Collection Liquidation "auction" Question/comments
jdimmick
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Customer X Has a collection valued at around low to mid 6 figures, it consists of all graded Choice Better date coins and type. Nearly all are cac'd. Also, the collection is less than a box of 20 coins, wtih avg value just over 5 figures.
Narrowing it down to 2 auctions companies Great Collections or Legend. (Both of which post here, and are highly respected by myself, many on here and the collecting community as well. So I am not looking for posting of negative comments, just which Might be the best venue?
I like the legend regency auction myself, great full color catalog/descriptions, boutique style with nice coins as a whole in the sale. Great customer base, and after all said and done, a nice catalog with the customers coins shown he can keep and remember. Also, some of the coins are quite scarce and extremely nice and don't come to market too often and good full descriptions might be best for those. However the standard buyers percentage is 17.5% (which comes out of the sellers pocket)
Now GC, great company. large following, over the past few years they have taken in serious major consignments , and prices realized were as strong as any thing I have seen at the three big firms. Good photo's, and close ups, but they dont have descriptions per say, its kind of bidding based on your perception. Turn around time is a little faster, but more importantly, buyers premium is only 10%, so lets face it, that comes out of the sellers dough. so 7 1/2 percent gained is a decent amount of money on this consignment.
so now to general questions: is now the best time to sell: seems some of the big players are selling at both firms, some well respected folks on this forum as well at both firms. With shows closed, seems like fresh stuff is kicking but in auction. (and these are pratically all fresh by the way)
Customer X does not really need the funds (im sure he could use them) but not a must sell from that standpoint. Could be a medical issue, was not willing to pry there. I do know, its a situation where all or none, doesn't want to keep anything if he sells.
I do know he mentioned about proceeds delaying till 2021 tax year, but at this point in time in the year, that really isn't an issue.
last question, most are cac, some may upgrade, but in a situation where an upgrade would then not get the sticker possibly, is it best left alone and sold that way?
any comments appreciated!
Comments
At that level, I would lean toward Legend...also remember at that level, commissions are negotiable. So the sales presentation and existing buyer relationships may add weight to the Legend side of the scale.
The only one who knows whether now is the best time to sell, is Mr. Hindsight. And he won’t be able to opine until after the coins have been sold and lots of time has passed.
Regarding CAC coins which might upgrade, but then not sticker - it depends upon the coin, the value spread between the current grade and next grade up and the chances of stickering at the new, higher grade. While there are plenty of exceptions, I believe that more times than not, you’re better off with a higher grade. And that’s even without considering the chances of the added value of a sticker at that higher grade.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I don't think the BP is a major issue, since most bidders are smart enough to back the BP out of their bids.
FWIW, between the two companies, I would lean towards Legend if the coins look like the type of coins that Laura would stock. Otherwise, I would lean towards GC.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Legend has nice descriptions and will tell you when they think a coin is undergraded.
I think a call is in order to the 2 other auction houses personally. Coins of that value might net you a sales commission closer to Great Collections.
IMO auction is not the best venue. A few reasons. Especially now, there are plenty of dealers who are starving for nice fresh coins where I think they would give you favorable terms to sell them for you privately. There are several guys/gals you could go to with a collection like that who could market it to get you favorable prices without waiting for the right auction then weeks after that for payment. They can also advise on upgrades as well if you ask as well as the auction houses. I certainly do not advocate marketing the coins themselves but a good dealer is a better choice.
For six figures, it’s easy to get hammer + 7.5% so the two venues are equal cost. I tend to agree with Andy - that’s a good criteria for a decision
As one who occasionally resubmits CAC’d coins for Reconsideration, a few points to keep in mind:
1. Using the Reconsideration method instead of Regrade means that you keep the same cert number.
2. With the same cert number, if the increase in grade is only a “+”, CAC will automatically reapply the sticker, and it’s only $3.
3. Your question really applies to coins that get resubmitted that get an increase to at least the next whole grade number. In that case, before resubmitting, look at the value differential. Sometimes the increase in value is not that much, so in my opinion, the risk might be too great to avoid losing the cherished CAC sticker. However, for high end coins like Customer X has, that value differential is usually more than great enough to take the risk. Keep in mind the surface portion of the CAC evaluation is not an issue, since it previously had a CAC (and you can mention the previous CAC on your CAC submission form). So the real issue is if CAC will now agree that the coin that had a green sticker now is solid for that new higher whole grade number? As noted, the increase in value regardless could be good enough.
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
Or no commission at all.
Oh wait. At that level GC doesn't charge anything to the seller.
