Why don’t the big numismatic auction firms protect their image like Sotheby’s and base sales off of

Longacre

I was reading the current issue of Esylum, and Alan Weinberg wrote a very nice article about the George Washington/Marquis de Lafayette Order of the Society of the Cincinnati gold medal, which will be auctioned by Sotheby’s on December 11th. The pre-sale estimate is $4-10 million. Alan then writes,

“Sotheby's, to protect their image and credibility
will not sell anything for less than approx 60% (or more - perhaps
80%) of their low estimate. This is standard among the 'better'
auction houses. 60% of the low estimate of $4 million is still
$2.4 million. My guess is it won't sell."


I never knew this. This is a very interesting concept, and to my knowledge, the numismatic auction firms do not follow this policy.

Because the numismatic market is flooded with too many auction firms, does anyone think that one firm can rise above the others by projecting an “image” of exclusivity and institute a policy like Sotheby’s? As they say, image is everything. What do you think?

Coinosaurus

I doubt it. The volume of widget material constitutes too high a percentage of this market. Heritage is the biggest precisely because they serve this part of the market very well. This in turn gives them more capability to negotiate on the very high end items.

There might be a room for a boutique auction house that handles only very high end material, but they would be hard pressed to keep their mindshare with infrequent sales.

Jamericon

Lyn Knight Currency Auctions does have this policy. Nothing opens at less than 60% of the low estimate.

jonathanb

Don't most numismatic auction firms have de facto similar policies? Heritage will sell some lots with no reserve, but Stacks always seems to set a minimum opening bid. They don't always list an explicit estimate, but I always figured that the opening bid was some consistent percentage of what they were estimating internally...

291fifth

Many auction houses also deal in the type of material they auction. They can't let the material go too low because it would hurt their retail market. I ran into this problem with a local auction house back in the 1980's. I sat in the auction and watched my consignment of oriental rugs sell. Most were later returned with the excuse that the buyers didn't pay. In truth, the paintings on the wall (no potted plants in this gallery) were apparently very active bidders. I never dealt with the firm again, buying or selling. They remain a big name locally to this day.

RoundandShiny

Most numismatic auction houses have similar frameworks that go unmentioned. We consistantly open the bidding for lots at 60-70% of a conservative estimate. We also offer our consignor's the option of allowing us to place reserves at 70% of our estimates. This is a way in which we help consignor's prevent buyback fees. Depending on the contents of a collection, we will also provide a guarantee that the collection in its entirety will reach a certain aggregate level.
That being said, we are providing auctions with a considerable retail buying base. Coins in our auctions bring solid prices and we are not seeing coins fall through the cracks.
Feel free to email me if you have any questions about how and why we structure our auction terms the way we do.

Thanks,

Aaron

1794half1839

In our (Smythe's) terms of sale it says, bids below 60% of the low estimate will not be accepted.