Quote:
Originally Posted by Snowman
1 in 6 people have an IQ below 85. That is a significant handicap when it comes to processing even simple information such as this. I don't think the AH's are intentionally on a mission to "target" those less capable, but they are certainly targeting those less capable. It is a deceptive tactic that results in hidden fees and hammer prices that were higher than expected for some, whether intentional or not. However, it allows them to operate above board (and to justify it to themselves) because they can just point to their fee structure as it is plainly spelled out for everyone to see. For most buyers, it's not much of an issue.
I think one could make an argument that it's not actually a deceptive tactic if they indeed charged 20% of the hammer price for sold items. But that's not actually the case. Nobody charges 20%. It's usually between 10 to 15% and the consignor gets some portion of the BP back. It's pretty difficult to argue that it is not intended to deceive with that being the case.
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I can't recount for you how many people I have spoken to at shows who were considering selling their cards and ended up consigning them because the auction house employee(s) explained that
"the seller isn't paying anything" to have the auction house sell their card -
"all the fees are paid by the bidders - they (the seller) will receive 100% of the hammer price". What isn't said is that Hammer price DOES NOT equal fair market value (most of the time - see many comments above about bidders backing out the BP in their bidding calculations and the bidders who are "fooled" by the BP). The irony and frustration for me is for the right higher-end cards, I will pay 80% of fair market value on the spot!
I have said it many times before, it makes no sense to me why so many cards with easily and readily established market values are given to auction houses. The cards that make the most sense to me for auction are cards where demand is super strong and supply is not (think super high end (or low pop) cards of guys like Ruth, Cobb, Mantle, Mays, Robinson, Gehrig, Wagner, etc.)
In fact there is a very real risk involved in selling cards with easily established market values. A recent case in point - I was communicating with a guy looking to sell a 1952 Topps PSA 3.5 Mantle. I offered to take it on private consignment, estimating a selling price of $110K and asking for a 7.5% commission upon the sale of the card. He explained he had that much into it, thought it was worth a lot more and touted what he believed was a certainty that he would at least recoup his investment going to a very well respected, well known auction house. The card happened to sell at auction for $87K less than 3 weeks after we spoke. He negotiated a piece of the BP back, but will still see less than $80K from the sale. I believe his card sold under market. Why? There happened to be another Mantle a grade apart in the same auction? Maybe a few guys missed the auction who would have been potential buyers? Maybe the market is softening just a bit? A bunch of other maybe's? What isn't advertised alongside the all too familiar "get record prices auction ads" is that MOST cards that are auctioned do not sell for record prices!
I have said it ad nauseum - An auction house is more times than not - NOT the best place to sell a card.