Posted By:
Bill PanagopulosNot to condemn nor praise Mastro, but...
I've been running historic auctgraph auctions for about 17 years. We pay consignors 45 days after the close of the sale, with our option for an additional 15 days to collect outstanding balances before considering bids reneged. In other words, if a consignor sells $1000 worth of material, and $800 worth is paid for in 45 days, he gets $800 on the 45th day, and we endeavor to collect the additional $200 over the next 15 days. And we DO endeavor, short of sending an armed posse to kick the door in.
The story about "floating" the money is really hogwash. The interst is negligible (I leave funds in a 1.5% checking account). Figure this: Sale closes, at least three days to invoice by email, additional 4-15 days (overseas) by USPS, and then wait, wait, wait for payment. And in this market, payment is S L O W! Now, that's not OUR fault, and it doesn't happen a lot, but it is increasing because collectors (like us) love our material but money is tight. Default rates haven't increased, but getting money on time is like pulling teeth.
BUT!! For the same reasons I have trouble getting paid, I have to pay on time. My experience is that it is ABSOLUTELY CRUCIAL that we pay exactly on time. We installed new software ($30K) for our last sale, it went nuts, and consignor reports and checks went out five days late...and I was nearly crucified. I had to reach in my pocket, but we paid in full, everyone. But the surest way for an auctioneer to put himself out of business, in my opinion, is delay in payment to consignors. Advances and guarantees are the biggest problem. I wish Bill Mastro all the best - he has top-quality auctions, and is a sharp businessman.