All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
If you're regularly getting outbid, perhaps you need to reconsider how you are arriving at the value of the coins you're bidding on.
I bid full value + on coins not counting the juice which means I am bidding 120+% of list and still loosing. You will never win a coin bidding only 80% of value unless it is something that NOBODY wants.
Taking the buyer’s premium into account when bidding is not the same thing as bidding “only 80% of value”.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
If you're regularly getting outbid, perhaps you need to reconsider how you are arriving at the value of the coins you're bidding on.
I bid full value + on coins not counting the juice which means I am bidding 120+% of list and still loosing. You will never win a coin bidding only 80% of value unless it is something that NOBODY wants.
Taking the buyer’s premium into account when bidding is not the same thing as bidding “only 80% of value”.
It most certainly is if you put a value on a coin, but will only bid 80% of that because of the juice.
All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
If you're regularly getting outbid, perhaps you need to reconsider how you are arriving at the value of the coins you're bidding on.
I bid full value + on coins not counting the juice which means I am bidding 120+% of list and still loosing. You will never win a coin bidding only 80% of value unless it is something that NOBODY wants.
Taking the buyer’s premium into account when bidding is not the same thing as bidding “only 80% of value”.
It most certainly is if you put a value on a coin, but will only bid 80% of that because of the juice.
Let me make it clearer to you in Esperanto.
Keep bidding on and buying what you like at whatever levels you like and at whatever percentage of what you think is right for you.
The rest of us are idiots. Thanks for leaving us a few scraps
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - Geo. Orwell
All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
If you're regularly getting outbid, perhaps you need to reconsider how you are arriving at the value of the coins you're bidding on.
I bid full value + on coins not counting the juice which means I am bidding 120+% of list and still loosing. You will never win a coin bidding only 80% of value unless it is something that NOBODY wants.
Taking the buyer’s premium into account when bidding is not the same thing as bidding “only 80% of value”.
It most certainly is if you put a value on a coin, but will only bid 80% of that because of the juice.
The juice is an undeniable portion of a bidder’s bid. If you bid 80% of X as a hammer bid (and the buyer’s premium is 20%), you’re bidding 96% of X.
The above scenario is the same as bidding 96% of X as a hammer bid in an auction that has no buyer’s premium.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Again you are misunderstanding me. All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
He didn't stop biding at "80%". He stopped bidding when 80+20="fair value".
First - here is how it only takes 1 bidder. Say there are 10 of us bidding on a $1200 coin. You and the other 8 bid it up to $1000 and will go no higher because the 1000+200=1200. I bid $1005 and win!
Second - If everyone went by the 80+20="fair value" rule.........sellers would always just get 80% for their coins because the auction company will get their 20%.
Third - There will ALWAYS be someone or more that will go over the 80% rule....unless it is an item with not much interest or demand.
But bidding $1005 is NOT you ignoring the 20% fee. It's you bidding an extra $5. I might bid $1010 on your $1200 coin because I want it that much. I might bid $1100. That isn't me ignoring the 20%BP. It's just me liking the coin. In all cases, my bid is 20% less than my definition of value. I might bid 50% more than you and still lose the coin if someone else likes it more. "80%" isn't a discount, it's just 20% less than I"m willing to actually pay.
For a LOT of coins, it is sellers just getting 80. Why do you think the face-to-face coin market has 100x the volume of the auction coin market? Certain things should NOT be auctioned. MS65 common date Morgans. Only an idiot sends them to GC or Heritage or Stack's - unless it is a fancy toner. The coin is going to sell for $80 + $20 and I'm going to get $80 when I could sell it for $80 to another dealer without the risk of auction or I could sell it to a retail customer for $90 or $100.
MS62 common date Saint? You send it to GC or eBay or Heritage, you must hate money. You will get 20% LESS THAN MELT on most of them!
Finally, there is NOT ALWAYS someone willing to go over the 80% rule. There are a lot of items that almost NEVER get to the 80% rule. Why do you think I can spend $50,000+ at auctions and then flip them to customers? It's not because my customers will pay 120% of "fair value". It is also why I only spend $50k to $100k each year when I leave over $1-$2 million in bids every year.
If you want to win, it costs. If you are cost conscious, you moderate your desire to win. But in either case, the 20% BP is a nonfactor.
In your example, let's say it is $1200 coin and there's zero BP. If you are willing to pay $1205, you will now bid $1205 instead of $1005. And if I was willing to bid $1200, I will still bid $1200. In either case, you still win $1205 to $1200 (+shipping) and it has NOTHING to do with the 20% BP or someone ignoring it.
All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
If you're regularly getting outbid, perhaps you need to reconsider how you are arriving at the value of the coins you're bidding on.
I bid full value + on coins not counting the juice which means I am bidding 120+% of list and still loosing. You will never win a coin bidding only 80% of value unless it is something that NOBODY wants.
I bought 5 coins last week at a bid of 80% of wholesale value (1 Heritage, 1 GC, 3 Stack's). I paid a total of 100% of WHOLESALE value. If you want to pay 101% of wholesale, I'll let you have it. You don't need to pay 120% of retail.
And it is not just crap. I bought a GORGEOUS MS66 PCGS CAC 1937 proof Buffalo from Stack's for a total of $1085 delivered to my house. Greysheet bid is $1100. [No CAC price available.]
All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
If you're regularly getting outbid, perhaps you need to reconsider how you are arriving at the value of the coins you're bidding on.
