand it can be a good thing when auction houses participate in the auctions. There will come a time when most collectors become an auction consignor of their prized possessions.
Wondercoin
This has been a weird thread but here are a few facts. One, if the coin goes over a thousand dollars there are no fees for the auction house (except the 3 dollar listing). So Ian and company lost over 100 dollars in fees on 2 of my coins on purpose? Second, I pre estimated my 9 coins at current CDN bid. all 9 coins sold for between 7 and 56 percent above bid. Does that sound like a profitable business approach? I might expect a base bid by them just to have a complete sell through, but after that bidding does not seem to be a good plan for the auction house. They also have an archive on the website so anyone can see the previous price. How many people are looking to pay more than the last guy? Sorry but I think GC makes its profits by just being the middle man between collectors. The rest sounds like tin foil hat time to me. James
Right, but this doesn't cover the scenario where the auction house "bags" the auction by taking bad pictures, not writing the best description, not selecting the coin for a flyer or advertisement, or maybe advertising a particular auction less so that it realizes a much lower price to begin with. The auction house can pick up these "bargains" and achieve more than the 20% fee would have and the seller gets screwed.
If they posted crappy pics and didn't market the coin just to buy themselves at a cheaper price you and everyone else would take your business to Heritage, S&B, and elsewhere. Regarding an unfair advantage since they don't pay the BP, what do you expect. They take the money from 1 pocket to put in their other pocket
. Plus all the expenses they have running an auction house, having servers farms & the technology to run the business, all the support functions, etc, they are paying over and above the hammer if they are the buyer.
I seriously doubt they & the other major houses ever shill bid to increase their commission. The only advantage they have over bidders is they have the coin in hand. If they feel it is worth x and for whatever reason the high bid is lower, and I would guess 10+ % lower, they may, may bid to buy. But also think this is rare as the are not in the business of sinking much capital in inventory and hoping they can turn it over higher. JMHO.
I read page one. That was all I could digest.
Ian responded promptly, and appropriately, IMO. Well done.
Do stickers “add value” or are they, on average, placed on coins with more value? It’s a simple question. People seem to avoid considering it.
Ian-
I heard that it was your dog, Belle who ate that sticker!
Right, but it doesn't have to be every auction. They can flub one here and there and no one would probably figure it out. The top auction sites don't always have what I feel are the best pictures.
Probably not. But they can if they want to. Why not just implement a policy and tout strong ethics?
Having the coin in hand is not the only advantage. They know your proxy bid and know how far they can push the top bidder to juice the take. I'm not saying that anyone does this, but per their policy they can.
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As I stated in my post:
Now one can go into all these other scenarios noted in some prior post but this was just to point out the loss of not getting the buyers fee from the prior or next lowest bidder/buyer.
Also I stated in the prior post:
Also this thread appears to be dealing with a lot of different twists and turns. I am only pointing out the buyer premium part. Also I am not making any statement as to house advantage or not.
https://youtube.com/watch?v=2YNufnS_kf4 - Mama I'm coming home ...................................................................................................................................................................... RLJ 1958 - 2023
This is mental. Do you know how many folks are involved from consignment to sale of a coin at an auction house?
If a coin comes to me on consignment, raw, I send it to our main office, where it is submitted for grading by another person, then it goes to the photography team (a dozen or so folks) that image it, then to a numismatist (another dozen folks) that writes a description if necessary, then is auctioned by an auctioneer (half a dozen of these). If it's bid on by the house, that's a
whole different and far more select group of folks than the grunts that actually produce the auctions from start to finish.
So that's 1, 2, 3, 4, 5, 6 different people in different jobs with almost no overlap and minimal communication between one another that would have to work together to pull this off. A major firm isn't 20 folks in a room, it's 200 folks in a dozen different geographical locations.
Simply put, there is no fixing of lots in the way you describe. One bad sale on an expensive coin can cost an auction house vast, vast sums of money going forward in reputational loss. It is in the best interests of the house to have as much stuff as possible sell as strongly as possible because that creates a positive feedback loop with consignors continuing to send great coins that sell for strong money since the reality is the house can get strong money for those coins regardless of if they bid on it or not. Most consignors are consistent, repeat clients that send coins every month. Most are not the one and done type.
Any auction house that engages in the activity you describe is destined to fail because consignors will stop sending them coins pretty fast.
