Check out Heritage's solution to internet bidders getting screwed. Bottom line: be on the floor

pharmer · March 26, 2007 2:49PM

For their April 16 Final Session of Dallas auction.

When I first read it and realized there is no online session where lots actually closed at staggered intervals and there was no floor bidding, I thought here we go, another push back against the internet and online bidding. Like B&M and especially ANR/Stacks, they can't manage to get an internet bid accepted by the human auctioneer even though their site shows the bid. (Why doesn't the auctioneer have a screen he can look at before the gavel comes down?) Going once, looks at screen, going twice, looks again at screen and audience, sold. Anyway, this is copied from Heritage's site:

Auction Type: Final Session Online bidding ends two hours prior to the opening of the live auction for that lot. Check the Time Remaining on individual lots for details. Your secret maximum will compete against those bids, but bids placed through Heritage will pay a lower Buyer's Premium (15% vs. 20%) and win all ties. To maximize your chances of winning, enter realistic secret maximum bids on our site. You can also place last minute bids directly with us by e-mailing Bid@HA.com or calling 1-866-835-3243. (Important note: Due to software and Internet latency, many bids placed through eBay Live do not register in time and eBay Live bidders often lose lots they would otherwise have won. Also, items won through eBay Live will result in a higher Buyer's Premium of 20%.)

"Hey Charley, how much you gonna bid on lot 377?"
"Dunno, but it don't matter, I'll just wait till after the internet bidding closes and see the bid I have to beat. This is such a good idea for us floor bidders!"

garsmith · March 26, 2007 3:19PM

Just bid what you're willing to pay if it gets away from you who cares there will most likely be another one next month!

19Lyds · March 26, 2007 3:27PM

Thats a good philosophy except that the floor bidder can say "Why Heck! I can go another buck on that!" Especially if the auctioneer states what the last bid is. There is no counter for the Internet bidder which is kind of a one way street.

I think the OP is also suggesting that the floor bidders get the win regardless of what the Internet bids might be. I believe that other have complained about this in the past and this is one reason I just don't bid any Internet/Floor auctions.

And the reality of an auction is, yes bid what you are willing to pay BUT that figure is based on the desire to have the coin and can fluctuate. If I bid a max of $100 because I really want the coin and then see the bidding go over $100, I have the option of upping my bid if I were a floor bidder. As an Internet bidder, I do not get the option.

Robgetty · March 26, 2007 8:32PM

I have never attended any live coin auction. Having said that, Heritage is my single largest source of the better coins in my collection.

I don't think that this is a case of screwing internet bidders. I think that this is a case of Heritage offering coin auctions that were designed for audiences at large coin shows, and that they are allowing people like me to participate. Yes, it would be nicer from my point of view to be able to bid in real time, but it would add an extra level of difficulty and it doesn't fit in to their current business model.

Can letting us bid in real time be done? Sure. Are they going to add that level of complexity? Probably not. Why should they? They are already on the top, and the only reason to make this change would be if the other auction houses significantly caught up to them and they determined that this issue was one of the reasons why that was happening.

RegistryCoin · March 27, 2007 12:19AM

<< They are already on the top, and the only reason to make this change would be if the other auction houses significantly caught up to them and they determined that this issue was one of the reasons why that was happening. >>

IMO, this isn't the only reason to make this change. Another, and greater reason to make this change would be for the auction house to make more money, really maximizing the potential of the auction lot. This would be possible and probable if they could actually bring the internet bidder's bid, in real time, to the floor.
Another advantage that could really make a difference in bringing the internet bidder to the floor would be the "cut bid", the one-time one-half increment bid.
I think that if the internet bidder's bid could be recognized on the floor in real time, and if the internet bidder had the availability of the "cut bid", it would be an overwhelming success for "the system" and a great benefit to internet bidders, consignors and the auction house that makes this possible.

Nysoto · March 27, 2007 1:01AM

The internet bidder can:

hire an experienced rep to evaluate the coin and bid @ 5% (the best solution)
reserve a phone line
simply bid their max on the internet before it closes

These have all worked for me. I always know my max, and do not get caught up in a bidding frenzy. There are some advantages for internet bidders - anonymity, and the next increment may be higher than the floor bidder will bid (if bid is $5000, is it worth another 10%, $5500?). The floor will always have the advantage of using the cut bid.

edit - a phone bidder can also use a cut bid, I believe

keets · March 27, 2007 1:54AM

i'm a bottom line guy and the bottom line here is simple: until they can "get it right" and guarantee that a bid placed in a manner other than live at the auction is recognized and afforded the same status as a live bid, these auction houses shouldn't even offer it.

end of arguement as i see it.

pharmer · March 27, 2007 2:08AM

Sorta what I'm getting at. They have two ways to approach it. Make the internet bidding work, which means if an internet bid gets in on the system, it gets recognized by the auctioneer. Or do like they have done here, paint a red target around the internet bids and let their floor bidders have the advantage even more so than they do now (when there is a higher internet bid yet due to the lag time as mentioned at the end of Heritage's paragraph it might as well not exist).