I bid full value + on coins not counting the juice which means I am bidding 120+% of list and still loosing. You will never win a coin bidding only 80% of value unless it is something that NOBODY wants.
You are still treating this 80% like it's a discount. I'm not bidding 80% of value, I'm bidding ONE HUNDRED PERCENT OF VALUE but I include the BP in the cost. Anyone who doesn't is always overpaying. For most coins that aren't terribly unique, I guarantee the dealer will sell it to you for 100% of value not 120% of value.
All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
If you're regularly getting outbid, perhaps you need to reconsider how you are arriving at the value of the coins you're bidding on.
I bid full value + on coins not counting the juice which means I am bidding 120+% of list and still loosing. You will never win a coin bidding only 80% of value unless it is something that NOBODY wants.
Taking the buyer’s premium into account when bidding is not the same thing as bidding “only 80% of value”.
It most certainly is if you put a value on a coin, but will only bid 80% of that because of the juice.
You, sir, are an auction house's dream! You always bid 120% of "value". If we can find one more of you, we can push up the sheet by 20%! Next year, you'll have to pay 144% of "sheet"...and then the next year...and the next...
If you have a twin brother, I'm going to start looking at estates in Hawaii!!!
It most certainly is if you put a value on a coin, but will only bid 80% of that because of the juice.
The juice is an undeniable portion of a bidder’s bid. If you bid 80% of X as a hammer bid (and the buyer’s premium is 20%), you’re bidding 96% of X.
The above scenario is the same as bidding 96% of X as a hammer bid in an auction that has no buyer’s premium.
This is the weirdest discussion yet. I've never heard anyone argue that we need to eliminate the BP because they refuse to consider the BP. And then imply I'm a loser who will never win an auction because I don't want to pay more than 100% of "value" total. [Value=subjective assessment; value NOT = greysheet bid]
It most certainly is if you put a value on a coin, but will only bid 80% of that because of the juice.
The juice is an undeniable portion of a bidder’s bid. If you bid 80% of X as a hammer bid (and the buyer’s premium is 20%), you’re bidding 96% of X.
The above scenario is the same as bidding 96% of X as a hammer bid in an auction that has no buyer’s premium.
This is the weirdest discussion yet. I've never heard anyone argue that we need to eliminate the BP because they refuse to consider the BP. And then imply I'm a loser who will never win an auction because I don't want to pay more than 100% of "value" total. [Value=subjective assessment; value NOT = greysheet bid]
I lose a number of Heritage auction quite often since for the most part I am not willing to go no more than 75% of "perceived value". before premium).
With no buyers premium I would be willing to bid 95% and quite likely still lose the auctions.
I knew there was a reason I took the "bookmark" off this discussion. 2+K views about paying an "extra value tax" to the "middle person" (LOL, PC crap ) for letting us buy something. One day, auction houses may go the way newsprint is heading as two of the top two "rags" in the country were "bailed-out" so they could continue to print nonsense.
@Insider2 said:
I knew there was a reason I took the "bookmark" off this discussion. 2+K views about paying an "extra value tax" to the "middle person" (LOL, PC crap ) for letting us buy something. One day, auction houses may go the way newsprint is heading as two of the top two "rags" in the country were "bailed-out" so they could continue to print nonsense.
Some 25 years before I bought my first gold coin I worked in a business that manufactured men's outerwear in the USA.
Sales slowed but we still needed to make our revenue numbers for corporate we took a shot and raised prices. Needless to say sales slowed further but still, at the next management meeting the question of raising prices came up once again. It was decided that we should fast forward the process and charge $8 million dollars for one coat (we needed revenues of 8 million to make corp happy. We spent the entire year looking for the $8 million customer. A bit exaggerated but I'm sure everyone can relate. LOL
@topstuf said:
Well at least the poll rejuvenated the forum.
The forum has been very active all this week anyway. Where have you been? Each day I log in there have been over 50 notifications - one day 135! Guess I have more bookmarks than you have.
Again you are misunderstanding me. All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
He didn't stop biding at "80%". He stopped bidding when 80+20="fair value".
First - here is how it only takes 1 bidder. Say there are 10 of us bidding on a $1200 coin. You and the other 8 bid it up to $1000 and will go no higher because the 1000+200=1200. I bid $1005 and win!
Second - If everyone went by the 80+20="fair value" rule.........sellers would always just get 80% for their coins because the auction company will get their 20%.
Third - There will ALWAYS be someone or more that will go over the 80% rule....unless it is an item with not much interest or demand.
But bidding $1005 is NOT you ignoring the 20% fee. It's you bidding an extra $5. I might bid $1010 on your $1200 coin because I want it that much. I might bid $1100. That isn't me ignoring the 20%BP. It's just me liking the coin. In all cases, my bid is 20% less than my definition of value. I might bid 50% more than you and still lose the coin if someone else likes it more. "80%" isn't a discount, it's just 20% less than I"m willing to actually pay.
For a LOT of coins, it is sellers just getting 80. Why do you think the face-to-face coin market has 100x the volume of the auction coin market? Certain things should NOT be auctioned. MS65 common date Morgans. Only an idiot sends them to GC or Heritage or Stack's - unless it is a fancy toner. The coin is going to sell for $80 + $20 and I'm going to get $80 when I could sell it for $80 to another dealer without the risk of auction or I could sell it to a retail customer for $90 or $100.
MS62 common date Saint? You send it to GC or eBay or Heritage, you must hate money. You will get 20% LESS THAN MELT on most of them!
