Do unreserved coins bring higher prices?

MrEureka · January 25, 2009 5:21AM

Most of us think that unreserved coins are a good thing because they give us a shot to buy the coins for less.

But I'm wondering if unreserved auctions actually make the coins more expensive. That seems to be the obvious case on eBay, and maybe even on Heritage. (I mention Heritage and not the others because reserves are more transparent at Heritage.)

What do you think?

Longacre · January 25, 2009 5:25AM

Unreserved coins give the buyer a psychological boost with thinking that he bought the coin at a price he was willing to pay. On a reserved coin, in contrast, the reserve effectively represents what the consignor "would be happy with", and anything above that reserve is gravy. For the purchaser in a reserved auction, paying even $1 over the reserve price gives the winner a sense that he paid too much.

RWB · January 25, 2009 5:25AM

Just a speculation:

Unreserved coins at auction might attract more bidders looking for bargains. Some of these get caught up in the bidding and end up paying more for the coin. Since there would be fewer bidders for a reserved coin, it would seem to limit competition for a coin.

Coxe · January 25, 2009 5:30AM

Sometimes. I have lost bundles of bucks both selling unreserved coins in public auctions and in buying back reserved lots. There is no magic universal answer unfortunately.

roadrunner · January 25, 2009 5:32AM

It's clear to me that the auction houses seem to believe or at least state that they feel unreserved coins lend themselves more easily for bidders to form attachments to....and hence they are more likely to hang in, bid higher, and refuse to let go if someone else is in competition. If the reserve is high enough where bidders don't even get interested and just toss in the towel, no such bond can be formed. While I can understand that logic, I think it still comes down to the quality of the coin and having at least 2-3 people who see it in it's most positive light to generate a strong price. It should be comforting to know that your aren't bidding against a high reserve set by a sharp consignor who knows and has tried (and failed) at every possible angle on the coin being sold.

The fact that unreserved coins tend to be the case in larger, neater, fresher, and basically old time collections might be what leads one to believe that they bring better prices. Meanwhile stale and over-tried coins with tight reserves tend to fall short even if the coins are nice.

I vote YES for unreserved coins bringing more, in the majority of the cases. Whether it's 60-40, or 65-35, or 70-30, who knows. If a few of the bidders decide to collude on the coin in quesiton it could sell for a lot less than where a conservative reserve would have been set.

roadrunner

CoinJunkie · January 25, 2009 5:32AM

In a slowing market, I would tend to doubt it.

sonoranmonsoon · January 25, 2009 5:36AM

On high end rare coins, I do not think a reserve makes any difference. Those coins will always get bid up to the current market value (whatever that may be at the time).

Common widgets that are in great supply, can be ussually be picked up cheaper in a no reserve situation, than in a reserve auction or bin listing on ebay. Reserves on ebay are ussually higher than most unreserved listings sell for. Of course it depends on how reasonable the reserve is. At least that has been my experience.

GoldenEyeNumismatics · January 25, 2009 5:37AM

On eBay, the answer is absolutely yes.

CoinJunkie · January 25, 2009 5:40AM

<< On eBay, the answer is absolutely yes. >>

That's absolutely not true.

notwilight · January 25, 2009 5:43AM

<< 

<< On eBay, the answer is absolutely yes. >>

That's absolutely not true. >>

I absolutely disagree. respectfully.

Edscoin · January 25, 2009 5:48AM

I see a lot of coins on EBay with reserves that end with no bids or only one bid of the .99 cent starting price.

Lakesammman · January 25, 2009 5:50AM

Too many variable to know - if it was a simple relationship, everyone would do it.

Depends on the coin, the series, the current market conditions, the potted plant in the back, bribes, trades/swaps of favors, partnering, etc.

mrpotatoheadd · January 25, 2009 6:01AM

I ignore the presence (or absence) reserves when I'm bidding. Either I buy the coin for a price I was willing to pay or someone else buys it. Whether that "someone else" is the owner of the coin (through a "not met" reserve) or another bidder (through a higher bid than mine) is irrelevant.

