Auction Reserves - let’s discuss

[Rhotchkiss]

A few days ago I (sort of) posted about the SGC 7, 1952 Topps Mantle ending in Heritage tmrw night. As of the date I posted, the hammer on that card was $260k, with an all-in price of $312k with buyers premium. IF the auction ended there, at $312k (and there was 4-5 days left), it would be a substantial increase over a comparable Mantle that most recently sold for $264k. HOWEVER, two days ago a reserve gets posted, currently at $280k before BP. I bet nobody bids and the seller, who almost certainly got a piece of the buyer’s premium, misses out on a solid sale.

In the same auction, there is a super rare, twice signed, 1893 Cy Young Cabinet. It sold in 2018 for $60k. It was auctioned in 2022 but did not hit its $240k reserve (with BP). It was at about $110k with BP a few days ago when a $200k reserve ($240k with BP) popped up. I highly doubt it sells now with that reserve in place, but I promise it would have been bid up bc I had every expectation of going after it a few more times. If it doesn’t sell, Seller misses out on at least 200% profit in 5 years.

One last thing to consider - Heritage makes the consignor pay the BP on all amounts that do not meet their reserve. So, even if the consignors are getting 50% of the BP on the Mantle and Young, they will fork over $20k+ likely to watch their item not sell; this is the second time the Young consignor will suffer that fate. Please note, this is not about Heritage - almost all AH’s will offer reserves and I expect most take a BP even if the item does not sell; it’s just that these examples are in the current Heritage auction.

I understand the attraction of a reserve for the consignor, and I have often considered one when I consign. But then I recall a story by one AH owner who recounts when he tried to convince the consignor not to put a reserve on a lot, the card did not sell at the reserve, the consignor was mad so the AH purchased the card for the reserve amount, the AH then put the same card in its next auction without reserve and it closed well above the reserve amount.

As a bidder, I don’t like a reserve and I rarely go hard after items with a reserve. As a consignor, I have never put a reserve; some items have beat expectations and others have disappointed, but I had resigned to selling the item when I consigned it so I never wished I had put a reserve in the disappointments.

Let’s talk about reserves, as a bidder, consignor, auction house….

[gunboat82]

Do we know for certain that Heritage is actually charging the consignor the BP when reserve items don't sell, as opposed to simply reserving the right to do so?

[jsfriedm]

As I posted in your original threat on the Mantle, at first Heritage actually posted a reserve of 320, and only revised it down to 280 last night.

[brianp-beme]

Originally Posted by jsfriedm

As I posted in your original threat on the Mantle, at first Heritage actually posted a reserve of 320, and only revised it down to 280 last night.

Without diving into this matter too deeply, the judicial system does not take lightly threats directed at others, including, but not limited to, deceased baseball hall of famers.

My advice is that the original poster of the threat upon The Mickey Mantle consider issuing both a retraction and apology.


Brian

[Rhotchkiss]

Originally Posted by gunboat82

Do we know for certain that Heritage is actually charging the consignor the BP when reserve items don't sell, as opposed to simply reserving the right to do so?

I don’t know in this specific case. But I know people who have been charged by Heritage the BP on reserve lots that did not sell. My gut is that it’s intended partly as a disincentive to put a reserve. I have no issue with the practice - the AH did its end of the bargain and should he paid. As with everything, I bet it’s all fluid and negotiable; the mantle reserve has already been dropped $40k.

[brunswickreeves]

I’m surprised to hear HA agrees to a reserve (maybe for items expected to exceed a certain level?) My understanding was they would not support this and instead set the opening bid at a fraction of the expected hammer price. This enables buyers to get into the game and enjoy a vigorous auction process. The points of unsold items with set reserves seems to substantiate this position.

[Leon]

Reserves don't bother me. I very rarely win one that has one, but that is the consignors choice. When I sold my first collection through HA there were no reserves. That's a true auction.
.

[Aquarian Sports Cards]

As an auction we don't do reserves. We feel it stifles bidding. Yes, we do lose consignments because of that, but we feel in the long run the more comfortable our bidders are, the better our consignors will do.

[hcv123]

1) I know for a fact that when a reserve is set, it does not automatically mean the consignor pays if the item doesn't sell - just another potential point of negotiation.

2) As a bidder I am generally dissuaded by reserves and have "moved past" some items with them. I believe when reserves are set too high (like in the case of the Young you mentioned) it hurts the item and potential sale. It almost becomes a "make me sell it" price, rather than a "what the market will bear" auction.

3) As a consignor (I admittedly consign very little), I understand the temptation in some cases to ask for a reserve and have done it a couple of times. While the items did sell, I was not really happy with the outcomes. More times I have sold without reserve and outside of a single instance of gross mishandling of an item by an auction house, have not been disappointed. I think the largest risk of no reserve is with cards with low demand - auctions depend on a fight.

4) I am still perplexed at collectors seeming infatuation with auction houses for a large majority of the items that get sold there. For cards with a good supply and an easily established "market price", an educated collector could get more $$ consigning privately (shameless plug), or the same $$ selling outright to a reputable dealer wanting said card(s) for their inventory.