Finally, there is NOT ALWAYS someone willing to go over the 80% rule. There are a lot of items that almost NEVER get to the 80% rule. Why do you think I can spend $50,000+ at auctions and then flip them to customers? It's not because my customers will pay 120% of "fair value". It is also why I only spend $50k to $100k each year when I leave over $1-$2 million in bids every year.
If you want to win, it costs. If you are cost conscious, you moderate your desire to win. But in either case, the 20% BP is a nonfactor.
In your example, let's say it is $1200 coin and there's zero BP. If you are willing to pay $1205, you will now bid $1205 instead of $1005. And if I was willing to bid $1200, I will still bid $1200. In either case, you still win $1205 to $1200 (+shipping) and it has NOTHING to do with the 20% BP or someone ignoring it.
Are you dense or what. My example was based on your statement that you will only bid 80% of value so that when the 20% juice is added you have then paid 100% of fair value.
If you got a proof Buffalo for grey sheet after juice.....you must have been the only one in the WORLD that wanted that coin!
@Insider2 said:
I knew there was a reason I took the "bookmark" off this discussion. 2+K views about paying an "extra value tax" to the "middle person" (LOL, PC crap ) for letting us buy something. One day, auction houses may go the way newsprint is heading as two of the top two "rags" in the country were "bailed-out" so they could continue to print nonsense.
@topstuf said:
Well at least the poll rejuvenated the forum.
The forum has been very active all this week anyway. Where have you been? Each day I log in there have been over 50 notifications - one day 135! Guess I have more bookmarks than you have.
Again you are misunderstanding me. All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
He didn't stop biding at "80%". He stopped bidding when 80+20="fair value".
First - here is how it only takes 1 bidder. Say there are 10 of us bidding on a $1200 coin. You and the other 8 bid it up to $1000 and will go no higher because the 1000+200=1200. I bid $1005 and win!
Second - If everyone went by the 80+20="fair value" rule.........sellers would always just get 80% for their coins because the auction company will get their 20%.
Third - There will ALWAYS be someone or more that will go over the 80% rule....unless it is an item with not much interest or demand.
But bidding $1005 is NOT you ignoring the 20% fee. It's you bidding an extra $5. I might bid $1010 on your $1200 coin because I want it that much. I might bid $1100. That isn't me ignoring the 20%BP. It's just me liking the coin. In all cases, my bid is 20% less than my definition of value. I might bid 50% more than you and still lose the coin if someone else likes it more. "80%" isn't a discount, it's just 20% less than I"m willing to actually pay.
For a LOT of coins, it is sellers just getting 80. Why do you think the face-to-face coin market has 100x the volume of the auction coin market? Certain things should NOT be auctioned. MS65 common date Morgans. Only an idiot sends them to GC or Heritage or Stack's - unless it is a fancy toner. The coin is going to sell for $80 + $20 and I'm going to get $80 when I could sell it for $80 to another dealer without the risk of auction or I could sell it to a retail customer for $90 or $100.
MS62 common date Saint? You send it to GC or eBay or Heritage, you must hate money. You will get 20% LESS THAN MELT on most of them!
Finally, there is NOT ALWAYS someone willing to go over the 80% rule. There are a lot of items that almost NEVER get to the 80% rule. Why do you think I can spend $50,000+ at auctions and then flip them to customers? It's not because my customers will pay 120% of "fair value". It is also why I only spend $50k to $100k each year when I leave over $1-$2 million in bids every year.
If you want to win, it costs. If you are cost conscious, you moderate your desire to win. But in either case, the 20% BP is a nonfactor.
In your example, let's say it is $1200 coin and there's zero BP. If you are willing to pay $1205, you will now bid $1205 instead of $1005. And if I was willing to bid $1200, I will still bid $1200. In either case, you still win $1205 to $1200 (+shipping) and it has NOTHING to do with the 20% BP or someone ignoring it.
Are you dense or what. My example was based on your statement that you will only bid 80% of value so that when the 20% juice is added you have then paid 100% of fair value.
If you got a proof Buffalo for grey sheet after juice.....you must have been the only one in the WORLD that wanted that coin!
This is my LAST reply to this thread!!!
@DIMEMAN -
Last year's Stacks ANA, lot 4144 1891-CC $5 MS64 CAC....
$4,320 with CDN bid at $6000
I must have been the only one in the world that wanted it, right? I watched online and pissed my pants when my low-ball book bid outwaited the hammer. I was stupid lucky, but prepared. You will not be. Because you already know, as you knew then, that such an event could not happen Not your area?
I'm not sure exactly how this disproves your point but your numerical sense, combined with your precision valuations, leads me to conclude you are clueless.
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - Geo. Orwell
@ColonelJessup I have always thought your post to be comical. You like to go on and on about how much you know about everything, but actually all you are is a blowhard.
@DIMEMAN said: @ColonelJessup I have always thought your post to be comical. You like to go on and on about how much you know about everything, but actually all you are is a blowhard.
You’r previous post was “This is my LAST reply to this thread!!!”
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@DIMEMAN said: @ColonelJessup I have always thought your post to be comical. You like to go on and on about how much you know about everything, but actually all you are is a blowhard.
You’r previous post was “This is my LAST reply to this thread!!!”
Well, to be fair, his last comment wasn't so much a "reply" as a brand new post.
I have known the Colonel for years and he is anything but a blowhard. If you bid on many different coins and areas you are going to buy items WELL below your bids. You will also get outbid by multiples on other lots.
