Anyone Bidding in Sootheby's SCP Tonight? [Archive]

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01-30-2008, 09:07 PM

Posted By: Cat (ret.)This clause (quoted from their Auction Rules) has always caused me to bypass Sotheby's auctions. If this isn't shill bidding, I don't know what is: "Some lots in the sale also have a reserve price. A Reserve price is the confidential minimum amount below which the consignor of the lot will not sell the property. Therefore an amount equal to or in excess of the reserve must be bid on a lot in order for a successful bid to be accepted on that lot. We may implement such reserve by bidding on behalf of the Consignor and may bid up to the amount of the reserve, by placing successive or consecutive bids for a lot, or bids in response to other bidders. In instances where we have an interest in the lot other than our commission, we may bid up to the reserve to protect such interest."

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01-30-2008, 09:08 PM

Posted By: MattCat - unless they release what those reserves are beforehand it indeed sounds very much like shill bidding. Good catch.

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01-30-2008, 09:16 PM

Posted By: MVSNYCWHAT? that is ridiculous...very shady.

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01-31-2008, 02:06 AM

Posted By: Jeff D.To be honest, that reserve policy is very similar to what happens on ebay. I suppose the only difference would be that ebay lets the bidder know that there is a reserve. But, if you place a bid in an auction on ebay with a reserve, and your bid is above that reserve, ebay automatically bids you up to the reserve price, even if the next highest bidder is way below that price and not near your bid at all. If your proxy bid is still below the reserve, it simply goes to the next bid increment above the current bid as normal (but below the reserve). It's much more transparent in an ebay auction as you know that you are the only bidder who actually bid above the reserve (by looking at the bid history), but it's the same principle. The easiest way to avoid problems with this policy is to only bid as much as you really want to pay for an item. EDIT to add that ebay does not let you know WHAT the reserve price is, only that there EXISTS a reserve.

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01-31-2008, 03:44 AM

Posted By: barrysloateI don't think it's shady if they disclose it upfront. You may not like it and can choose not to bid, but at least you know this going in.

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01-31-2008, 05:04 AM

Posted By: Corey R. ShanusThere was a lengthy thread last year discussing the practice of auction houses setting secret reserves and placing house bids up to that amount. While I personally think it is repugnant, it is not only legal but a universally accepted practice in the auction industry. All the big players (e.g., Sotheby's (not Sotheby's SCP but Sotheby's), Christies) practice it.

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01-31-2008, 05:25 AM

Posted By: leonI have never heard of this policy of auction houses actually placing bids to get to a reserve minimum. I guess I slept through that part of the course....I need to give this some thought but on first impression I don't like it...(not that that matters)....

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01-31-2008, 06:20 AM

Posted By: barrysloateNobody likes it, but at least Sotheby's says they are doing it, so you can choose not to participate. When you are at a live auction the bidding moves briskly and you typically hear the auctioneer yell: "I have $5000 to the book." That either means somebody left a real bid, or the house is just bidding up to the reserve. And the audience has no way of knowing. That is why it is imperative for bidders to set limits. Because if you assume that there is a real person who agrees with you about the value of a lot, you might end up seriously overpaying. On the other hand if you have to have the lot and will pay whatever it takes to get it, you are their model customer.

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01-31-2008, 06:41 AM

Posted By: Joe D.As Rob mentioned - because of the doctored scan of the Panorama - I will always look to avoid their auctions. Sure, people and organizations can be forgiven... but first they have to come clean and explain why it will not happen again. Until then... no matter how cool an item(s) may be - I will not bid. barry - I respectfully disagree. It is something outside of the norms of sports card auctions procedures - and it is hidden away in the fine print. I don't think that makes it less shady..... it is just as shady but with a legal covering.

