Code Cracked on Hidden Reserves- Iconic Auctions

[Rhotchkiss]

For years I have been watching and bidding in Iconic auctions. They often have some very cool entertainment stuff; they also have sports and other items. But I was always alarmed at how many items that “sold” showed up again, auction after auction (or several auctions later). I was also troubled by how current bids could be so high despite few bids. Ed D wrote a thread a few weeks ago about some other funky stuff. Anyway, this thread is not so much about Iconic as it is using them as an example of an auction house that uses hidden reserves and how to tell whether you are bidding against a real bidder or the auction house.

A hidden reserve is the minimum amount established by consignor and AH that an item will sell for. It’s a reserve bc it’s a minimum/floor. It’s hidden because it’s not disclosed, meaning bidders have no idea the reserve exists (unless/until the auction ends and the item does not sell). As a buyer and seller, I don’t mind a hidden reserve; that’s as much as I will say on the merits or issues of hidden reserves. To me, the issue is when the auction house can increase the current bid to, or closer to, the hidden reserve amount. Iconic does this.

Some states allow the auction house to place bids to increase the current bid amount to or closer to the hidden reserve. To me, this is tantamount to shill bidding because the bidders think that the current hammer reflects actual bids and not auction house increases. I do not understand how this is legal, but it is in some states (apparently in Arizona where Iconic is from).

I was looking at Iconic’s auction that ends tonight and I notice many items that have been in prior iconic auctions, including this awesome Ty Cobb piece that I have bid on many times: https://www.iconicauctions.com/Ty_Co...LOT187061.aspx

I would like to own this, but have no idea the real value since it’s been up several times and never actually sold. At this point, it’s a red flag item, as is several things in their auction. So I am looking at this item and I notice the opening bid was $2000, there have been 10 bids, and the current bid is at $9,202. Then I look at several other items that had $2000 opening bids and the current bids compared to number of bids don’t make sense. Below is a great example, using items with $3000 opening bids - they both start at $3000 and the both are sitting at $8,565, but one has 5 bids and one has 7 bids - how is this possible?? It’s not unless the auction house has increased the current bid to the hidden reserve. The problem here is that the $8,565 bid approximates where the items would be had they gotten 12 real bids - it’s not a round or obvious number that makes one realize it must be a reserve amount. Plus, there are at least 3 items in the auction that started at $3000 and are sitting at this very specific number of $8,565 (yet they have had 5 or 6 bids, not the 12 it would take to get to about $8,565).

Ok, so here is the point- I have figured out how to tell when you are getting played by an AH that uses hidden reserves and “bids” up the item to the hidden reserve. At least, I have cracked Iconic’s code:

Iconic uses 10% bid increments. Iconic shows the starting bid. Iconic shows how many bids have been placed, and luckily, these bids do not reflect auction house increases. So, it’s an easy math equation: starting bid x 1.1 x number of bids = real bid amount by real bidders (remember bid 1 is the opening bid amount so the first x 1.1 is actually the second bid). Let’s look at this Shaq item pictured below:

Starting opening bid is $20,000.
Bid increments are 10%
There are 4 bids
Current bid is $42,875

Bid 1 = $20,000
Bid 2 = $22,000 (20,000 x 1.1)
Bid 3 = $24,200 (22,000 x 1.1)
Bid 4 = $26,620 (24,200 x 1.1)

Yet the “current bid” is $42,875. That may be the hidden reserve. At the least, we know that over $16,000 of “bids” were placed by the AH and not real bidders; incidentally, 9 bids at 10% increments brings the $20k opening bid item to $42,872 - troublingly close to the $42,875 “current bid”

I will bid in Iconic because they have things I like and they send the items I win, quickly and safely, without issue, after I pay. But I am now more clear-eyed when I bid. And not just Iconic - when the opening bid and number of bidders is stated and there are bid increments, I can now determine whether I am bidding against other people or the auction house.

Ryan Hotchkiss

[calvindog]

Ryan, you’re brave to bid in Iconic Auctions. They have some cool stuff but everything about that site screams fraud to me.

[ajjohnsonsoxfan]

You would have to really "love" the stuff to bid with what seems like a super shady outfit.

[ezez420]

Ryan hits the nail on the head with this.


Sent from my iPhone using Tapatalk

[Sterling Sports Auctions]

Number of different bids on the lots with the same opening and current bid could be reflected by the max bid a bidder puts in.

Lee

[Balticfox]

Originally Posted by Rhotchkiss

Anyway, this thread is not so much about Iconic as it is using them as an example of an auction house that uses hidden reserves and how to tell whether you are bidding against a real bidder or the auction house.

Good input!

[Lorewalker]

I do not bid with them but I am fascinated by Ryan's post. How can anyone know if the comparison of two different lots cannot just be attributed to someone using a top all or max bid?

As an aside, I would not be comfortable bidding with them if the same items keep turning up in a short period of time. I could not careless if there is a hidden reserve. My bids are based on the value I place on the item regardless of legit competing bids, hidden reserves or shill bids, which I think is happening quite a bit.

[oldjudge]

That Babe Ruth ball inscribed to Bill Stafford looks interesting. Stafford was only ten when Ruth died and it seems to me like a strange inscription to a sub-10 year old. Who knows?

[Rhotchkiss]

Originally Posted by Sterling Sports Auctions

Number of different bids on the lots with the same opening and current bid could be reflected by the max bid a bidder puts in.