With thousands of lots each major sale, why is it so difficult to understand this?
The reality is that it costs $$$'s to produce auctions. The house needs to make SOMETHING to stay in business.
Colonel I need to get out to NYC in the near future. I miss our Peking Duck Dinners in Chinatown...
The house needs to make SOMETHING to stay in business.
The question posed was hypothetical. Nobody doubts that money is needed for Heritage to maintain that 16 story glass skyscraper and the hundreds of employees, benefits, 401K matching, stock options, 6 month maternity leave and the twice annual company sponsored vacation in Cancun. This has never been in doubt.
Transactions costs exist and the infrastructure that helps to siphon money out from collectors and into the general economy is what we all accept. This is all known and beloved by all. Seems posters here are more grateful than concerned as should be. Throwing money into the sucking maw of the corporate tentacles that have enveloped the hobby is duly noted and appreciated.
Thank you to all the corporations and entities that make my coin buying and selling so fruitful.
@jmlanzaf said:
I don't believe that collectors should think that there is ANY investment value in coins. It's a hobby, not an investment.
So at what point does the average collector realize it's no longer just a hobby? When he/she buys a $50 coin, $100 coin, a $500 coin, a $1000 coin...? When the annual purchases start adding up, it becomes an investment.
When we say investment, we imply there will be some kind of financial return on that investment. The distinction shouldn't necessarily depend on the dollar value.
hobby vs. investment should be independent of dollar amount. Obviously, that becomes harder to do if you are spending a significant portion of your income on the hobby. But it should be discretionary dollars (hobby dollars) not retirement contributions. Always. Any other expectation is almost guaranteed to disappoint and sucks the joy from the hobby.
If we limit the concept of coin collecting to something similar to collecting "shoes" and say it's only a hobby, the collector population for coins would decrease significantly.
@jmlanzaf said:
I don't believe that collectors should think that there is ANY investment value in coins. It's a hobby, not an investment.
So at what point does the average collector realize it's no longer just a hobby? When he/she buys a $50 coin, $100 coin, a $500 coin, a $1000 coin...? When the annual purchases start adding up, it becomes an investment.
When we say investment, we imply there will be some kind of financial return on that investment. The on the hobby. But it should be discretionary dollars (hobby dollars) not retirement contributions. Always. Any other expectation is almost guaranteed to disappoint and sucks the joy from the hobby.
If we limit the concept of coin collecting to something similar to collecting "shoes" and say it's only a hobby, the collector population for coins would decrease significantly.
That's a theory. I'm not sure how true it is. The vast majority of all collectors lose money on their "investment". This is especially true if opportunity costs and inflation are considered. How do you balance the affect of the resulting disillusionment against the affect of the greedy dreaming?
I've personally seen dozens if not hundreds of "collectors" abandon the hobby when they discover that the overpriced pile of crap they bought as an "investment" is worth but a fraction of what they paid for it. I don't know the answer, but I suspect that the affect on the hobby of a healthier outlook may be more positive than negative in the long run.
Auction markets are ripe for disruption, as are other "high fee" ventures such as real estate transactions. Expect fees to collapse over the next 20 years.
@cohodk said:
Auction markets are ripe for disruption, as are other "high fee" ventures such as real estate transactions. Expect fees to collapse over the next 20 years.
Disagree.
Considering the fee structure of The Great Disrupter (Amazon) is also 20+%, I'm not sure who is going to disrupt the Disrupter.
The house needs to make SOMETHING to stay in business.
The question posed was hypothetical. Nobody doubts that money is needed for Heritage to maintain that 16 story glass skyscraper and the hundreds of employees, benefits, 401K matching, stock options, 6 month maternity leave and the twice-annual company-sponsored vacation in Cancun.
@jmlanzaf said:
I don't know the answer, but I suspect that the affect on the hobby of a healthier outlook may be more positive than negative in the long run.
Maybe not THE answer, but one of the answers would be for collectors to sell something now and then, if for no other reason than to gain a better understanding of how the market values their coins. Based on just the posts on this message board, there is some serious misunderstanding going on.
@jmlanzaf said:
I don't know the answer, but I suspect that the affect on the hobby of a healthier outlook may be more positive than negative in the long run.
Maybe not THE answer, but one of the answers would be for collectors to sell something now and then, if for no other reason than to gain a better understanding of how the market values their coins. Based on just the posts on this message board, there is some serious misunderstanding going on.
I'm not sure the biggest issue is misunderstanding how the market values their coins. It seems to be more a misunderstanding of business costs and added value.
Many people seem to feel like there should be a near zero bid/ask spread. They feel entitled to buy a coin this year and sell it next year at little to no loss. It's almost an assumption of a constantly rising market.
There also seem to be misunderstandings about auctions and dealers. Many seem to feel that dealers are crooks and you need to sell at auction to get "fair value". This feeds into their feeling that auctions should have little to no cost associated with them so that you can buy it from Heritage/GC/Stacks this year and sell it next year at little or no loss, or even a profit.
In my experience, the cost model for coins is pretty uniform:
Dealers work on average bid/ask spreads of 20%: less for bullion and premium items, more for widgets.
Major Auction houses work on average bid/ask spreads of 20-25%: less on premium items, more for widgets.
Even internet only houses have similar cost structures with eBay and GC both in the 15% range: less for premium (expensive) items, more for widgets (low cost items).
Even if you look at a non-coin operation like Amazon, their cut of the action is 20+% which is why there are very few coins on Amazon.