IMO, making financial decisions based on emotion ("I *hate* reserves", for example) is counterproductive.

ColonialCoinUnion · January 25, 2009 6:06AM

All things being equal, an unreserved coin will garner more attention from dealers, and also more attention from people who absolutely refuse to bid in reserved auctions.

So, I would have to conclude that, on average, greater participation will lead to higher prices.

sinin1 · January 25, 2009 6:09AM

depends on the number of interested bidders and how high the bid starts or reserve is

Mercury10c · January 25, 2009 6:24AM

I have had better results on Ebay with no reserve and low starting price-like 99 cents or something like that.

GoldenEyeNumismatics · January 25, 2009 10:52AM

<< 

<< On eBay, the answer is absolutely yes. >>

That's absolutely not true. >>

I've been selling coins on eBay for 5 years, ranging from 1963 proof sets to $5k scarcities. My experience has been that unreserved coins always bring more.

CoinJunkie · January 25, 2009 11:06AM

<< 

<< 

<< On eBay, the answer is absolutely yes. >>

That's absolutely not true. >>

I've been selling coins on eBay for 5 years, ranging from 1963 proof sets to $5k scarcities. My experience has been that unreserved coins always bring more. >>

I've been selling on eBay since 1999, and unreserved lots do not always bring more.
I was disputing the absolute nature of your declaration.

rbf · January 25, 2009 11:58AM

As a buyer, I generally try to avoid "reserve" style auctions altogether -- they usually end up being a waste of my time. 9 times out 10, the seller's reserve price is WAY too high compared to what I'm willing to pay. As a seller, I think setting a reserve price on eBay is a total waste of money -- you're much better off to do a B.I.N. w/ "Best Offer."

segoja · January 25, 2009 12:16PM

Depends on the coin and the strength of the market.

Recently no reserve coins at Heritage, E-Bay and TT have been blood baths.

Example - 90 No S cent PCGS 68DCAM (No Problems) sold for $5000, 1937 Buffalo Nickel PCGS PR66 (Ex Pinnacle) Sold for $1200. These are levels about 2 grades below the actual grade. I've had no runaway coin that sold without reserve.

My reserve coins either didn't sell or at least garnered what I wanted.

RedTiger · January 25, 2009 12:45PM

<< 

<< 

<< On eBay, the answer is absolutely yes. >>

That's absolutely not true. >>

I've been selling coins on eBay for 5 years, ranging from 1963 proof sets to $5k scarcities. My experience has been that unreserved coins always bring more. >>

I find this to be a curious statement considering this other recent thread that you started

other thread
where you say the following:

>>

<< I'm done selling on eBay in the true auction style ...

So I'm going to try the format Anaconda used to use... retailing with BINs and Make-an-Offer type set-ups, but I doubt I'll do well. Ebay remains a great outlet to sell coins (and I'll ALWAYS stand by that), but I can't get it to work for me anymore, or at least the way I used to. The coin market is falling, and it's tough for the little guy to keep up. >>

Clarification is appreciated. Maybe you mean, past tense, "unreserved coins, used to bring more on Ebay."

Unknown · January 25, 2009 12:58PM

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ColonialCoinUnion · January 25, 2009 1:02PM

<< So tell me this, a consignor has a great coin at an auction at no reserve, do you think for a minute he or the auction house is going to let it go for a song. >>

I suppose an individual consignor could try to protect one coin, but what about 500 in a single auction?

There were 10s of thousands of coins in the January sales, could an auction house really make sure that none of those sold for "too little"?

mozin · January 25, 2009 1:05PM

Reserve auctions can often snag a bidder that does not know what is the current pricing. No reserves auctions simply show current value of the coin.

Unknown · January 25, 2009 2:21PM

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mrpotatoheadd · January 25, 2009 2:43PM

<< I've been selling coins on eBay for 5 years, ranging from 1963 proof sets to $5k scarcities. My experience has been that unreserved coins always bring more.

.....