EDIT: If you ever sell a coin that the house buys and makes a profit on, talk to your consignment director and ask them why they missed it. It's their job to advise you on the appropriate course of action with your coins, be that sending them to CAC, submitting for recon, or straight cracking out and regrading. I had a client send me a raw 1950 Franklin recently that came back P65, I told him it was BS, we cracked it and it came back N67+ the second time around. $3000 difference. Can't say it enough, talk to your consignment directors about your coins. It's in our best interest to maximize your return because it makes us look good too when we make the company more money too. Yes, it's more work for us, but its our job!
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
Maybe CMQ stickers are removed because of price?
StacksBowers $288k
https://auctions.stacksbowers.com/lots/view/3-18C2TT/1841-liberty-head-quarter-eagle-ms-60-pcgs-cmq
GC $332k
https://www.greatcollections.com/Coin/1217182/1841-Liberty-Gold-Quarter-Eagle-PCGS-MS-60
You do know that often more than 50% of the purchases in an auction ARE DEALERS, don't you?
Technically, they DO pay a buyers premium although it is between 2 different arms if the same corporation.
While that may bother you as a buyer, the consignor certainly doesn't care.
First, not all auction houses are mega operations like you describe. But that's just more parties who can get their buddies in the other departments to help them acquire items for their collections cheaper. I may need to repeat that I'm not saying this is happening anywhere, just that it could happen and probably has happened.
I did understand this but didn't think it worthy to wallow in the details of taking money from one pocket and putting it into the other.
I haven't seen that statistic but are the 'strong bids' coming from the dealers or the collectors trying to outbid the dealers? Any data on that?
I can't speak for Joe Schmoe's auctions down the road, but I can tell you no auction house with a solid reputation sandbags their auctions. Full stop. Too much work, too much risk. Makes no sense. Slinging wild hypotheses around with no backing in actual reality is a dangerous game.
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
Maybe, but that ignores live bidding. I seriously doubt these reputable auction houses manipulate bids just to earn a slightly higher commission.
But, sure, theoretically, anything is possible. So stay away from auctions. Again, their job is to maximize proceeds for the seller, not to generate deals for bidders.
At the cost of possibly causing the seller to receive less. As a bidder, you are only concerned about the auction house competing with you.
The house bidding is not only disclosed, but does not create a conflict with the seller. It creates a potential conflict with you, the bidder, to whom they owe no duty. Whose interest, other than bidders, is served by removing a deep pocketed bidder from an auction?
No one's. Which is why it has been a thing forever. And no one here apparently was even aware of it until someone expressed potential "shock" if it was happening and I spent two seconds posting T&Cs from SB showing that it is, has been, and will continue to be a standard practice.
Regardless of the fact that bidders here today first woke up to the fact that they are competing with the house for every lot at every auction. Other than, apparently, at GC. Pretty ironic, considering that the thread started out vilifying GC over removing a CMQ sticker, huh? 😀
Just a few weeks ago a Heritage auction coin had some bad pictures. I asked MFeld about the coin and he had new pictures taken. I'm sure this was just a fluke and will happen from time to time, but maybe there was someone at the firm who wanted a deal? If they had a policy against insider bidding I could feel confident that this is the case. Instead, I will always wonder...
They have a duty to all parties and should be neutral overall. The buyer is just as much of a customer as the seller is.
I think the paranoia of auction houses tanking auctions is misplaced. Auction houses want to support auctions, so they can advertise high price realizations and high percentage of lots sold. For major consignments, the auction house may even have a price floor deal with the consignor, wherein they only keep the buyer premium above a certain price point. If I were a consignor, I would definitely ask for price guarantees and auction support.
Where this issue become sticky is when buyers start to notice. A buyer might notice that they only win the mistakes, or trap coins. A buyer might also notice that their losing underbids keep coming back out for auction again six months later. Sometimes these are auction house buys, and sometimes these are private dealers engaging in the same bottom fishing tactics. Keep in mind some auction houses may want to muscle out private dealers who make mint cherry picking, too.
The honest way to put a price floor on coins is with an high opening bid or a high reserve. Auction houses don't like doing this for three reasons: they like the buzz around an auction that has a large number of early lowball bidders, they like the price discovery if their initial reserve price proves higher than market, and they like being able to market themselves as having few unsold lots.
Actually, no. They are agents for sellers. They have no duty to you as a bidder, other than to try to get you to bid as high as possible.