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01-31-2008, 06:47 AM

Posted By: Max WederOf course, Sotheby's and Christies have also done other practices--together--, lest we forget the price fixing scandal which resulted in Sotheby's paying a 13 million pound fine in 2001. <a href="http://news.bbc.co.uk/2/hi/entertainment/2375667.stm" target="_new" rel="nofollow">http://news.bbc.co.uk/2/hi/entertainment/2375667.stm</a> Max

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01-31-2008, 07:27 AM

Posted By: Corey R. ShanusThe thread is entitled "Live From Sotheby's" and the last post was June 10, 2007.

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01-31-2008, 07:29 AM

Posted By: barrysloateJoe- I believe we do agree. I don't see anywhere in my post where I endorsed it. I even said people are free not to bid if they find it offensive. However, the auction law of New York allows it.

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01-31-2008, 08:11 AM

Posted By: Joe D.I did not mean to imply that you endorsed the idea. So if you somehow got that impression - I apologize. My comment was with regard to shadyness or lack there-of. I still think it is shady / whether disclosed or not in the Rules. For it to be 'not' shady - they would have to disclose it to all of the bidders as they issue the fake bid. maybe call it "Shill Bid" next to that particular bid. Something like that. edited some content to hopefully be more on target.

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01-31-2008, 08:20 AM

Posted By: Scot YorkBarry, Do you allow consignors to bid on their own items? Edited for spelling...and to say, I did win in Sotheby's last night. I won a group of E122's cheap IMO. <a href="http://www.scpauctions.com/scpauctions/LotDetail.cfm?Lot_ID=14279" target="_new" rel="nofollow">http://www.scpauctions.com/scpauctions/LotDetail.cfm?Lot_ID=14279</a>

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01-31-2008, 08:26 AM

Posted By: barrysloateJoe- I agree that it is not a good practice because you do not have a clue what is going on with the bidding. Scot- the answer is no. My software is set up as follows: I type all lot numbers, descriptions, minimum bids etc. into a spreadsheet when I put my catalog together. There is also a column labeled "consignor." When I type in the consignor number, that locks him out from bidding on his own lot. Now if you ask me can a consignor ask a friend to bid for him? Fact is, I can't identify it or police it. Do I think it's happened? I have no idea.

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01-31-2008, 08:31 AM

Posted By: Scot YorkThanks Barry, I guess there is no way to stop shill bidding. I hope all auction houses are at least trying as you are.

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01-31-2008, 08:39 AM

Posted By: barrysloateScot- I've had numerous discussions with hobby friends about whether I've ever suspected somebody bidding on behalf of a consignor, and the fact is I wouldn't know what to look for. People often speak about suspicious bidding patterns, but I don't even know how to define a suspicious bid. Likewise, suppose I suspect that something isn't right and I contact a bidder and tell him I have reason to believe he is shilling for a friend. And now let's say it turns out I was wrong. I alienated and likely lost a customer for life. So what do I have to gain by it? I'll be perfectly honest and say I turn a blind eye to the whole thing. As long as my software locks out consignors, I feel that I am doing what I am supposed to do.

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01-31-2008, 09:00 AM

Posted By: Joe D.I agree 100%. I don't think anything more could be expected from you or any auction house.

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01-31-2008, 09:09 AM

Posted By: Scot YorkI agree.. that's all you can do.

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01-31-2008, 09:43 AM

Posted By: Mike PugedaPutting ebay and their reserves aside, if a seller has a price that he will not sell below, why not just set the minimum bid to that point and start there instead of having the auction house push bids up until the reserve is met. If it doesn't hit the reserve the seller is probably not going to sell anyway. I can understand the reserve more on ebay where you might be trying to stimulate bidding on items that aren't "must haves" (low start bid w/ reserve), but in a large auction house, where lots tend to be those that are more desirable and guaranteed to sell, I feel the auction house should just start bidding out at the lowest price the seller will take. At least the bidder doesn't feel like something shady is taking place. If the seller wants to set a ridiculous reserve, the auction house can decline the lot. Is this not a plausible solution? Mike Pugeda

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01-31-2008, 09:46 AM

Posted By: MattMike - your suggestion makes lots of sense, assuming that the houses are telling the truth when they say the self-bidding is a way of implementing a reserve. However, on the possibility that they simply use it as a cover for shilling a bidder up to his/her max, they wouldn't much care for your solution.

