Auction house bid increment thoughts
 

I guess I never paid attention but didn't realize until tonight that Memory Lane caps the bid increase at $1,000, even on six figure auctions. Every other site I can think of either has a 5% or 10% jump. Are there other major sites with a similar rule to that on Memory Lane? Any thoughts on what the rest of you prefer, or which is better for the buyer or consignor?

As a buyer and consignor I prefer smaller increments....

I agree with Leon, as buyer and cosigner, smaller increments end up making more money. Why? When bidders are not forced to increase a bid by multiple hundreds/thousands of dollars, they are more likely to keep bidding and it also allows for potential "new" bidders who would not have bid in the first place if higher increments were in place.

With smaller increments you wouldn't have to worry about auctions ending at 4AM either. They would go on for days (weeks, months).

Imagine the REA 2015 auction still being open when the 2016 auction begins, as that Wagner creeps over the $2 million mark in $5.00 jumps.;)

I disagree with this premise, it evens out in the long term. You never know if the winning bidder who just went up 10% would have won it with a 1% bid increment because the under-bidder was already at his max.

I know I've increased a full increment (say 10%) when I really wanted to go up a 1/2 increment (say 5%) or less knowing that I was likely going to win it at that level.

+1

As someone who isn't usually willing to stay up until all hours of the night going back and forth, I prefer occupying the level I am comfortable with and knowing someone is going to really have to step up to a significantly higher level win. A vote for the larger increments.

Was wondering about the bidding increments last night on Memory Lane. I placed a new leading bid on the Gehrig Exhibits (portrait) early last night. I thought my bid, with the buyer's commission, was a pretty decent price. But the next bid up, think it was over $1000 up, pushed the card into what I would consider overpriced. Not surprisingly my bid sat until 3 am and I ultimately won. Could the underbidder have bid $300 or $500 more, I expected it was possible he would have. Seems to me that the auction houses are leaving money on the table with these increments. Particularly on items under $10,000.

Or maybe your last bid increment could have been $100 and you win at a lower level. What happened may have given the auction house extra cash, not leaving money on the table.

It works both ways and evens out in the long run.

Very true. I just think psychologically smaller increments lead to more active bidding.

Small increments allows a bidder to bid on it while being high on another lot as Well. Most bidders have budgets. Now I'm a strong supporter of lots going off on a per lot basis. This allows the bidders to all know what time to be at their computers to start the bidding war process. Heritage, Huggins and Scott, and Hunt Ibelieve do this format.

But, using this same logic, it allows another bidder to make a small increment bid on the lot you are currently high on.

Exactly, thus I will make a small bid back at him or even jump the bid. But bottom line is the bidding war has begun and that only benefits the consignor and auction house.

But you said at first that you have a budget, hence not wanting to do a large increment. So you are unable to continue the bidding war and the auction house makes less.

Small increments or large increments even out in the long run.

Obviously we don't all agree on what incremental increases work best, but I think we can all agree on one thing... Eric believes higher increments are best and it all works out in the end!

I'm the first person to say that I am sure people whose business it is to run auctions have given a lot more thought than I have as to how they can best maximize their profit. Capitalism can be a wonderful thing in problem solving.

Not exactly. I disagree with the premise that smaller increments leads to higher ending values. I believe that for any particular auction, at times the smaller increment creates a higher ending value at at other times the higher increment creates a higher ending value.

But an advantage to higher increments, as others have said, is that it creates less "last-minute" bids which allows auctions to end earlier.

10 percent makes a different strategy. With higher value lots, you might want to do a top all bids up to a certain price point. Then you know if you lose the "bidding war" the winning bidder paid up for it. I think Hal Lewis and I had a nice debate on that 15 years ago 😃

I don't really have an opinion either way on which is better, but it certainly did change the bidding pattern for the card I was watching/bidding on. The price jumped about 100% on the last day. Cards in this range seem to get bid up a lot faster with 10% increments, sometimes hitting the final hammer price days before the auction closes.

A general pattern on many auction lots. This is the bidding action.

Day 1 25%
Day 2-13 50%
Last day. 25%

I would agree this is pretty close to the way it happens many times.

I prefer bid increments that are decided upon by non felons

I prefer low increments....

Agreed