As a buyer, I generally try to avoid "reserve" style auctions altogether -- they usually end up being a waste of my time. 9 times out 10, the seller's reserve price is WAY too high compared to what I'm willing to pay. >>

Well, either unreserved coins are more expensive than reserved ones or they're not.

I guess that's settled.

abitofthisabitofthat · January 25, 2009 9:18PM

Very timely post. I have just been planning an experiment to answer this question for myself, at least on ebay. For two weeks, I am going to list 10 coins on ebay each week. Similar coins. The first week with reserves, the second week with no reserves, and compare my results.

The 10 representative coins that I will be going with each week are:
Turban Half Cent
Braided Hair Large Cent
Indian cent
Two Cent
Trime
Bust Dime
Lib Seated Quarter
LS Half
Barber Half

Obvoiusly, they will not be the exact same coins, so my test will not be perfect, but I am going to select coins that are similar. All will be PCGS graded, collector coins. That is, attractive circ coins in nice collector grades, up to a few hundred dollars a piece. The reason for my test is to decide once and for all which way I want to list on ebay.

ColonialCoinUnion · January 25, 2009 10:00PM

<< 

<< 

<< So tell me this, a consignor has a great coin at an auction at no reserve, do you think for a minute he or the auction house is going to let it go for a song. >>

I suppose an individual consignor could try to protect one coin, but what about 500 in a single auction?

There were 10s of thousands of coins in the January sales, could an auction house really make sure that none of those sold for "too little"? >>

I understand but with computer bidding couldn't he/she just input bids in lieu of a reserve, ditto for the auction house he has a close relationship, remember they side with him/her? >>

Sure, if he/she is willing to buy hundreds of coins back.

IGWT · January 25, 2009 10:09PM

I don't know why, but I keep misreading the title of this thread as "Do undeserved coins bring higher prices."

badger · January 25, 2009 11:28PM

I have sold all of my coins with no reserves at Heritage. On average, I believe that I have gotten good prices for the coins. "On average" is the key phrase. Some have had a bidding war between several players and got moon money. Others were in thinner segments and got reasonable prices. When I look at the total lots, I have been happy with the results.

With no reserve, the auction house knows that the coin will sell and generate commissions. I believe that the no reserve coins get extra marketing. The risk is in a thin market segment that the coin doesn't generate interest from at least two bidders.

BAdger

lkeigwin · January 26, 2009 12:14AM

I rarely set reserves and I start ebay auctions at one cent. This is my practice for coins valued under $1k where I know the demand is high (e.g., a '26-D Lincoln in 64RB). I will do better with no reserve, I am sure of it.

OTOH I will be auctioning seven Peace dollars next weekend, average value $5k each. I know that if I don't set reserves I'll get killed on at least some of these.

So, I think reserves become important for coins according to a mix of value and demand.

Lance.

1Mike1 · January 26, 2009 12:34AM

Unreserved prices bring more sales not neccesarily higher prices. When I do search to buy coins from ebay I refine my searches to auction style sales and filter out the buy it now sales. When the prices are set too high and lets face it, some prices are too high, you are not going to sell coins. All the complaining in the world won't change that.

loro1rojo · January 26, 2009 1:46AM

From experience, when I see a coin auction with a reserve, I always think that the seller has set a very high reserve that is probably above the value of the coin. For that reason, I do not bid, because I always think it is a waste of time.

intence · January 26, 2009 1:47AM

its 50/50 in my experience.

norwegianguy · January 26, 2009 2:40AM

My experience:

No reserve auctions
When I have sold coins with no reserve, the bidding often stops at ridiculously low prices. This happens 20-30% of the time. I have sold MS Morgans ending at $1 each, and - for example - an XF set of IHC 1859-1864 at only $44 (That was the total for the 5 XF coins all together). Maybe this happens because I'm shipping from Europe. Americans seem to be sceptic to anything foreign.
Other times, when my lots have sold for reasonable prices, I get excited about all the bids I get, and thus I feel satisfied. However, most often the final price is still low compared to what I think the coin should really bring in.