You missed the point - even though there is no commission to the seller at GC, as the OP correctly noted, most bidders back out their bid to the lower level to take into account the bp that has to be paid, As such, the seller is getting a smaller hammer price than they would have had there been no bp.
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
No commission to the seller is a bit misnomer.
There's 10% off the top which is money the seller doesn't get.
I'm surprised at your post! If anyone here knows how the auction crap works you should!
OK, please help to explain how the buyer knows how much to "back out their bid" ? Is it public knowledge as to whatever the percentage agreement was between the seller and the auction house?
What difference does that make? The bottom line is what the buyer is willing to pay!
The buyer doesn't need to know what the agreement with the seller is, just what hits the bank account. What the seller gets is independent of that.
When a consignor makes a deal with an auction house, they are negotiating for a portion of the buyer’s premium. The buyer’s premium itself does not change, because that has to do with the buyer.
Gobrecht's Engraved Mature Head Large Cent Model
https://www.instagram.com/rexrarities/?hl=en
Heritage...
Understand all that, but the OP was originally trying to choose between two auction houses with different buyer's premiums so how does it make it equally attractive to a buyer to be bidding in one venue rather than the other even if the seller and auction house have negotiated a deal that equalizes the premiums in fact when the buyer does not know this?
I'm still not sure what the issue is. Why does the buyer care about knowing what the seller's deal with the house is?
Whoa Nelly! Lots to think about here.
A single box of mostly CAC'd 5-figure coins is an auction company's dream. Very little work for lots of reward. Often they'll take a consignment of 200 coins with only 10 or 15 being of any real interest. They still have to catalog and photograph everything.
Very simply, I'd slow down and take a VERY careful look. "Little" decisions here can swing prices realized by tens of thousands of dollars.
I'd contact a consignment director for each of the big companies (Heritage, Stacks, Legend, and GC). I'd then work to obtain very specific terms. For a collection of that size, the consignor should realize more than hammer price. If you even think of accepting 100% of the hammer price with a zero seller fee you're being naive. I would think you should be able to negotiate 104-109% of hammer, depending on the venue and company (GC would be less, of course). The exact rate is very negotiable. Terms to discuss include payment date, regrading & re-stickering fees, auction date, auction venue, reserves, seller buy-back options, etc. Tell them you're getting quotes from more than one source. Go with the one that makes the most sense to you and your customer. Present the information and let the customer make the final call.
For a single coin, a small-value consignment, or a huge quantity of widgets the answer would be entirely different.
As for timing, nobody knows. One school of thought says auctions are hot right now since shows aren't happening. Another says it's a terrible idea to auction valuable coins if there isn't an easy way for lots of eyes to do lot viewing prior to auction. Your buyer might end up elated or disappointed and there's no way to know until the check is cut.
From a bidder’s point of view, the buyer premium shouldn’t make any difference.
For example, let’s say that you’re willing to bid a maximum of $600 on a particular coin...
Auction house A has no buyer’s premium and auction house B has a 20% buyer’s premium.
So you bid $600 hammer if you’re bidding in a sale conducted by auction house A and you bid $500 hammer if you’re bidding in an auction conducted by auction house B. In each case, your maximum bid ends up being $600.
The particulars of the agreement between the consignor and the auction house should have no bearing on the bidders.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
They are talking about the Buyer's Premium which is known and posted.
That is not the issue. It is what percentage of hammer price that the consignor ends up with.
Take a $10k coin at GC. The BP is 10%, so the consignor gets $9.1k if the buyer backed off his bid to pay $10 k total
At Legends, if the BP is 17.5% so the Buyer bids $8500 to pay a total of $10k. But if the buyer is getting hammer + 7.5% then the Consignor gets $9.1k.
So the cost to the consignor is the same at both houses for the SAME hammer price. The issue then becomes who is more likely to get a higher hammer price.
No one said that it was equally attractive to a buyer based on consignor cost. Attractiveness to the buyer was based on other things: placement, advertising, description, photographs, etc.
@BryceM , @MFeld , and @jmlanzaf - You’ve each made VERY clear and valuable points!
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
I prefer GC as auc house.
In general coins can bring (if solid for the grade) around CDN Bid and CAC coins around the CDN CAC Bid for the particular grade. Then auc house juice subtracted. However big ticket coins can vary depending on number of rich collectors bidding and how bad they want it. YMMV. Wait for shows cone back online?
Auction prices can be very unpredictable. Whether a coin will upgrade or get a sticker is based on the coin. What makes you believe some will upgrade? Send them in....
