Why don't auction houses break up lots?

interchanges · August 9, 2003 10:54AM

I would kill to bid on some induvidual lots, like if Sportscards Plus broke up that set of E95's.
And Mastro also sells N28's and N29's in group lots as well.
I cannot understand why dealers/sellers would want to keep the group together, when it would be obvious they would gain (financially) (that's the point, right?) by breaking up the cards, especially when each card exceeds $500. at least.

Why?

qualitycards · August 9, 2003 11:18AM

IC - I've often thought about that too! Mastro & his consignor wouldda made a ton more $ on the complete 1952 Topps PSA set. We all may have bid on a card here or there but how many had funds to bid on the entire set? I guess it just sounds better that they sold 1 lot for 6 figures then 300 lots for 6 figures....jay

murcerfan · August 9, 2003 12:13PM

I know mastro has a theory that the 10% increments on big lots actually help them get more.
when each bump is 1,000 smackers, even a few exuberant bids means more profit.
i also believe some of the houses that were traditionally "dealer only" like to keep out the riff-raff.
Some consignors also can't stand to see a really nice set broken apart.

mcastaldi · August 9, 2003 12:18PM

Jay> I think if the auction house is really doing their job, they talk to their consignors before the auctions run and listen to what they want to get out of the auction - and then list the item(s) accordingly. Is it something they don't wish to part with for less than a certain amount? If so, then they'd want to keep the group together. Do they want to maximize revenue? Well, then they'd probably want to break into lots of some sort.

I know if I'm paying a 15% seller's fee, then I'd darned sure want the auction house to take a few minutes and discuss my options with me so I could get what I feel is the most out of my auction. In short, they should earn their seller's fee!

Mike

norty · August 9, 2003 2:07PM

Unless it is a lot of great value or scarcity, you as a consignor have little input on the major auction houses approach to their selling of your lot.

Regarding breaking lots, it costs a fortune to put out those catalogues. They want big ticket items and the more the merrier in them. It takes up a lot of space to put individual cards from a set the size of the 52's for example as individual lots. If those cards take the place of other lots of greater value, it is a waste of their space. If they don't, their catalogue would look like the New York City phone directory.

Buckwheat · August 9, 2003 3:13PM

Well said, Norty. I never quite understood why Superior always has all of these small lots of 50 to $100 cards. Just the listing, catalogue space, billing and telephone bidding must add tremendously to overhead.

I was very surprised that at the live auction, they had lots of small lots. It made the auction go on forever, and probably cost them some bids by being so late.

mrc32 · August 9, 2003 11:59PM

Wasn't there an auction just a few months ago that had some really super 1961 Topps cards. They were selling them individually and word was the auction was a huge success (Superior?). I agree with the posters. There are a lot of lots I would love to see broken up and sold individually. Maybe more people will go out on a limb like Superior.

Buckwheat · August 10, 2003 1:48AM

<< <i>Wasn't there an auction just a few months ago that had some really super 1961 Topps cards. They were selling them individually and word was the auction was a huge success (Superior?). >>

That depends on how you define "huge success". They were all PSA 9 cards, and sold for more than SMR. So in that sense, it was a success. The over 300 lots added to the phone crunch at the end of the auction, and resulted in a lot of bidders not being able to get bids in on these or other lots. There was a thread, shortly after the auction ended, about the busy phone lines and people not being able to put in a last minute bid.

I am sure that Superior spent a fortune promoting and selling these cards, but ultimately, they brought less than they would have on Ebay. (Which was fine by me, since I picked up quite a few of them).

It would be pure speculation to say whether they would have brought more or less in a combined auction, but it certainly would have had less overhead associated with it. Also, the seller knew who most of the buyers would be, and perhaps could have realized more had he tried to sell them privately. Or even, Superior could have tried to place them privately.

We are just learning what are the successful ways to market a large lot of Graded cards. In my opinion, the jury is still out.

Basilone · August 10, 2003 2:12AM

Im not sure if anyone has mentioned this but in the Superior 2002 Winter Wonderland Auction...they had 294 seperate lots for Skylaneflyer's 1967 set. Results (most believe) were below expectations.

John

mercurynut · August 10, 2003 2:36AM

They don't want amy leftover "stuff" around so its easier to sell in lots.

interchanges · August 10, 2003 6:02AM

I guess the way I see it is if you're selling a broken up set of 1955 Topps cards (with minimum bids at $35.00 for commons) you can break up a set of E95's which is only 25 cards.

So the big time dealers are essentially catering to the high rollers, which still doesn't make sense.
The E95 set is at $23,000 right now. Significantly restricting the bidding to the big shots. Alot more of the bidding public would be able to pick up one or two of these cards and go all out.(especially us type collectors)
I realize I'm repeating myself I just don't see the cost of the catalogue infringing that much when their goal is to make as much money as possible.
I don't think there would be any leftover stuff with the type of cards we're talking about.