My guess is that the internet bidder pool is somewhat greater than the floor bidder pool for a given lot, so someday they will realize that their own financial well being will be served by instituting a working internet bidding mechanism. Until then, this type of "solution" will be presented, which does not help the internet bidders at all, no matter what they say. They are dancing around the problem instead of addressing it.

ebaytrader · March 27, 2007 2:11AM

<< Check out Heritage's solution to internet bidders getting screwed. Bottom line: be on the floor >>

Solves nothing. I've watched many a floor bidder get humped in a big way.

keets · March 27, 2007 2:19AM

a good compromise to avoid confusion with internet lag time might be a cutoff for internet bids at some point, say three prior lots to the beginning of a specific lots open. anything would be better than what they have now, where they essentially tell you your bid was recognized and that you've got the high bid and should be the winner, when neither of those things is true. from my recent experience with Stack's/ANR, i don't see why they can't simply put a 24 hour hold on everything till they sort out the different venues for bidding.

elwood · March 27, 2007 2:20AM

Are you talking about bidding via E-Bay Live or placing bids through Heritages web-site?

ziggy29 · March 27, 2007 2:24AM

<< Thats a good philosophy except that the floor bidder can say "Why Heck! I can go another buck on that!" Especially if the auctioneer states what the last bid is. There is no counter for the Internet bidder which is kind of a one way street. >>

Is this a problem if an Internet bidder bids their max?

For example, you decide to put out a max bid of $1500 on an item that was at $900. The previous high bidder's max is $1000, so now you have the high bid with the next increment over $1000 ($1050, I think?). The Internet bidding ends.

Now a floor bidder sees a current high bid of $1050. They bid to $1100. But that takes the new high bid to $1150 when (presumably) a representative for the high Internet bidder raises it. The floor bidders don't know where your max bid is at this point. It's not simply a matter of the floor bidder taking it up one increment unless the high Internet bidder chooses only to 'snipe' one increment higher just before the end of Internet bidding.

Yes, there are some advantages a floor bidding has in this regard as they can change their max 'on the fly' if circumstances warrant (of course, that's also a great way to overpay for a coin).

Am I missing something here?

[Edit to add: Plus, why do it on eBay when you can do it directly on the Heritage site? You save 5% on the buyer's fee and apparently have more protection against this scenario.]

TomB · March 27, 2007 2:32AM

This doesn't seem like a bad policy on the part of Heritage, as long as they are still working out how to bring internet bidders into the fold in real time.

There were two statements made that I am either interpreting incorrectly, which is entirely possible, or that might have slightly missed the point. These are as follows-

<< "Hey Charley, how much you gonna bid on lot 377?"
"Dunno, but it don't matter, I'll just wait till after the internet bidding closes and see the bid I have to beat. This is such a good idea for us floor bidders!" >>

If you are the high internet bidder at some level, let's say $500, but your maximum bid is actually $2,000 then you will still be bidding against others when the floor bids open up at $500. Therefore, the floor bidders have no clue that your maximum bid is $2,000 and if they attempt to beat your showing bid of $500 they will have to continue to bid against your previously placed internet proxy until they are above your $2,000 maximum. The second comment was-

<< Thats a good philosophy except that the floor bidder can say "Why Heck! I can go another buck on that!" Especially if the auctioneer states what the last bid is. There is no counter for the Internet bidder which is kind of a one way street. >>

Heritage bidding, and other live auction house bidding, does not typically work around the idea of bidding in such small increments. As a floor bidder you would have to either bid a full bid increment to move the lot higher or you would have the luxury, typically, of one cut bid. The cut bid is an increment that is one-half the standard increment and does not have to be recognized by the auctioneer. Regardless, I do not know if any auctioneer would allow a bidder to re-enter the bidding on a specific lot if his cut bid did not win the lot.

I can empathize with the auctioneer on this point since the lots move quickly and if anyone has never been to a live auction they might be quite surprised at the rapid nature of the work.

pharmer · March 27, 2007 2:58AM

Do you bid on Heritage's lot via the internet? When was the last time you did so? Just want to know if you have experience dealing with this problem.