Now, either this is the biggest collusion of all time - and no one has yet invited me to one of the dealer collusion meetings - or that is simply the cost of doing this particular business.
Yes, you could go the coin club/BST/garage sale route. But that ignores the other thing I mentioned: added value.
I use eBay because I can sell more things to more people than I ever could on BST or coin clubs. Good luck selling a 17th century Persian coin at your local coin club for anywhere near "fair value". Do you really think someone on BST would pay anywhere near "fair value" for premium coins that garner major auction interest? Would anyone on BST pay "fair value" for my Congo proof set? And coin clubs are not exactly full of motivated buyers. Most coin clubs have a lot of old-timers who are only looking for very specific material.
Some things you could sell easily. Bullion near melt. BST might work. Would it work if you had $20k in bullion? I don't know. But why would anyone on BST pay you more than they could pay their local dealer? So by the time you handle payment and shipping and associated costs and risks, how much better are you doing?
Heritage and Stacks have glossy catalogues, huge presence at major shows around the globe and a dedicated customer base. You pay them for the eyeballs. You pay eBay and GC for the eyeballs. And garnering those eyeballs costs money. GROSS 25% auction fees is not NET 25% profit.
If this service was so grossly overpriced and insanely profitable, the disrupters would already be moving in. Where are they? If one emerges (GC), it's not an accident that their fees are in the same ballpark as their most similar competitor (eBay for GC).
Major Auction houses work on average bid/ask spreads of 20-25%: less on premium items, more for widgets.
Well said, I only disagree with the above statement. If the buyer's premium is 20%, the seller's premium is not 0-5%. Today it is normally 20% and it's difficult to get it discounted.
As @MasonG said:
one of the answers would be for collectors to sell something now and then
All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
If you're regularly getting outbid, perhaps you need to reconsider how you are arriving at the value of the coins you're bidding on.
I bid full value + on coins not counting the juice which means I am bidding 120+% of list and still loosing. You will never win a coin bidding only 80% of value unless it is something that NOBODY wants.
I bought 5 coins last week at a bid of 80% of wholesale value (1 Heritage, 1 GC, 3 Stack's). I paid a total of 100% of WHOLESALE value. If you want to pay 101% of wholesale, I'll let you have it. You don't need to pay 120% of retail.
And it is not just crap. I bought a GORGEOUS MS66 PCGS CAC 1937 proof Buffalo from Stack's for a total of $1085 delivered to my house. Greysheet bid is $1100. [No CAC price available.]
You are a dealer !
I manage money. I earn money. I save money . I give away money. I collect money. I don’t love money . I do love the Lord God.
All I am saying is that if you limit your bid to 80% of it's value to account for the buyers fee you probably won't win the auction because other bidders will bid the full value and then pay the extra 20%.
If you're regularly getting outbid, perhaps you need to reconsider how you are arriving at the value of the coins you're bidding on.
I bid full value + on coins not counting the juice which means I am bidding 120+% of list and still loosing. You will never win a coin bidding only 80% of value unless it is something that NOBODY wants.
I bought 5 coins last week at a bid of 80% of wholesale value (1 Heritage, 1 GC, 3 Stack's). I paid a total of 100% of WHOLESALE value. If you want to pay 101% of wholesale, I'll let you have it. You don't need to pay 120% of retail.
And it is not just crap. I bought a GORGEOUS MS66 PCGS CAC 1937 proof Buffalo from Stack's for a total of $1085 delivered to my house. Greysheet bid is $1100. [No CAC price available.]
You are a dealer !
Yes, but I bid like the rest of you. The only point was that, contrary to what dimeman was saying, you don't have to be 20% over "fair value" to win the auction.
@cohodk said:
Auction markets are ripe for disruption, as are other "high fee" ventures such as real estate transactions. Expect fees to collapse over the next 20 years.
Disagree.
Considering the fee structure of The Great Disrupter (Amazon) is also 20+%, I'm not sure who is going to disrupt the Disrupter.
You (as in we) will. And its already started. This thread is proof.
We know that auction firms cannot legally collude to raise commission rates, but could they legally agree to simultaneously reduce their BPs to zero?
The reason they dont is then they have less opportunity to charge the uninformed seller double rates.
Consider- most auction houses have a 10-15% sellers fee that we in the know know can be removed easily when selling- in fact you can easily negotiate into the buyers premium.
But the unsuspecting retail seller is told "we only charge 10-15% sellers fee and when they see the hammer is $10,000 they take there $8500-$9,000 and are happy. If they ever were to be told that the 10-15% sellers fee is really equal to 30-35% they would not be so happy.
@cohodk said:
Auction markets are ripe for disruption, as are other "high fee" ventures such as real estate transactions. Expect fees to collapse over the next 20 years.
Disagree.
Considering the fee structure of The Great Disrupter (Amazon) is also 20+%, I'm not sure who is going to disrupt the Disrupter.
You (as in we) will. And its already started. This thread is proof.
This thread is proof of nothing of the sort.
This thread proves people like to complain. This thread proves people don't understand business. But all the people complaining PAY the BP and will continue to pay it as long as they are getting the coins they want. The BP allows the auction houses to entice large collections of great material and gives those collections visibility at sale. You can have a garage sale at your house for free but no one will buy because either there's nothing good there and/or no one knows it is going on.
If there were a better way to do this more cheaply, someone would be doing it. 20% is a pretty modest retail commission for most industries. It is NOT excessive. You only notice it at auction because they add it on. Next time you are at a shoe store, ask them to please break your receipt into wholesale price & house commission.