Perhaps you would be better selling to a dealer vs auction house. Many coins I buy from auc houses I get them below bid (avg about 85 pct bid - as market stalled / down slide). Then consignor gets less than that after the juice. Consequently Knowing that and considering current market conditions not much of buyer over 80 pct bid.
Liquidating all that at once seems scary, a hit or miss. Many do not bid high on coins with dark toning or spots CAC or not. Are these attractive PQ coins? The auc success of big ticket coins can be influenced by confidence level stock market. One big coin investor known for years laughs at coins as investment if Stock market doing well but if stock market sputtering...In general “why would I want pay 50,000 for a coin in this coin market when dividends on stocks will finance.....(boat, entertainment, etc) “show me where coins have doubled recently” he said to a collector (laughter) unrealistic on what coins worth. “my best offer 85 pct CDN bid as can’t get much above bid on this stuff plus market (lol loudly) not exactly going up 10 pct a week like real bull market. You want more? Well your no fun, get outta here.” on coins he’s making offer on. Buyers can be fussy.
Responses have been instructive. When all is said and done it sounds like all agree that to the buyer it is going to be more attractive to bid in the auction that has the lowest buyer's premium period.
Given that fact it would seem there would be at least some incentive for auction house A to lower its buyer's fee to match auction house B's buyers fee on lots that it wants to acquire in the same way it is agreeable to lower the seller's fee on such lots. Is this ever done to stay competitive?
With Covid-19 cases increasing and the possibility of new lockdowns higher priced coins might be adversely affected. Eric Garcetti (LA mayor) was talking about the possibility of new lockdowns and stay at home mandates yesterday on TV.
GC might be your best option. Send tomorrow, sell in two weeks, and get a check a few weeks later.
I don’t think this is being said or agreed upon at all. To the buyer, it makes no difference what the buyer’s premium is. A lower buyer’s premium is no more attractive to the buyer than a high one, if the total amount paid is the same. Buyer’s premiums are not lowered or changed on individual lots; this is not something that is negotiable, and it doesn’t make sense. If you want to pay a lower total amount for the item you’re bidding on, just bid lower.
The seller’s fee is entirely different from the buyer’s premium. Some auction houses charge one and some don’t. It’s an additional fee paid by the consignor that is not included in the total price realized at all. If the seller’s fee is 10% and the buyer’s premium 20%, and an item realizes $1000 hammer, the buyer pays $1200 and the consignor received $900 of that $1200.
Once again, the buyer’s premium is negotiable on the part of the consignor, not the buyer. And that does not mean the buyer’s premium changes at all. The amount paid by the buyer stays the same. If the buyer’s premium is 20% and an item realizes $1000 hammer, the total due is $1200. If the consignor negotiates -10% off the buyer’s premium from the lots he or she consigned, the total due is still $1200 on the part of the buyer - only instead of receiving $1000 of that $1200, the consignor will receive $1100. This is entirely irrelevant to the buyer.
Gobrecht's Engraved Mature Head Large Cent Model
https://www.instagram.com/rexrarities/?hl=en
The discussion has gotten very muddled and gone in strange directions. There are only two things to consider when addressing the original question of what the most profitable route would be: what auction house has the least fees (including negotiations made), and which auction house will get the highest TOTAL price (hammer + bp) for the items? Since the OP already the various auction house fees figured out (and any negotiations are his to make), the only question left is which auction house (if there is a real difference) will achieve the highest TOTAL price for his specific items, if he chooses to go the auction route. Anything else is not relevant.
Gobrecht's Engraved Mature Head Large Cent Model
https://www.instagram.com/rexrarities/?hl=en
I don’t agree. As I stated in my previous post, the amount of the buyer’s premium should be of no concern to bidders. All they need do is adjust the amount if their hammer bids, to take the buyer’s premium into account.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
It seem some people are able to adjust their bidding to the BP and others are not. For those that can, the venue doesn't matter. For those that cannot, it does matter.
I'm still not sure why major auction houses don't move to having buyers simply bid the purchase price and have the BP backed out of it in accounting. Is it just tradition and inertia at this point?
Everyone should be able to adjust their bids - it’s pretty easy. Regarding the auction houses backing out the BP - I’m guessing that could be done for on-line bids but that it would be problematic for live floor bids.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I actually don't think it's that easy for most people in a live bidding situation. Just take half a second to think what's 117.5% of $7600 and then adjust it every few seconds as the bid increment changes.
I don't think it would be that difficult to change floor bids. Bid increments would need to move to final price but that may be the only change in a live bidding scenario.
