Bad Things That Happen to Auction Houses
Coinosaurus
Posts: 9,645 ✭✭✭✭✭
You'd think it would be easy to sit back and collect your 20% commission without risking any capital upfront. What could go wrong?
- Winning bidder reneges on high bid. Consignor thinks they made a big score but has bad news coming.
- Computer bidder swears they were the high bidder and has a screen shot to prove it. The lot has already been shipped to someone else.
- Your ace shipping department gets two deliveries mixed up and one of the recipients won't send the package back.
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Comments
A sold coin turns out to have been stolen.
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
Everything is computerized nowadays.... The server is hacked and the proceeds are converted to bitcoin...
The Firestone Tire collection is consigned with inflated reserves.
….or to be a counterfeit.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
It's a business. People aren't always happy. The distance between what happens and a person's expectations of what would happen determines their level of satisfaction.
Most of the things listed above aren't hard to deal with. The auction houses have policies to fall back on when things don't go well. The disappointed consignor has no recourse. The guy who wrongly received a coin in a shipping mix-up doesn't own it. Getting law enforcement involved takes a little leg work, but will ultimately solve the issue. The high bidder is ultimately decided by the auction house, so the guy with the screenshot has no recourse. The fraudulent CFO is a bigger issue.
Liability rightly belongs to them if they accept and sell a counterfeit. They'll likely have to eat that one unless it was wrongfully slabbed by a TPG.
The ones that would worry me the most would be a massive heist (a whole show worth of coins) or a critical software/hardware failure.
Losing a consignors coins!
Sunshine Rare Coins
sunshinecoins.com/store/c1/Featured_Products.html
People want a better website with auction history.
There’s risk and investment to keep the business operational and competitive.
A band of Gypsies showing up for the auction lot viewing.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Let me clarify something real quick: NO auction house makes 20%. Dirty little secret, you can get part of that 20% if you collection is big enough-or just act educated and ask. I know one firm were you can get 115-117% on really big coins (no, not us).
If I get the time I'l write an essay on what can go wrong-I've just about seen it all now after 30 major sales
Ca. 2008 Stacks lost a lot I was the successful bidder on. took a week of looking around and they finally found my MS-67 Texas commem and shipped it to me.
Long time ago I bid at lot of money (for me) on a coin in a Bowers and Merena auction. I was the high bidder until a day or so before the auction and then someone topped my bid. Since I was at my limit, I did not increase my now losing bid but instead bid on several other coins, effectively "spending" the money from my first bid. I won the other bids, only to be surprised when I was told I was also the winner of the first coin. I have no idea what happened, but it was a tight several months as I paid for everything.
More recently I won two lots in a Heritage auction, paid promptly and then waited for Heritage to ship. After a few weeks, nothing had shipped so I inquired. Turns out the coins had been stolen, so Heritage refunded me. Thankfully the coins were classic commemoratives so I was able to pick up comparable pieces later at lower prices.
I had the lot numbers (stickers) switched between two somewhat similar coins. The one I "won" and received was by far the more valuable of the two (10X). I contacted the auction house, returned it and got the correct coin in return. Had I been another sort....might have been costly for the auction house. Never got a "thank you", odd experience.
Same thing except I had to buy them both and hope I could convince them that the one was a mistake.
Heritage was very nice about it which surprised me.
I could have been on rations for a long time if they decided to throw a tantrum.
My Saint Set
No BS, on a $175G coin, it sold to a reputable customer. Got a panicked call 10 min later-his cat strolled across the keyboard.. It was too late to reopen the lot. The consignor wasn't pissed off thank goodness.
Can't tell you how many times collectors bid against themselves on web and live (Heritage an Stacks can vouch, I do that all the time).
Of course items get shipped to the wrong people.
You have a signed contract for a month or so and someone wants to dispute it AFTER the coin gets sold.
There are so many things that can go wrong that you wouldn't necessarily think of. A pipe bursts and damages your building. An executive harasses an employee. You have to fight off a lawsuit by a group of collectors who think your descriptions were fraudulent. There is a computer glitch/hack/power outage during a major auction. Etc. etc.
I’ve always thought auction math was interesting. With 20% BP, 115% of hammer is 92% of the total price. To me, getting 80% or 92% makes more sense than 115% which relies on an external number, the BP. I’m guessing it’s done this way because getting 100-115% sounds better than getting 80-92%?
The potted plants are shipped to the wrong auction room.
Just as in almost any business, many things can go wrong - and do!! After years running a large manufacturing operation, I stopped saying I had seen it all... There was always something weird that cropped up... Cheers, RickO
Do to error in listing by auction house your coin incorrectly described, realized 30 pct of its value, buyer will not return.