People think coins should somehow be different and not subject to the rules of commerce. They are not. It costs money to run a business. Auction houses aren't pocketing 25% of the sale price. They are probably pocketing 1 or 2% of the sale price, the other 23 or 24% is the cost of running the operation.
Can they cut costs? Sure. But it will hurt business.
The can stop producing quality photos. They can stop offering free appraisals. They can stop producing catalogs. They can stop travelling to shows. They can stop selling million dollar coins for essentially 0% BP&SP. But somewhere along the road of cost-cutting, they will stop getting coins and you will stop buying there because they don't have anything worth buying.
By all means, stay away from auctions with a 20% BP. I look forward to not bidding against you. And the 20% house will have ALL the good coins and your Zero Fee house will have widgets and nothing but widgets.
eBay is already half the price of Stack's and Heritage. Not zero, but HALF the price. There are some good coins there but a lot of crap. What do you think your zero fee house will have? Less good coins and more crap than eBay.
@DIMEMAN said: @ColonelJessup I have always thought your post to be comical. You like to go on and on about how much you know about everything, but actually all you are is a blowhard.
You’r previous post was “This is my LAST reply to this thread!!!”
The auction business is really predicated on volume. Frankly, everyone's margins are basically the same (the major auction houses). The costs to produce a single auction at a major venue are also relatively fixed. in many cases, a $5 Million Dollar Sale is a loser, whereas a $50 Million Dollar Sale is a home run. Consignors are really paying for access to the auction houses book of buyers. If you don't like it, buy or consign elsewhere.
@cnncoins said:
Consignors are really paying for access to the auction houses book of buyers.
Yep. Some consignors seem to think the charge for this should be minimal, but I'd be surprised if they'd be willing to invest the same amount of time and money into putting together that list of buyers that the auction houses have.
Comments
Taking the buyer’s premium into account when bidding is not the same thing as bidding “only 80% of value”.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
It most certainly is if you put a value on a coin, but will only bid 80% of that because of the juice.
,> @DIMEMAN said:
Let me make it clearer to you in Esperanto.
Keep bidding on and buying what you like at whatever levels you like and at whatever percentage of what you think is right for you.
The rest of us are idiots.
Thanks for leaving us a few scraps 
The juice is an undeniable portion of a bidder’s bid. If you bid 80% of X as a hammer bid (and the buyer’s premium is 20%), you’re bidding 96% of X.
The above scenario is the same as bidding 96% of X as a hammer bid in an auction that has no buyer’s premium.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
But bidding $1005 is NOT you ignoring the 20% fee. It's you bidding an extra $5. I might bid $1010 on your $1200 coin because I want it that much. I might bid $1100. That isn't me ignoring the 20%BP. It's just me liking the coin. In all cases, my bid is 20% less than my definition of value. I might bid 50% more than you and still lose the coin if someone else likes it more. "80%" isn't a discount, it's just 20% less than I"m willing to actually pay.
For a LOT of coins, it is sellers just getting 80. Why do you think the face-to-face coin market has 100x the volume of the auction coin market? Certain things should NOT be auctioned. MS65 common date Morgans. Only an idiot sends them to GC or Heritage or Stack's - unless it is a fancy toner. The coin is going to sell for $80 + $20 and I'm going to get $80 when I could sell it for $80 to another dealer without the risk of auction or I could sell it to a retail customer for $90 or $100.
MS62 common date Saint? You send it to GC or eBay or Heritage, you must hate money. You will get 20% LESS THAN MELT on most of them!
Finally, there is NOT ALWAYS someone willing to go over the 80% rule. There are a lot of items that almost NEVER get to the 80% rule. Why do you think I can spend $50,000+ at auctions and then flip them to customers? It's not because my customers will pay 120% of "fair value". It is also why I only spend $50k to $100k each year when I leave over $1-$2 million in bids every year.
If you want to win, it costs. If you are cost conscious, you moderate your desire to win. But in either case, the 20% BP is a nonfactor.
In your example, let's say it is $1200 coin and there's zero BP. If you are willing to pay $1205, you will now bid $1205 instead of $1005. And if I was willing to bid $1200, I will still bid $1200. In either case, you still win $1205 to $1200 (+shipping) and it has NOTHING to do with the 20% BP or someone ignoring it.
I bought 5 coins last week at a bid of 80% of wholesale value (1 Heritage, 1 GC, 3 Stack's). I paid a total of 100% of WHOLESALE value. If you want to pay 101% of wholesale, I'll let you have it. You don't need to pay 120% of retail.
And it is not just crap. I bought a GORGEOUS MS66 PCGS CAC 1937 proof Buffalo from Stack's for a total of $1085 delivered to my house. Greysheet bid is $1100. [No CAC price available.]
You are still treating this 80% like it's a discount. I'm not bidding 80% of value, I'm bidding ONE HUNDRED PERCENT OF VALUE but I include the BP in the cost. Anyone who doesn't is always overpaying. For most coins that aren't terribly unique, I guarantee the dealer will sell it to you for 100% of value not 120% of value.
You, sir, are an auction house's dream! You always bid 120% of "value". If we can find one more of you, we can push up the sheet by 20%! Next year, you'll have to pay 144% of "sheet"...and then the next year...and the next...
If you have a twin brother, I'm going to start looking at estates in Hawaii!!!