I'd vote for GC with no reserve...in my experience once a person has made the decision to sell they want the job done and check in hand as quickly as possible...no coins left unsold and to be dealt with etc....plus a turnkey deal in terms of submissions for re-grading, CAC etc....to me the 10% commission difference can be made up by negotiating and in the prices realized...since you said the seller doesn't need the money whether he/she receives $250K or $280K is probably less of an issue than you might think...perhaps the auction house can wait until 2021 to distribute the funds for tax purpose?? (not sure the tax rules here)
Would be great to see the coins
Only buyer's who can't do math prefer the lowest Buyer's Premium. Costs me the same in all venues, no matter what the BP is because I just back out my bid.
When you have a low cost auction house, you also get fewer services like advertising. If you have $100k coin, do you want to put it in an internet only auction with no live preview that is ending on a random weekend or put it into a major auction at a major show with advertising, glossy catalogs and an in-person preview?
There is no single right answer. If you have tokens, Stack's gets waaaay more money than GC would ever get. If you have common date MS65 Morgan's, Stack's probably doesn't even want them and they won't get enough additional hammer to justify the costs.
Typically, you round to 20% and the math is pretty easy.
That's inaccurate, and it would be easier to not have to do it every few seconds
Seems like you're making the case that 17.5% is hard to calculate
LOL. True. But, again, for anyone fairly numerate, it's not that hard unless you are jumping bids. If you are on $100 bid increment, you just add $120 to your previous bid. I'm sure some people find it challenging, but it would save you a ton of money to be able to do it. And, you can't blame the auction houses for the sales tax which you'd also have to consider
It seems like an old school thing to do. Why not just modernize and join the 21st century
@Zoins , from my understanding, the "smart" way to bid on a coin in auction is as follows:
1. Keep emotion out of it!!!!
2. Do your pricing research in advance, and determine the maximum you are willing to pay, INCLUDING the BP.
3. If the BP is 17.5%, since you're doing this in advance, just take a calculator and divide the price you're willing to pay by 1.175. That will probably not come out to an even increment, so decide in advance, and adjust, up or down (YOUR preference) to the correct increment. For example, let's say you are willing to pay $1,000 INCLUDING the BP. Divide that by 1.175 (assuming you're talking about Legend Auctions), and you get $851.06 (to check your math, multiply $851.06 x 1.175%, and you'll ge $1,000). At that level the bidding increments are $25. As such, decide if you want your maximum bid to be $850 ($850 x 1.175 = $998.75 cost incl BP) or $875 ($875 x 1.175 = $1,028.13 incl BP). Your choice! GOOD NEWS -- you don't even have to do that math if it's too difficult - just initially enter a bid, and their software AUTOMATICALLY calculates the TOTAL price, incl the BP for you. if that's acceptible, press the next button to officially submit that maximum bid. Otherwise, change your hammer bid BEFORE finalizing to submit, and it will show you the new cost incl BP.
4. See #1.
5. See #1.
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
I never do pricing like #3, and only sometimes do #2, in advance. It doesn't seem that beneficial given how many things I watch and how unpredictable prices can be for my items. See this:
https://forums.collectors.com/discussion/1040922/zoom-zoom-were-going-to-the-moon#latest
@Zoins - Good luck! Yes, you ended up happy bidding "blind".
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
Interesting question, I would negotiate with the big three auction sites, sellers fess, placement, timing and marketing. who will do the best with all four. Marketing is a big factor. Sometimes during negotiation you find out who will do the best for the client.
It also depends upon the coins...for example if you have some really nice old gold then Doug Winter can probably move it a great price for a 10% consignment fee...you'll get a check within a week of the sale...the last few coins I consigned to him were sold within hours of his early bird email going out...no hassle in terms of collecting payment or shipment...guaranteed fast payment...and probably a higher price in much less time than I could have ever sold it for on my own...
With SB, HA, and Legend with a mid six figure collection as a seller I would expect to get a minimum of hammer + 108%. Don’t think GC will negotiate fees. Keep in mind that the buyers premium is being paid by the seller. The higher the BP the less buyers will bid and the less money the seller nets even if he’s getting part of the BP back. GC is the way to go if you’re concerned about the future of the market. It’s an easy, fast, effortless transaction. All you have to do is pack up your collection and send it to them and you should get a check from them in 4-6 weeks.
Legend, SB or HA, especially for such high end coins, GC does have a big following for faster liquidations.
Yes, this is ideal. In fact, I rarely bid live anymore unless I have emotions IN it!
I put my best number (shipping and BP figured ahead) into the proxy bid box and go on with my life. I have not been "surprised" by the price of an auction win in 20 years.