Mantlefan · August 10, 2003 7:18AM

Actually, if you can afford it, the bigger lots can work to your advantage. I've been able to turn over the unwanted cards on EBAY at a profit, keeping the cards I really needed almost for free.

dude · August 11, 2003 12:29AM

I learned a lot about "brokers" when I sold my first house. When I was considering putting my house up for sale, my neighbor across the street warned me how most real estate agents operate. He said that they know pretty much exactly what the market is based on the history of recent sales. They will give you a recommended listing price and tell you that this is the best you could hope for. The reality is that they are recommending a price about 5% below market price. The reason they do this is that difference on making a 6% commission between a $95,000 and a $100,000 house is only $300. They may only have to show your $95,000 house to 5 people before it sells, but show your $100,000 house to 25 people before it sells. Are those 20 extra viewings worth $300 to an agent? Most likely not, unless he's really hurting for business. In my case, under the strong recommendation of my neighbor, I decided to ask 7% over market price and it made my agent mad, but the house sold 3 week after it was on the market (by another agent, so my agent only got a 3% commission).

How does this relate to auction houses? I'm sure they know that they can make more by breaking up a set. The problem is that they will have to spend about an extra 80-100 hours for scanning, writing a description for each item and mailing those cards as individual lots plus extra expenses for printing and webspace. If all the cards combined sell for 20% more than the single lot and they only get 30% of that (15% on buyer's fees and 15% on seller's fees) it works out for them as a 6% increase in profits for all that work. On a $30,000 set that's only $1800 extra profits that the auction takes in for 100 extra hours of work and perhaps an extra $1000 in catalogue expenses. That's not worth it for any of the auction houses.

That's why when you sell a set that should go for over $10,000 or definitely over $15,000 as a whole set, you should probably sell it yourself on eBay as individual lots or have someone else sell it for you as individual lots on eBay. I've broken up several sets that were my own or I sold on consignment for others on eBay and did great. When a single item goes for sale over $10,000 or definitely over $15,000, the number of people who can afford that becomes very limited.

Wayne8348 · August 11, 2003 9:02AM

Dan,

I kind of take offense at your comparison between realtors and auction houses. I believe it's wrong to ever take an entire profession and generalize them into a single group that is entirely out for themselves only and not the customers best interest. I've been selling real estate for 16 years and take great pride in putting my clients interest first in every transaction. By doing this I hope to earn their respect, referrals, and ultimately their repeat business. I don't doubt that there are many agents who may operate this way but I don't believe it's an entire profession.

Likewise I'm sure that some auction houses only have their best interest at heart but I would be surprised if that was everyone. An unhappy consignor is a huge expense to any auction house. How long did it take for word to travel around about Superiors failure to realize but approximately 65% of smr in their large lots they sold in the last auction or on the other hand their huge success in selling the 1965 psa 9 (1/1's) for about $450 apiece. While I would be afraid to consign a large lot because of this, I would gladly consign extremely low pop cards to them in high grade to auction off. It seems that complete sets sell well at auction, partial sets dont, and low pop commons sell extremely well.

Sorry about your experience with your broker. I hope you don't hold that against everyone.

Wayne

interchanges · August 11, 2003 12:18PM

Nonetheless, a very candid description that makes good sense.

Thanks Dude.

Murcer, I see your point as well. Send me some Dandees and I'll give you a mystery card in a purple sack.

(I still woulda broke up that set of E95's though)

murcerfan · August 11, 2003 2:38PM

Actually that is an excellent point about the Ginter sets in light of the fact (as i seem to recall) that SCP has the same sets, in like plastic, coming up later this week. maybe we should put together another one of our syndicates and buy both of them.

TheCARDKid · August 11, 2003 8:49PM

From a business point of view, it is usually better for the big auction houses to sell high status complete sets. Especially something with alot of cachet like the '52 Topps set with Mastro.

Expensive sets reinforce the auction house's high end image. Being able to say they sold the '52 Topps set for $200+ k is very valuable for them. Not all sets have this kind of prestige and glamour though.

As Dan alluded to, it is probably not worth their trouble to break up huge 600+ card sets only to see a small increase in revenue vs the time and expense to break it up.

Ruthfan · August 11, 2003 11:56PM

I know I wish Mastro's would have broken up the lots that I consigned in the Millennium Auction in November 1999.

I consigned several different pieces with Mastro Sports Auctions. One was lot # 907 which was a huge collection of 1939 Playball cards with over 450 cards in the lot. There were three complete low number sets and fell just 11 cards short of a 4th complete set. There were four Ted Williams rookies (1 graded PSA 8, 1 PSA 7 and 2 PSA 6's). There were four different Joe Dimaggio cards (3 PSA 7's and one PSA 6). There were a total of 22 PSA graded cards in the lot with an SMR value of apprx $20,000. The rest of the graded cards were in PSA 8 holders. There were also 170 cards that were raw, but that were in NM or better condition.

The lot ended up selling for $22,000. I don't know if the low figure was due to them not breaking the lot up or that because the Barry Halper auction had just taken place the month before. I do know that the winner of this lot took the PSA 8 Ted Williams and put it on Ebay the very next week after the auction and it sold alone for $9,600.

I figure that if the lot was pieced out it would have brought $28,000 to $30,000.

Todd

dude · August 12, 2003 12:35AM

Wayne,

You are right. I shouldn't have painted a sweeping generalization of realtors based on that incident and I apologize. I guess the point I was trying to make is that there is a point of diminshing returns on the amount of time, money and energy expended versus the amount of revenue it generates.

Wayne8348 · August 12, 2003 7:51AM

Dan,

I mostly agreed with the point - the example just hit pretty close to home. No problem at all.

Wayne

Why don't auction houses break up lots?

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