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01-31-2008, 09:51 AM

Posted By: ScotI don't know of any auction house that has reserve starting prices. Interesting!

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01-31-2008, 11:01 AM

Posted By: Corey R. ShanusThe reason auction houses don't do that is because it takes away one of their weapons to induce higher bids--the perception that house bids up to the reserve are in fact real bids, thus creating more interest in the item. What a person bids depends to some degree on that person's perception of how much other interest there is in the lot. For example, suppose you aren't sure you're willing to bid X (the hidden reserve) for the item. You could be influenced to bid that high if you felt that all the "bids" the auctioneer is reeling off as he slowly ascends to X are in fact real bids. It's the human element coming into play. After all, if other people have an interest in the item at a level close to X, then that information could make you reassess your value of the lot and induce you to place a higher bid than you otherwise would. The term I used to describe this practice in the other thread was legalized fraud. The practice is by allowed law, but because its purpose is to induce bidders to believe something that the auction house knows is not true (genuine interest at those house bid levels), which information is material to a bidder's decision how high to bid, IMO that constitutes fraud.

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01-31-2008, 11:41 AM

Posted By: barrysloateCorey- well articulated.

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02-01-2008, 05:47 AM

Posted By: MVSNYC"I don't think that makes it less shady..... it is just as shady but with a legal covering." exactly joe.

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02-01-2008, 05:53 AM

Posted By: leonUnless there is something I HAD to have (after all I am still addicted) I would just as soon spend my money other places. I still have a bad taste in my mouth for the way they treated Ryan too. I don't care for running bids up to reserves either but I guess if they disclose it then so be it. I will be way more careful now that I know it and will NOT put in max bids. I very much agree with what Corey has said about this whole issue. I could never state it so elegantly though....best regards

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02-01-2008, 02:59 PM

Posted By: shane LeonardI realize that the Ryan deal was a bad one. I agree with Barry on "shill bidding" explaination for the reserved bidding. I for one really like their auction and have picked up some really nice items from them. They don't over grade like some of the big auction houses and I place my bid according to what I want to pay for it.

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02-01-2008, 06:16 PM

Posted By: Fred CTalk about the house running up bids on auctions because of house reserves... I remember a Superior Sports Card auction a year or two ago. They had reserves on many lots and they didn't bother to let anyone know about the reserves. Had I known about the reserves I would have bid on what was reasonable to me. Instead I bid on multiple lots. Some of those lots I was high bidder when the auction seemed to close. It was odd because in this particular auction there were about 180 lots that had cards that interested me. Luckily, they kept their bids on three or four different pages and I was able to save the closing bids on all the lots that interested me. Soon after the auction closed I figure about 50%-60% of the cards had zero dollar bids. Then shortly there after I found out it was because they had hidden reserves. I was a bit unhappy but I took the two cards I did win. I thought it was kind of cheesey that the auction house had you chasing a number. To me it would have been better if they just put up a minimum bid that was high rather than run the auction the way they did. I don't know if the house bid up the cards but somebody did. Maybe they just let the bidders do the work and decided to just not sell what didn't meet the minimum price they put on the lot. Oddly enough, months after that auction the auction house consigned the cards to a few different ebay dealers. Most of the remaining cards were sold via that outlet.

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02-01-2008, 06:45 PM

Posted By: Anthony N.Fred- was that the last auction that Superior did, with all the OJ's? About half of the lots didn't seem to get sold. I believe it was also the first one that Chris Porter wasn't running, and new management didn't seem to be up to the same standards.

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02-01-2008, 06:55 PM

Posted By: Fred CAnthony, That is correct. In fact, a couple of us called and debated the merits of the auction. There were a few minor deals struck from those conversations. Also, the scans that Superior used were not a good representation of the cards because many of the cards had lighter images than what the scans projected.