Reserve auctions
I think it's expensive to put up a reserve auction, so I usually steer away from it. However, when I have tried it, I most often am happy that I did because I get to keep my coin instead of selling it to those low bidders.

Buy it now with "Make offer"
This has been my best choice so far. It's really possible to get the price you want. But you have to be patient. Not the best choice if you need money right away. And probably only the best choice for high end coins.

One happy story:
Last summer I bougt a $2000 coin at an ebay no reserve auction. A british gold coin. I put it up as a BIN auction at $2750, and... it didn't sell. I then put it up as BIN at $2750 once more, and it didn't sell. So I increased the price to $4750, and put it up at BIN with "Make offer", hoping that someone would offer $2750..... BANG... Sold to a russian at $4750. He didn't even make an offer.

GoldenEyeNumismatics · January 26, 2009 2:40AM

<< 

<< 

<< 

<< On eBay, the answer is absolutely yes. >>

That's absolutely not true. >>

I've been selling coins on eBay for 5 years, ranging from 1963 proof sets to $5k scarcities. My experience has been that unreserved coins always bring more. >>

I've been selling on eBay since 1999, and unreserved lots do not always bring more.
I was disputing the absolute nature of your declaration. >>

Whether it's a true absolute or not doesn't matter. It's over 90% of the time that unreserved lots bring more. In terms of monetary benefit, there's no question which side will ultimately bring more.

seateddime · January 26, 2009 3:16AM

In talking to the folks at Heritage they told me the coins do bring more.

Elcontador · January 26, 2009 3:26AM

I'm with Roadrunner on this. Get a really nice coin and two or three people who want it, and you don't need a reserve to move it. People's egos get involved (remember the Martin Paul, Jesse Lipka fight over a coin?) and prices skyrocket.

CoinJunkie · January 26, 2009 3:27AM

<< Whether it's a true absolute or not doesn't matter. It's over 90% of the time that unreserved lots bring more. In terms of monetary benefit, there's no question which side will ultimately bring more. >>

Well, when you use the word "absolutely" (as you did in your initial post), then it does matter.
And while there may be no question for you based on your experience in the recent bull market,
you are presenting that as if it's some sort of universal truth. It doesn't take getting your a$$
handed to you on more than a couple of unreserved auctions to wipe out the marginal
gains you might enjoy from "more eyeballs" on all the others.

pennyannie · January 26, 2009 5:59AM

norweginguy- I have had some sucess with over inflated BIN's , make offers on ebay myself.

GoldenEyeNumismatics · January 26, 2009 10:16AM

<< 

<< Whether it's a true absolute or not doesn't matter. It's over 90% of the time that unreserved lots bring more. In terms of monetary benefit, there's no question which side will ultimately bring more. >>

Well, when you use the word "absolutely" (as you did in your initial post), then it does matter.
And while there may be no question for you based on your experience in the recent bull market,
you are presenting that as if it's some sort of universal truth. It doesn't take getting your a$$
handed to you on more than a couple of unreserved auctions to wipe out the marginal
gains you might enjoy from "more eyeballs" on all the others. >>

As long as you're selling certified material on ebay with quality pictures, it's extremely hard to have "your a$$ handed to you," assuming your not totally buried in the coin, you're not selling some weird variety few people care about, and are not selling a total dog. I've certainly never had it happen to me after selling thousands of items on eBay. This remains true with raw coins as well, assuming you're not selling or turd, or an extremely suspicious looking piece. If you are selling the latter and expect to get full prices you probably shouldn't be selling on eBay (I'm not accusing anyone with this last sentence, just saying it as a rhetorical).

The gains are not always tiny either. I've had a coin not sell with a reserve of $1500, then relist it without a reserve and have it sell for over $2900.

It's not just "more eyeballs" either, it's more bidders. Once a coin gets on a persons watchlist, or they enter a lowball bid just to be able to track the coin, they're much more likely to place full or aggressive bids on it.

Do unreserved coins bring higher prices?

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