Mastro & Other auctions..why the 10% bid increments??

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Posted By: rand

I'll make this quick, don't you think the consignor is the loser at the end of the day. Think about how many non bids are happening because of literally a 30% increase in every bid with the juice. As a business consultant, i feel all the auctions are losing alot of extra money due to the large jumps especially on lower valued cards. I bet Mastro would gain alot of extra sales if the increments were smaller. Just my opinion..any others??

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Posted By: Zinn

I think your math may be a little off. Wouldn't a 10% increase with vig be 12% not 30%?

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Posted By: barrysloate

I think what he means is if he bids $100 and gets topped, he has to come back at $121. With the 20% vig, that's $120 vs. $145. Not quite 30% though.

Many auctions, including my new one, drops to a 5% increment above a certain point, say at 10K.

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Posted By: John H.

I just won an auction that had an opening bid of $200 and 10% bid increments. I finally won it on the fifth bid of $294 which was still a great deal but the bid amounts sure do increase quickly! I wan't going to bid again if I had been outbid.

John

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Posted By: Jay

Do you do financial consulting?

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Posted By: barrysloate

If I were conducting an auction and allowed say 2% increments, the thing would never end. Every lot would have 50-100 bids.

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Posted By: Tom Boblitt

about 10% increments, it is a fair amount, like Barry said, till a certain threshhold is hit to go to 5%. Unfortunately, with max bids, the 10% can go rather quickly. I think the 5% above $5-$10K seems very fair.

As a consignor of items that have been above the $10K mark, I'd be happier with 25% increments. Just joking.....

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Posted By: barrysloate

How about if every lot started at $1 and you had to double the previous bid?

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Posted By: Peter Spaeth

How about a Dutch auction? That would be interesting.

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Posted By: boxingcardman

instead of the compounded percentages. With the vig included, each raise in Mastro is a compounded 12% increase over the last one. As a plaintiff's lawyer, I can't do anything except divide by 1/3 . It is a lot easier for those of us who are mathematically challenged liberal arts majors to add $5 or $50 to the bid than to try and do all that friggin algebra.

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Posted By: Joe Tocco

I'm trying deperately not to make a lawyer joke about deriving fees by dividing by 1/3 .

Joe

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Posted By: Elliot

Just wanted to point out that each 10% increase in bid in Mastro is 10%, not 12% compounded, and not 30%.

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Posted By: Zinn

Current bid is $1,000. With vig $1,200.

Raise bid 10% to $1,100. With vig $1,320. Difference is $120.

Ergo that $100 increase, i.e. 10% was really 12%, i.e. $120.

I don't see how one cannot say that it is not 12%.

If not, what is it?

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Posted By: Eric B

If YOUR bid was $1,000 and someone else bids the next increment of $1,100, you must now bid $1,210. That's a 21% increase. Not 10%, not 12%, and certainly not 30%.

Even if you know that nobody else will bid more than $1,100, you must go to $1,210 to win it unless you have 2 bidder ID's and can use your second bidder ID to beat your first one to get to $1,100.

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Posted By: Cat

It's 10%. The problem is you are dividing by the wrong denominator. You can't pick and choose numerators and denominators:

Current bid is $1,000. Which means you will pay $1,200.

The bid is raised to $1,100. You pay $1,320.

$1,320 is 10% higher than $1,200.

You need to include the vig in both equations.

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Posted By: rand

what i was generally trying to say is...if a card is $1000 and the next bid is $1100 (10%) + 20% Juice = $1320, i wasnt thinking so much of the juice on the original $1000, but that if you wanted that card you have to be ready to literally go up 30% for the next bid..meaning $1000 to $1320... now i realize some people focused more about the math..i was trying to say it would benefit the consignor, auction house, and bidder if the jump was smaller, because alot of people won't make the next bid due to the spread. if there was an inbetween amount, it may be utilized more often than not. ***for the guy who asked me if i was a financial consultant....thanks for the sarcastic remark, but you didnt answer the original question, which was, "does it benefit the consignor?"

