Mastro or Memory Lane
 

Posted By: <b>SC</b><p>"Even if you feel that the item that you have already consigned isn't going for what you hoped for, having one of your "friends" shill bid the item to the point of winning your consignment back is a lousy idea. Is that item going to sell for enough more in another auction to make up for the seller's commission (0-15%) and the buyers premium (15-20%)that you'll be on the hook for if you buy it back?....Probably not."<br /><br />This would be the case if the only items shilled were the ones bought back. But as we often know, from eBay as well as other examples, the benefit can be in having that bid topped by the current hi bidder. Easiest example:<br /><br />10 items currently bid to $1000 ea.<br /><br />Consignor (through an intermediary) tops all 10 items to $1100.<br /><br />Other bidders top 8 of 10 items to $1210. Consignor buys back two of them.<br /><br />Consignor sees 8 items sell for an extra $1680, less 10% seller's fee, nets $1412. Consignor loses 25% on two items @ $1100 - total loss $550.<br /><br /><br />I can clearly see the financial benefit in pushing your own consignments in an auction. However, as long as the auction house isn't allowing direct consignor bids, or cutting side deals - what more can you ask? Whether you think they are or are not, or the degree to which they police it, is a question you have to determine for your own comfort.<br /><br />The best example is an auction house receiving bids from a single bidder on five different items, all the same consignor's item, and all varied enough that it is unlikely a single bidder would pick out these exact lots (vs. someone bidding on all T206s that happened to be consigned by the same person). _I would ask the auction houses - do you have any abilities to track such a suspect circumstance? Do you care?_

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Posted By: <b>Jim VB</b><p>&lt;&lt;Thank you for agreeing with me--Doug should answer this question publicly--&gt;&gt;<br /><br />Being relatively new to this board, I was unaware that Doug HAD answered these questions previously. <br /><br />Now, do you agree with me, that hijacking someone else's thread is not the proper way to go about getting the answers you still seek? <br />

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Posted By: <b>JimCrandell</b><p>JimVB,<br /><br />Yes although thread was already going a different direction with dialogue with Jeff and Doug.

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Posted By: <b>Dan Bretta</b><p>What if a shill bidder "wins" an auction on a card where there was no consignment fee and never pays for the card, but then the consignor wants the card back? Then the consignor doesn't seem to be out anything except a little time.

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Posted By: <b>JK</b><p>Good point Dan.

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Posted By: <b>barrysloate</b><p>By reneging the shill bidder could be subject to a lawsuit. If the sum is large enough, the auction house may choose to go after him.

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Posted By: <b>Dan Bretta</b><p>Does the auction house have the right to hold on to the card(s) while they were pursuing judgment against the shill bidder? What if the consignor wanted the cards back ASAP?

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Posted By: <b>Eric Brehm</b><p>In SC's example if only 4 of 10 shill bids are topped consignor nets $756 (90% of $840) and loses $1650 (25% of $6600). Pretty risky strategy.

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Posted By: <b>JK</b><p>With respect to a lawsuit, it seems to me that if a consignor and a friend conspired to shill an auction and the shill bidder refused to pay, it would be highly unlikely that there would be a lawsuit. Before I explain why, I have not reviewed the bidder's agreement with the auction house - so I dont have all the terms in front of me to state this with certainty. That said, in reality, the auction company is only going after the bp. Rarely, if ever, is a 15 or 20% bp going to be enough to justify the expense of a lawsuit. A 10k item is still only going to have a 2k bp - hardly worth the expense of a lawsuit in my opinion. Heck, unless you have collection attorney's working on percentages of your recovery, even a 20k bp is going to be hard to recover without fees eating into most of the recovery. Now, if there were a way to recover attorney's fees, perhaps lawsuits do become more of a possibility.

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Posted By: <b>barrysloate</b><p>Josh- in 1988 I sold a T206 Wagner at a live public auction in NYC. The day after the auction the winning bidder called and said he decided not to honor his purchase.<br /><br />I retained a lawyer, we won the case, and he ended up paying in full for the card. Sometimes a reneger will get sued.

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Posted By: <b>Joe D.</b><p>Do you still have his number?<br /><br />I will gladly reimburse him the full amount he paid in 1988 for that Honus Wagner card.<br /><br /><br /><br />

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Posted By: <b>barrysloate</b><p>He paid about 18K for it, and it now resides in a PSA 1 holder. It is easily recognizable as the upper left corner is missing. Leland's auctioned it about five years ago. I guess I would let him off the hook and take it back too.

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Posted By: <b>JK</b><p>Barry - of course, you had to give the bidder the card after he paid. Now what would have happened if your consignor, who was in on the shill, had demanded the card back as soon as you notified him that the bidder refused to pay? Ive never seen a consignment contract, but unless it gives you the right to retain the card while you seek legal action, I suspect you would have had a more difficult time pursuing the matter.<br /><br />Moreover, most sales are not 100k wagners. I'd say one would have to be pretty stupid to risk being responsible for the bp on such an expensive card. The average 5-10k lot isnt going to be worth suing over.

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Posted By: <b>barrysloate</b><p>Josh- the card wasn't consigned to me. I owned it, and I gave it to Phillips Auctions to sell. So if for some reason we couldn't collect I just would have kept it.<br /><br />Edited to add most items aren't worth suing over. It's just easier to reoffer the card another time.