This is the weirdest discussion yet. I've never heard anyone argue that we need to eliminate the BP because they refuse to consider the BP. And then imply I'm a loser who will never win an auction because I don't want to pay more than 100% of "value" total. [Value=subjective assessment; value NOT = greysheet bid]
I lose a number of Heritage auction quite often since for the most part I am not willing to go no more than 75% of "perceived value". before premium).
With no buyers premium I would be willing to bid 95% and quite likely still lose the auctions.
I knew there was a reason I took the "bookmark" off this discussion. 2+K views about paying an "extra value tax" to the "middle person" (LOL, PC crap
) for letting us buy something. One day, auction houses may go the way newsprint is heading as two of the top two "rags" in the country were "bailed-out" so they could continue to print nonsense.
Some 25 years before I bought my first gold coin I worked in a business that manufactured men's outerwear in the USA.
Sales slowed but we still needed to make our revenue numbers for corporate we took a shot and raised prices. Needless to say sales slowed further but still, at the next management meeting the question of raising prices came up once again. It was decided that we should fast forward the process and charge $8 million dollars for one coat (we needed revenues of 8 million to make corp happy. We spent the entire year looking for the $8 million customer. A bit exaggerated but I'm sure everyone can relate. LOL
Well at least the poll rejuvenated the forum.
The forum has been very active all this week anyway. Where have you been? Each day I log in there have been over 50 notifications - one day 135! Guess I have more bookmarks than you have.
Are you dense or what. My example was based on your statement that you will only bid 80% of value so that when the 20% juice is added you have then paid 100% of fair value.
If you got a proof Buffalo for grey sheet after juice.....you must have been the only one in the WORLD that wanted that coin!
This is my LAST reply to this thread!!!
I've been searching for the auctioneers who have no buyer fee.
Found TEN!
All in Nigeria but still......
@DIMEMAN -
Last year's Stacks ANA, lot 4144 1891-CC $5 MS64 CAC....
$4,320 with CDN bid at $6000
I must have been the only one in the world that wanted it, right? I watched online and pissed my pants when my low-ball book bid outwaited the hammer. I was stupid lucky, but prepared. You will not be. Because you already know, as you knew then, that such an event could not happen
Not your area?
I'm not sure exactly how this disproves your point but your numerical sense, combined with your precision valuations, leads me to conclude you are clueless.
I may be dense, but it's not because I choose to only pay 100% of value. That almost seems to be the very definition of value.
I'm glad I don't do much with dimes. Apparently the market is 20% ahead of the market....
@ColonelJessup I have always thought your post to be comical. You like to go on and on about how much you know about everything, but actually all you are is a blowhard.
You’r previous post was “This is my LAST reply to this thread!!!”
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Well, to be fair, his last comment wasn't so much a "reply" as a brand new post.
Do they take PayPal?
I have known the Colonel for years and he is anything but a blowhard. If you bid on many different coins and areas you are going to buy items WELL below your bids. You will also get outbid by multiples on other lots.
With thousands of lots each major sale, why is it so difficult to understand this?
The reality is that it costs $$$'s to produce auctions. The house needs to make SOMETHING to stay in business.
Colonel I need to get out to NYC in the near future. I miss our Peking Duck Dinners in Chinatown...
The house needs to make SOMETHING to stay in business.
The question posed was hypothetical. Nobody doubts that money is needed for Heritage to maintain that 16 story glass skyscraper and the hundreds of employees, benefits, 401K matching, stock options, 6 month maternity leave and the twice annual company sponsored vacation in Cancun. This has never been in doubt.
Transactions costs exist and the infrastructure that helps to siphon money out from collectors and into the general economy is what we all accept. This is all known and beloved by all. Seems posters here are more grateful than concerned as should be. Throwing money into the sucking maw of the corporate tentacles that have enveloped the hobby is duly noted and appreciated.
Thank you to all the corporations and entities that make my coin buying and selling so fruitful.
The sucking maw and its symbiotes thank you. Sluuuuuurp
They offer coins for sale. Nobody is forced to do business with them.
BitPal.
If we limit the concept of coin collecting to something similar to collecting "shoes" and say it's only a hobby, the collector population for coins would decrease significantly.
That's a theory. I'm not sure how true it is. The vast majority of all collectors lose money on their "investment". This is especially true if opportunity costs and inflation are considered. How do you balance the affect of the resulting disillusionment against the affect of the greedy dreaming?
I've personally seen dozens if not hundreds of "collectors" abandon the hobby when they discover that the overpriced pile of crap they bought as an "investment" is worth but a fraction of what they paid for it. I don't know the answer, but I suspect that the affect on the hobby of a healthier outlook may be more positive than negative in the long run.
Auction markets are ripe for disruption, as are other "high fee" ventures such as real estate transactions. Expect fees to collapse over the next 20 years.
Knowledge is the enemy of fear
Disagree.
Considering the fee structure of The Great Disrupter (Amazon) is also 20+%, I'm not sure who is going to disrupt the Disrupter.
Damn, I've been working for the wrong employers!
I never thought of that, thanks!
Maybe not THE answer, but one of the answers would be for collectors to sell something now and then, if for no other reason than to gain a better understanding of how the market values their coins. Based on just the posts on this message board, there is some serious misunderstanding going on.
I'm not sure the biggest issue is misunderstanding how the market values their coins. It seems to be more a misunderstanding of business costs and added value.
Many people seem to feel like there should be a near zero bid/ask spread. They feel entitled to buy a coin this year and sell it next year at little to no loss. It's almost an assumption of a constantly rising market.