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Posted By: Anonymous

Rand, you are comparing a bid of $1,000 (without vig) to $1,320 (with vig). You need to compare $1,000 to $1,210 (both numbers before the vig) or $1,200 to $1,452 (both numbers after the vig) which is 21% in either case.

But no, in the long run it does not benefit the consignor. It comes out even. They will sometimes gain when a bidder reluctantly jumps up the large increment but will sometimes lose when a bidder won't jump up because the increment is too large.

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Posted By: David Vargha

Elliot and Cat are both correct. How shameful is it that a Canadian is giving math lessons to Americans? It's not like Elliot is from the far east or anything like that.

DavidVargha@hotmail.com

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Posted By: Cat

I was told there would be no math.

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Posted By: Anonymous

David,

If you have a current bid of $1,000......YOUR next bid must be $1,210 which is a 21% increase since someone else has to put in the $1,100.

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Posted By: JimB

Anonymous,
That is not technically correct. If you have a $1,000 bid in, you can always make a straight bid of 1100. You are essentially raising your own bid to 1100 so that you are the first one to that level. One problem with Mastro auctions is that they only allow top all bids in increments of 20% .
JimB

edited for grammar

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Posted By: Eric B

I see. Thanks, Jim.

And can I really be anonymous when practically my entire name is the login?

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Posted By: Tom Boblitt

5 out of every 4 people have trouble with fractions..........

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Posted By: Cat

There are three kinds of people in this world...those that are good with numbers and those that are not.

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Posted By: Hal Lewis

There are 10 types of people in the World.

Those that understand binary numbers and those that don't.

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Posted By: leon

First of all the 10% increments in auctions seem fine to me on lower dollar items, however I wish at some higher price point they could go to 5% (I know they do in some auctions when the bidding gets real high but those are usually in the stratosphere)....So if a card/object reaches 5k, which I think is a good threashhold, it goes to 5% instead of 10%. I remember a very recent auction where the bid was over 12k and I didn't want to go another $1400'ish on the lot but I probably would have gone $700 more.... I believe everyone would win in that scenario. BTW, I have a general studies degree instead of a business one due to math . regards

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Posted By: barrysloate

My new software reduces the increment to 5% past 10K. Seems like a reasonable point and I was fine with it.

As I've discussed before, the larger increment can help you too. If you get your last bid in you may scare everyone else off...with a smaller increment you are more likely to get topped. It works both ways.

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Posted By: Paul

I may sound like an idiot, but what's "vig"? I know it means "buyer's premium", but where does "vig" come from? It sure doesn't look like an abbreviation of "buyer's premium." Does it stand for "various increases and garbage?" Or "vile, irritating gouging"?

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Posted By: Cat

Paul:

I don't have the answer but it is common terminology in loan-sharking. If you get a $1,000 loan there may be a 20% vig (interest rate). At the end of the month you would need to pay the $1,000 plus the $200 vig.

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Posted By: David Vargha

American Heritage Dictionary
vigorish (vÄ*g'É™r-Ä*sh) Pronunciation Key
n. Slang

1. a. A charge taken on bets, as by a bookie or gambling establishment.
b. The rate or amount of such a charge.
2. Interest, especially excessive interest, paid to a moneylender.

Thus the term "vig" . . .

DavidVargha@hotmail.com

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Posted By: Rick McQuillan

I work for the government, and this is how we figure it. Let's say that I can go somewhere and purchase an item for $1000. Because we are the government, we can't just purchase it, it has to go out for bids. So, we put it out for bids, add in all of the government regulations, the union rules, the built in costs of the bidding process, and the 2 years of waiting for the contract to be awarded, and now the item will cost us $6000.

If anyone has any VG T206 commons that they want to sell for $4000 each, please let me know. I will put it out for bids and get back to you in 2-3 years.

All jokes aside, I don't have any problem with the 10% rule. I have been at "live" auctions where the auctioneer is trying to squeeze the last quarter out of the bidders and the auction goes on forever. If you know what the card is worth, and how much you are willing to pay, then it doesn't matter whether the next bid is 5% or 10% higher.

Rick