You just don't understand. They have a duty to their consignors, because they are their agent. You, as a bidder, are on the other side of the transaction.
In general, other than things like not committing fraud, sellers, and their agents, have no duties whatsoever to buyers. That's where the phrase caveat emptor comes from.
This thread is over
GC screwed up unintentionally
GC offered to make it right
GC revising policy
The end
You are 100% wrong. A auction house is an auction house it is a conflict of interest for both the buyer and seller for them to buy at their own auction. period. I suspect in some states it is illegal. ( not positive but it should be)
Martin
Most everyone here knows that the houses bid. Don't extrapolate from the few people who didn't.
This. Tank an auction and you stop getting consignments.
It is all about consignments. That's also why BPs are high. It allows the auction house to give more money to consignors.
I have bid on a few coins in the past from one auction company and lost only to see the coin listed in there inventory a week later. Many reasons this could have happened, BUT?
Mike
My Indians
Danco Set
It is both of course. Stickers are often applied to better-than-average coins that would bring premiums over more typical examples even in a world where stickers didn't exist. But stickers also give buyers the confidence to spend or bid (more than they otherwise would) based on images because they know an expert has reviewed the coin in hand and given it their seal of approval.
Going through this thread, you can certainly tell the folks that just LOVE to see their words in print.......
Love to tell the world how intelligent they think they are
some of yous need to give it a rest.....
If GC wants sell coins good for them. I have bought some of their bin stuff and done well with it retailing it at shows.
Then what is the buyer's premium for? Purportedly the BP is to compensate the auction firm for services provided.
If that's true, then they should not charge a BP because they are doing nothing for the buyer. They absolutely have duties to buyers after the hammer falls and a contract is established. Before the hammer falls the auction firm has a duty to the public to provide a fair buying process including truthful representation and full disclosure.
Further, Auction houses cannot become buyers of their own auctions while maintaining fiduciary duties to sellers as that is a conflict of interest. Many comments here have said that it's fine as long as it drives the price up in their favor but they fail to acknowledge that as a buyer the firm is working to pay as little as possible when they are buying. This conflict is irreconcilable even if it rarely results in a negative outcome for the seller in practice.
No buts. If you lost out on the coin and the house is offering the exact same coin for sale a week later, they outbid you.
That's not a crime, but now the auction is over, they have capital tied up in it, and they have to sell it. If you still want the coin, maybe call them up and make them an offer. Better yet, let it sit for a while and then make them an offer below your prior bid.
OTOH, if they sell it, at a price significantly above your bid with the juice, then they made a good call and you are not entitled to buy a coin below wholesale, as established by what they paid.
I understand what you're saying but I don't like it.
Without putting words in your mouth, what you're saying is that there is no way to be able to win an auction at a great price!
If the auction house is allowed to bid on a coin when they see it going for cheap they will just step in and place a bid on it. Call me naive but I didn't think that auction houses did that and I feel that conduct to be a bit shady.
Yes. I know that they have the right to do it I just didn't think that they did.
Consider me informed
Mike
My Indians
Danco Set
Interesting. I never looked at it that way.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
This thread has taken a life of its own.
There have actually been memes made about it.
Coin Photographer.
Kinda sorta. What I'm saying is that you can only win at a great price if the house allows it. This provides some level of protection for consignors who agree to no reserve auctions. It also provides a source for wholesale material for the house if no one is willing to pay retail at the auction.
As Mel Brooks said in "The History of the World, Part I," "It's good to be the King." There is no reason for an auction house that also has a retail affiliate to sit by while retail buyers scoop up items that it might want for inventory at prices below what it would be willing to pay for the item. So they don't.
It's not crazy once you understand it. While it might not sit well with you, it obviously serves the interests of both the auction house and the consignors, and that is their primary concern. Never to minimize prices realized for the benefit of bidders.
Also, ask @wondercoin if it works for him and his clients. 😀 It's their playground, their rules. You just get to play in it.
Bidding—Prohibited practices—Penalty.
The following requirements shall apply to bidding at auctions:
(1) An auctioneer conducting an auction and an auction company where an auction is being held shall not bid on or offer to buy any goods or real property at the auction unless the auctioneer or the auction company discloses the name of the person on whose behalf the bid or offer is being made.
(2) An auctioneer and an auction company shall not use any method of bidding at an auction that will allow goods or real property to be purchased in an undisclosed manner on behalf of the auctioneer or auction company.