There also seem to be misunderstandings about auctions and dealers. Many seem to feel that dealers are crooks and you need to sell at auction to get "fair value". This feeds into their feeling that auctions should have little to no cost associated with them so that you can buy it from Heritage/GC/Stacks this year and sell it next year at little or no loss, or even a profit.
In my experience, the cost model for coins is pretty uniform:
Dealers work on average bid/ask spreads of 20%: less for bullion and premium items, more for widgets.
Major Auction houses work on average bid/ask spreads of 20-25%: less on premium items, more for widgets.
Even internet only houses have similar cost structures with eBay and GC both in the 15% range: less for premium (expensive) items, more for widgets (low cost items).
Even if you look at a non-coin operation like Amazon, their cut of the action is 20+% which is why there are very few coins on Amazon.
Now, either this is the biggest collusion of all time - and no one has yet invited me to one of the dealer collusion meetings - or that is simply the cost of doing this particular business.
Yes, you could go the coin club/BST/garage sale route. But that ignores the other thing I mentioned: added value.
I use eBay because I can sell more things to more people than I ever could on BST or coin clubs. Good luck selling a 17th century Persian coin at your local coin club for anywhere near "fair value". Do you really think someone on BST would pay anywhere near "fair value" for premium coins that garner major auction interest? Would anyone on BST pay "fair value" for my Congo proof set? And coin clubs are not exactly full of motivated buyers. Most coin clubs have a lot of old-timers who are only looking for very specific material.
Some things you could sell easily. Bullion near melt. BST might work. Would it work if you had $20k in bullion? I don't know. But why would anyone on BST pay you more than they could pay their local dealer? So by the time you handle payment and shipping and associated costs and risks, how much better are you doing?
Heritage and Stacks have glossy catalogues, huge presence at major shows around the globe and a dedicated customer base. You pay them for the eyeballs. You pay eBay and GC for the eyeballs. And garnering those eyeballs costs money. GROSS 25% auction fees is not NET 25% profit.
If this service was so grossly overpriced and insanely profitable, the disrupters would already be moving in. Where are they? If one emerges (GC), it's not an accident that their fees are in the same ballpark as their most similar competitor (eBay for GC).
There isn't anything in your post I would disagree with.
This is what I meant when I included the Tom Hanks movie quote.
I wasn't disagreeing with you, either. Just expanding the thought.
Well said, I only disagree with the above statement. If the buyer's premium is 20%, the seller's premium is not 0-5%. Today it is normally 20% and it's difficult to get it discounted.
As
@MasonG said:
You are a dealer !
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Yes, but I bid like the rest of you. The only point was that, contrary to what dimeman was saying, you don't have to be 20% over "fair value" to win the auction.
You (as in we) will. And its already started. This thread is proof.
Knowledge is the enemy of fear
The reason they dont is then they have less opportunity to charge the uninformed seller double rates.
Consider- most auction houses have a 10-15% sellers fee that we in the know know can be removed easily when selling- in fact you can easily negotiate into the buyers premium.
But the unsuspecting retail seller is told "we only charge 10-15% sellers fee and when they see the hammer is $10,000 they take there $8500-$9,000 and are happy. If they ever were to be told that the 10-15% sellers fee is really equal to 30-35% they would not be so happy.
This thread is proof of nothing of the sort.
This thread proves people like to complain. This thread proves people don't understand business. But all the people complaining PAY the BP and will continue to pay it as long as they are getting the coins they want. The BP allows the auction houses to entice large collections of great material and gives those collections visibility at sale. You can have a garage sale at your house for free but no one will buy because either there's nothing good there and/or no one knows it is going on.
If there were a better way to do this more cheaply, someone would be doing it. 20% is a pretty modest retail commission for most industries. It is NOT excessive. You only notice it at auction because they add it on. Next time you are at a shoe store, ask them to please break your receipt into wholesale price & house commission.
People think coins should somehow be different and not subject to the rules of commerce. They are not. It costs money to run a business. Auction houses aren't pocketing 25% of the sale price. They are probably pocketing 1 or 2% of the sale price, the other 23 or 24% is the cost of running the operation.
Can they cut costs? Sure. But it will hurt business.
The can stop producing quality photos. They can stop offering free appraisals. They can stop producing catalogs. They can stop travelling to shows. They can stop selling million dollar coins for essentially 0% BP&SP. But somewhere along the road of cost-cutting, they will stop getting coins and you will stop buying there because they don't have anything worth buying.
By all means, stay away from auctions with a 20% BP. I look forward to not bidding against you. And the 20% house will have ALL the good coins and your Zero Fee house will have widgets and nothing but widgets.
eBay is already half the price of Stack's and Heritage. Not zero, but HALF the price. There are some good coins there but a lot of crap. What do you think your zero fee house will have? Less good coins and more crap than eBay.
Are you new to the forum?
The auction business is really predicated on volume. Frankly, everyone's margins are basically the same (the major auction houses). The costs to produce a single auction at a major venue are also relatively fixed. in many cases, a $5 Million Dollar Sale is a loser, whereas a $50 Million Dollar Sale is a home run. Consignors are really paying for access to the auction houses book of buyers. If you don't like it, buy or consign elsewhere.
Yep. Some consignors seem to think the charge for this should be minimal, but I'd be surprised if they'd be willing to invest the same amount of time and money into putting together that list of buyers that the auction houses have.
Well the thread has successfully accomplished a full 180.
How would removing the buyer's premium rejuvenate that part of the market that isn't connected to auctions?
Osmosis
300!