[Al C.risafulli]

We try and avoid reserves, but occasionally it's understandable (we've got two items in our current auction with reserves).

We periodically do customer surveys, just to make sure we're on the right track and we're meeting or exceeding the expectations of our bidders and consignors. We've asked questions about reserves, and found that 50% of our customers WILL NOT BID if there is a reserve - whether the amount of the reserve is disclosed or not.

Count me in the camp of folks that believe that low opening bids and no reserves is the best way to encourage bidders to get involved. In the eyes of most bidders, high opening bids and reserves are impediments, and I've got 11 years of anecdotal evidence to argue both cases.

When we do reserves, we insist that the reserve be a reasonable number, and then we disclose the amount of the reserve about a week before the auction closes, and then we bring the bid up to the reserve so that the next bid meets the reserve. Even still, sometimes items won't meet the reserve.

We do not charge the consignor the equivalent of the buyer's premium because we don't offer the use of the reserve as a way to go fishing for a high price. I understand a consignor wanting to mitigate downside risk by placing a protective reserve on an item, and I'm (reluctantly) happy to support that, even though I try and caution against it because I think everything that mitigates downside risk also reduces upside potential. We don't do hidden reserves, and we don't do "fishing" reserves, so there's no reason to charge the consignor, in our case.

-Al