Lee

Thanks Lee (who is an auction house owner). But how does a max bid impact the amount of bids? I understand it could impact the number of bidders, but when one puts in a max bid, isn’t their an actual bid placed at each increment up to the max bid?

For example, the opening bid is $100 and there are $20 increments (up to $200). I place the first bid and put in a max bid of $200. I take the high bid spot- first bid. Lee bids $120 and then is outbid by my max bid but only at the $140 increment - bids two and three. Lee bids $160 and is immediately outbid by my $200 max bid, which takes the $180 bid increment - bids four and five. Lee bids again and (I guess) is outbid by my $200 max bid- bid six.

So, two bidders but 6 bids have been placed notwithstanding my initial $200 max bid. No?

[Sterling Sports Auctions]

I don't know for sure but I think if the first bidder bids 200 and the next one bids 190 with a 20 start that it would only be two bids.

I have never really paid attention to be positive.

[parkplace33]

Thanks Ryan. This is a crazy way to run an auction. Has anyone actually one an item from iconic?

[Rhotchkiss]

Originally Posted by parkplace33

Thanks Ryan. This is a crazy way to run an auction. Has anyone actually one an item from iconic?

I have won things from them. Like I said in my first post, they ship quickly and safely after I pay. Never had issues in that regard. It’s more me being fed up bidding on the same items, auction after auction, because they never sold and my trying to figure out what the real high bid is/was and whether I chase things. As mentioned, I think I figured out how, at least, Iconic works so I know whether I am bidding against the AH or another bidder. I Suspect that knowledge will work in other auctions that use hidden reserves and can bid lots up if the opening bid, number of bidders, and bidding increments is disclosed.

As an aside, I am high bidder on one item that closes in their auction tonight, but the current bid accurately reflects the number of bidders x 10% increments, going back to the initial bid amount.

[bnorth]

Originally Posted by Rhotchkiss

Thanks Lee (who is an auction house owner). But how does a max bid impact the amount of bids? I understand it could impact the number of bidders, but when one puts in a max bid, isn’t their an actual bid placed at each increment up to the max bid?

For example, the opening bid is $100 and there are $20 increments (up to $200). I place the first bid and put in a max bid of $200. I take the high bid spot- first bid. Lee bids $120 and then is outbid by my max bid but only at the $140 increment - bids two and three. Lee bids $160 and is immediately outbid by my $200 max bid, which takes the $180 bid increment - bids four and five. Lee bids again and (I guess) is outbid by my $200 max bid- bid six.

So, two bidders but 6 bids have been placed notwithstanding my initial $200 max bid. No?

I have never bid with them. Do they also have a straight bid option? If so that changes the bidding pattern you describe. I know I have used a straight bid to change the bids so the increments went to a pattern I wanted for late bidding.

[swarmee]

Yeah, you're missing that most auction houses have three ways to make a bid:
1) Bid next increment
2) Bid an IMMMEDIATE Max Bid. So if the start bid is $50 and you want to bid $250, it goes immediately to $250.
3) Bid a capper Max Bid, which will increment and outbid bidders each increment until it's eclipsed.

You're not taking into account bid #2.

[Rhotchkiss]

Originally Posted by swarmee

Yeah, you're missing that most auction houses have three ways to make a bid:
1) Bid next increment
2) Bid an IMMMEDIATE Max Bid. So if the start bid is $50 and you want to bid $250, it goes immediately to $250.
3) Bid a capper Max Bid, which will increment and outbid bidders each increment until it's eclipsed.

You're not taking into account bid #2.

See below. You can submit a straight bid at a much higher amount, which would explain different bids but same current bid. That said, I am sure that is not happening here because the disparity is on a ton of lots, very few people would just go straight to a straight max bid and it would have to happen many times in Iconic auctions, the current bid does not reflect an exact increment and you must bid in increments, and I have seen at least a dozen items in past auctions.

To clarify, I understand how one can bid in auctions - I have been doing this a long time and bid in many auctions. There are at least a dozen lots where the numbers of bids x increments do not equal the current bid. There is no way a bunch of people are, auction after Iconic auction, putting in straight max bids. Plus in all those cases, the current bid does not equal the increment! They are close, but they are not exactly a product of the opening bid x10% x 10% x 10%, etc.

[Lorewalker]

Originally Posted by Rhotchkiss

See below. You can submit a straight bid at a much higher amount, which would explain different bids but same current bid. That said, I am sure that is not happening here because the disparity is on a ton of lots, very few people would just go straight to a straight max bid and it would have to happen many times in Iconic auctions, the current bid does not reflect an exact increment and you must bid in increments, and I have seen at least a dozen items in past auctions.

To clarify, I understand how one can bid in auctions - I have been doing this a long time and bid in many auctions. There are at least a dozen lots where the numbers of bids x increments do not equal the current bid. There is no way a bunch of people are, auction after Iconic auction, putting in straight max bids. Plus in all those cases, the current bid does not equal the increment! They are close, but they are not exactly a product of the opening bid x10% x 10% x 10%, etc.

I think you have answered your own question...assuming you even had a question. The house is clearly not the most ethical (validated by several others on this thread) so expect sneaky BS and manipulation. They must be using the straight high bid on certain lots (for whatever reason) as a hidden reserve to protect the lot.

[ezez420]

And the fact like I said in another post this shady house changes auction close dates. It makes me wonder that they did so because they forgot to shill the items up.

It's funny that I can no longer find the 1952 Topps set archive they had in November 2024 auction.


Sent from my iPhone using Tapatalk