(3) At a public auction conducted or supervised by an auctioneer or auction company, the auctioneer or auction company shall not fictitiously raise any bid, knowingly permit any person to make a fictitious bid, or employ or use another person to act as a bidder or buyer.
(4) All goods or real property offered for sale at an auction shall be subject to a reserve or a confirmation from the owner or consignor unless otherwise indicated by the auctioneer or auction company. Except as provided in this subsection, an auctioneer or auction company shall not use any method of bidding at an auction that allows the auctioneer or auction company to avoid selling any property offered for sale at auction.
(5) A licensee who violates any provision of this section shall be subject to an administrative fine in a sum not exceeding five hundred dollars for each violation.
[ 1986 c 324 § 22.]
This is a revised code of Washington state.
I’m not a legal scholar. As most have figured out. But it looks like in WA state
Says a house can bid for someone if it’s made public. I’m not sure though if it means it can bid for itself. I’m still leaning that they cannot. It reads to me they can proxy bid for others that cannot attend or choose that they do the bidding for them
Also I think GC does a great job at a fair price. And I’m not bashing any auction company. I just don’t think it is ethical for them to buy or run up bids on their own behalf. But after reading this thread it appears it is an industry standard.
Flame away. I can take it
Martin
In the interest of putting it all to rest I have a possible solution:
Maybe it would simplify things if the stickers were placed so the whole coin and grade are covered up? It'd sort of be like taking a chance purchasing an unknown box of coins where you don't actually get to see anything, but know they at least have third party approval.
Perhaps Ian should send OP a nice PM and work out a deal to change the thread title?
Something like Highjacked...bye bye
Or just cover the whole grade and description. Maybe then people would actually learn to grade for themselves, once again, as the old-timers did...
“I may not believe in myself but I believe in what I’m doing” ~Jimmy Page~
My Full Walker Registry Set (1916-1947)
https://www.ngccoin.com/registry/competitive-sets/16292/
Scrape off all the stickers, including CAC! If it is disclosed in the auction terms and conditions, who are you to complain? Just declare "Anything improperly affixed to the holder shall be removed..."
Given the direction this thread has gone, it must be acknowledged that auction house bidding is a popular topic for a reason. I'm guessing a majority of collectors would share surprise at the idea they are bidding against the house.
Most younger collectors start out on eBay these days, and graduate to the Big Leagues once their budgets and knowledge reach a certain level.
eBay has an explicit policy against shill bidding, which then frames the expectations and norms among newer collectors. I'm not saying eBay policy is right, only that most younger people learn eBay first. https://ebay.com/help/policies/selling-policies/selling-practices-policy/shill-bidding-policy?id=4353
It is completely understandable that auction houses want to support the market, especially in a very online world.
But current policy would also be considered shill bidding under eBay rules. Judging from the responses by sophisticated collectors like @alaura22 @ProofCollection @Martin a LOT of collectors are surprised to learn that they've been bidding against and often losing out to the auction house for years.
This should at least cause old hands to pause and think for a few seconds. The argument that collectors have no right to buy below wholesale raises an obvious retort: Why aren't any wholesalers bidding? To quote the great lawyer Mona Lisa Vito "The Defense is Wrong!" The issue is largely a deception one: an auction advertised as no reserve, when there is in fact a secret reserve, and no bargains to be had for retail participants.
Perhaps this topic deserves its own thread. The interest is certainly there.
>
Ya think?
We all know that auction houses can bid on coins they are auctioning but we would like to think they are not competing against us when we are bidding. How often does this happen? I have no idea and unless you work for an auction house or are well connected you don’t know for sure either. This is another one of those “secret” topics that nobody who knows has any desire to discuss. All we can do is speculate.
White out unwanted stickers is the answer.
I'm waiting for the day when the cacs start slabbing the stickers. Imagine the added value that will bring. :roll
The whole worlds off its rocker, buy Gold™.
this comment, best of the thread retort ever, true lol material!
As decided just to buy CACG if procuring CAC material so not an issue for me. Then refer to the CDN CPG for CAC when pricing for retail business.
Happy Sunday
As a bidder I would not want any other sticker than CAC on there anyway. Go GC! My assistant with her sharp nails says she could easily get them off.
Ok, after reading all this thread at least I can claim I learned something. Not being familiar with Rule 34, I googled it .
Were you thinking of White, Green, and Gold versions?