Elcontador · March 27, 2007 3:13AM

Never had a problem with Heritage not recognizing my bid, though ANR / Stacks dropped the ball once.
And yes, I did win a lot from Heritage below my max bid and this was via the internet.

Here's what I do, and recommend you do the same.

1) Establish a working relationship with someone at Heritage
2) Have a dealer whom you trust lot view for you (if I get the lot, my rep gets 5% of hammer)
3) If both of them like a particular coin, I know it would fit nicely in my collection
4) Decide whether you or your rep will do the bidding. If you rep is a floor bidder, you either get the coin or you don't get it.
5) If you're bidding & not able to be a floor bidder, put in an honest max bid.
6) If you really want the coin & it's over a certain amount, a Heritage rep will call you and yes, you can do a cut bid over the phone.

TomB · March 27, 2007 3:46AM

I'm not certain who the recent set of questions are addressed to, but will respond with my experience. I have bid on many Heritage lots via internet and have also been present at quite a few of their auctions. I have won lots as the internet bidder against live bidders, have won lots as an in-house bidder and have been outbid as an internet bidder and an in-house bidder. I've even had someone cut-bid me for a lot and then won the lot anyway because I bid another increment and they were not allowed to re-enter bidding on the lot. The one common thing about all of these experiences is that I have never had a problem with bid acceptance or implementation. Perhaps I have simply been lucky, but I have never had an internet bidding problem with Stack's/ANR or Goldbergs, either. The last internet bid I have placed was in January of this year. However, the one venue I have never bid through is the ebay affiliated system since this makes no sense whatsoever, in my opinion, and I will not pay the higher premium nor will I endanger the execution of my bid.

flaminio · March 27, 2007 3:50AM

You guys are all much bigger players than I am. I just toss a bid up on Heritage's web site, and if it wins, yippee, if it loses, drat, and then I move on.

RegistryCoin · March 27, 2007 5:15AM

I have heard that, in at least some cases, when a lot goes to the floor, the high internet bid is disclosed up front. Is this your experience? I guess, for the sake of saving time, this makes some sense to the auction house, as it gets all the unnecessary underbids out of the way, and directly to to the number to be beat.

ziggy29 · March 27, 2007 5:20AM

<< I have heard that, in at least some cases, when a lot goes to the floor, the high internet bid is disclosed up front. Is this your experience? I guess, for the sake of saving time, this makes some sense to the auction house, as it gets all the unnecessary underbids out of the way, and directly to to the number to be beat. >>

Wouldn't that be a disservice to the consignor?

Let's say the high Internet bid is $500 but there is an underlying $1000 max on it.

If a floor bidder is willing to bid $800 on this coin, they will bid until they reach $800 and then the Internet bid gets the coin for one increment above $800.

If you say the Internet bidder's max is $1000 up front, the floor bidder may not bother to bid at all, and the coin sells for $500.

I'd be hopping mad as a consignor if this happened to me.

keets · March 27, 2007 5:27AM

i have attended auctions which have mail bids. the auctioneer typically starts at a price which has been pre-determined, accepts a bid(s) from the floor/phone as long as they come and then raises it according to whatever the mail bid(s) might be, going higher until the mail bids are surpassed or the floor/phone bids stop. that gives the high bidder the lot and the consignerthe highest true price.

why couldn't that be done with internet bids instead of disclosing an amount??

mrpotatoheadd · March 27, 2007 5:39AM

<< I have heard that, in at least some cases, when a lot goes to the floor, the high internet bid is disclosed up front. Is this your experience? >>

I don't remember which auction it was, but the last live one I attended started the bidding at one bid increment over the second-place mail bidder's high bid.

TomB · March 27, 2007 5:49AM

<< I have heard that, in at least some cases, when a lot goes to the floor, the high internet bid is disclosed up front. Is this your experience? I guess, for the sake of saving time, this makes some sense to the auction house, as it gets all the unnecessary underbids out of the way, and directly to to the number to be beat. >>

The highest internet bid is disclosed, but not the highest maximum that someone has bid over the net. In other words, if the internet bidding tops out at $500 then the floor bidding would start at that level. However, if the internet bidder who is holding the $500 bid has a maximum proxy bid of $2,000 then that $2,000 bid is not exposed to the floor.

RegistryCoin · March 27, 2007 5:51AM

I see. Thanks Tom!

Check out Heritage's solution to internet bidders getting screwed. Bottom line: be on the floor

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