Why don't the big cities have small auction houses?

hchcoin

I grew up in a big city. I now live in a very rural area about 2 hours from any metro area. One thing I love about living in the country is that they have a ton of small auction companies around these parts. Within 30 minutes of my house there are probably 5 auction firms. They seem to sell a lot of items from estates and also from farms. Every few weeks coins pop up on the auction listings along side tractors and antiques in the local paper. When I go to the auction, there are always 20 to 30 people bidding on coins. Prices range from ridiculously cheap to ridiculously over priced depending on who is there and what the items are.

It got me thinking about when I lived in a metro area. I don't ever remember seeing auctions like this taking place even though there were over 1,000,000 people in a small geographic area. Never once did I see a coin auction advertised in the newspaper growing up. I know this business model works in a rural setting, what prevents it from working in the big city?

GotTheBug

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ricko

We have several small auction houses in this area, however, I have never seen coins offered. Cheers, RickO

gypsylea

Around here, the small auction houses share two characteristics. (1) they are family owned and operated with several family members making all or part of their (perhaps modest) living from it; (2) they own their own buildings and thus control a large part of their overhead costs. Hard to see that model working in the big city.

crazyhounddog

<< <i>We have several small auction houses in this area, however, I have never seen coins offered. Cheers, RickO >>



Yeah, down in the valley they have huge auction houses. They auction off farm equipment.

DaveG

I live in the northern New Jersey suburbs of NYC - there are a number of smaller auction houses around here.

Some of them don't have fixed venues and many of them have Internet presences, but once you're plugged into the auction scene, you can find them.

MGLICKER

A few bid boards in town. Guess that qualifies as an auction.

CoinZip

<< <i>Why don't the big cities have small auction houses? >>




Its simple, the numbers needed to pay expenses just don't work.

Lets say your operating cost in a big city for an auction house is 10k a month, I suspect this is way low.

To cover your expenses, operating on 25% you would have to sell 40,000 a month just to pay the bills. If you had 1 auction a month with 500 lots in it, the average cost per lot would have to be 80 bucks to hit the 40k needed to cover expenses.

Now imagine the stress of knowing you have to find 500 items every month that will sell for 80 bucks each just to pay the bills.........

shorecoll

We have several small auctions in this area and they have coins, but the coins are controlled by a small group of (undisclosed) vest pocket dealers. The coins are mostly junk placed by these guys. Occasionally there is some true estate stuff but mostly it's recycled eBay cull stuff. I also think they shill each others stuff to keep prices in line. I think this because you'll see the same junk in multiple auctions.

bronco2078

Was your large city in a climate where potted plants couldn't survive?