Why is shill bidding so bad?

[Archive]

Posted By: Kevin M

It is very naive to think that just because an auction item has a low minimum bid, that there is not a higher reserve.

Don't kid yourself, Shill bidding by auction houses in some form is a very common practice in all fields of collectibles. Usually, it is simply allowing the owner of the item to bid on it until it meets the reserve. If they win it back, they pay a small commission or none at all.

The reason these people do auctions is because it is easier to get consignments for auction, than outright sale. Most of the time people don't know the true value of their item and are more willing to auction the piece, especially if they are protected by the auction house.

How many people on this board are willing to put an item in Mastro, Lipset, etc at 1/10 of its retail value, unless they are being protected somehow? If auction houses didn't allow any type of shilling, they would find themselves out of business very quickly.