Auction Houses selling their own stuff

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Posted By: Hal Lewis

In reading the various threads from the different auction houses, it seems as if the prevailing thought is:

"If you trust us enough to think that we are not shilling up the bidding on consigned items, then you should trust us enough to know that we would not do it on our own items."

BUT... there is one BIG problem with this school of thought that clearly renders it untrue and illogical.

There is NO WAY that an Auction House can "shill bid" on a CONSIGNED item without risking the chance that they will get stuck having to buy it themselves in the end.

In other words, if an Auctioneer owns a card and shill bids the card up, NOBODY will ever know if the auction ends without any REAL person having bought the card.

A real bidder may have bid $5,000... and the auctioneer may have bid $6,000 to try and coax a bid of $7,000 from the real bidder... but if the real bidder does NOT bid again, then the auction ends and the auctioneer just keeps his card to sell again later.

On a CONSIGNED item, there is a REAL CONSIGNOR out there who is fully expecting to receive $6,000 for his card when the auction is over. If the auctioneer was shilling and the real bidder never came back into the fight... then the auctioneer would have to either BUY the card for $6,000 or try to make up the BS story about the "high bidder backed out of the deal."

Surely NOBODY out there is still falling for that type of story, are they? The old "EBay second chance" type of crap?

SO... it is certainly a LOT EASIER and a LOT LESS DETECTABLE for auction houses to shill bid on their OWN items... and therefore I agree with everyone who thinks that FULL DISCLOSURE (even if just an asterik) is the ONLY way to go.

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Posted By: Hal Lewis

In fact, there is even a HUGE BENEFIT to the auctioneer who shills his item and then has his auction end WITHOUT the item auctually selling...

because now he owns an item that the REST OF THE WORLD thinks was just sold on the open market with competitive bidding for $XXX.

Now the auctioneer can turn around and CONSIGN his item to a DIFFERENT auction house (who will NOT have to disclose that they are selling their own item since they are not) and hope that people buy it for something close to $XXX because they ASSUME that this is the "fair market price" for the item.

This is why FULL DISCLOSURE IS NEEDED.


But then again...

what is to stop two auctioneers from selling each other's items (therefore no disclosure needed) and agreeing to shill bid up the prices for each other?

I guess we have to TRUST these folks at some point?

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Posted By: Joe D.

It is a sticky situation that gets stickier when various possible scenarios are thought of.

When things are going good - everyone likes and trusts the auction house people - and stuff like this is a non-issue.

But if something goes wrong, or if someone complains to a media outlet (about any issue in an auction) - the media would love to spotlight that the auction house has a potential conflict of interest, or that they are not a neutral party in the industry.

Disclosure ahead of time is worth its weight in gold if anyone tries to finger point later on.

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Posted By: Hal Lewis

Yep.

We all know that a real consignor CAN bid on their own items if they really want to do it... by just having a friend set up a bidding account and bidding for them.

BUT... in those situations... the "friend" has to pay the 20% buyer's fee on every item that he shilled and got stuck winning. This could get expensive.

That is NOT the case when an auctioneer is selling his own items in his own auction.

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Posted By: barrysloate

I agree with Hal and all the other people who posted that auctioneers should identify their personal lots, and I intend to implement this in future auctions. This of course brings up the next point: what prevents an auctioneer from putting a star next to some lots he owns and omit stars from others? Again, it comes down to honesty, and bidders learn who they want to do business with.

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Posted By: Joe D.

My whole thought process has been from the perspective of the auctioneer himself.

As an auctioneer I would prefer to disclose, and fully disclose....
because it is inevitable that there will be a disgruntled person somewhere at some time.

The less you can give someone to point to, or raise an eyebrow from, the better you look and the easier it is to defend yourself if any problem should arise.

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Posted By: Hal Lewis

Like Barry said: How will anyone REALLY KNOW whether the Auction Houses are disclosing or not?

The ONLY WAY that this could EVER be checked would be for our hobby to set up the "Police Squad" that was discussed previously...

and then getting the Auction Houses to allow the "police" to contact random consignors of ANY auction item in ANY auction to CONFIRM that it really does belong to someone other than the auctioneer.

Would I mind this as a consignor? No, not if the "Police Squad" was known and trusted in the industry.

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Posted By: E, Daniel

that is, the stickier you make it for someone to defraud, or lie, or whatever you want to call it, the more likely it is that they will foul up.
If you say that you disclose fully your own owned items being auctioned, and you don't, then someone, somewhere will ask the right question at a time most inconvenient to your memory, and the truth will out. Similarly with card doctoring.
Much the same with the current threads asking auction houses to tell us their stance on these issues.
Yes, they can lie.
But I absolutely guarantee that now the issue is out, and widely discussed, they (read their lawyers) will make changes going forward that meet the required collector expectations. While the question was never asked directly, they could feign belief that their actions were reasonable. Once disavowed of those pretences, to continue such practices and have NOBODY within or without their organizations 'out' them would be sheer gross living with the pixies and stupidity. They would be instantly out of business if found out, and probably have law suits lined up for retrospective justice that would take away their homes and lifestyles they so enjoy. Only a lunatic would go forward under those circumstances.
So, IMO, the process Jim has started is one of those magical bullets, which arrived from a source perhaps unexpected, at a time unforcast, but with enough billow to change the hobby.

Congrats Jim.

daniel

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Posted By: Hal Lewis

Of course...

the OTHER WAY of doing this would be for those of us on these boards to IDENTIFY which items in which auctions are OURS for sale!!

Why don't we set up a thread for each auction to let people know this?

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Posted By: dennis

if it is their own items and not from a consigner,should there be a buyers fee?

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Posted By: barrysloate

Hal- I like the "Police Squad" angle for a prime time TV show- a group of slick private eyes jet-setting around town checking to see that baseball card auctions are run on the up and up... and on a more serious note, polling consignors in an auction sounds good but some want privacy. You can't force a consignor to reveal himself. Maybe it all boils down to doing business with the people you feel most comfortable with.

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Posted By: Cat

Personally, I wouldn't want the Auction House releasing my name and phone number to anyone. If some how I did get a call asking: "Is that really your consignment in the XYZ auction?" they may be in for an expletive laden tirade like they didn't know existed. The only reason I consign is for the Auction House to take over the hastles...not create them.

I was the underbidder on lot 47 in Barry's auction. I bumped the bid at least twice late in the evening. Finding out that he owned it, does not matter AT ALL to me.

Someone raised the issue that if you are a consignor and there is a similar item that is owned by Bill Mastro in the same Mastronet auction, will people gravitate towards his item. I think this issue has merit. There are four or five '52 Topps Mantles in the existing Mastro Auction. If you consign a PSA 6 '52 Topps Mickey Mantle card and yet the PSA 5 '52 Topps Mickey Mantle, which just happens to be owned by Bill Mastro, sells for virtually the same or more, wouldn't the consigner of the PSA 6 be pissed that buyers bid more agressively on the item owned by Mastro? What if Bill Mastro gets SGC to put his name on the flip like "The Nagy Collection" designation? That seemed to create a premium at least in that instance.

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Posted By: Richard

Damn you, Cat! Damn you!

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Posted By: Hal Lewis

I guess we can't have it both ways.

If we want to know whether the auction house owns the item for sale... we have to be willing to live with the possibility that someone will pay more for the "fame" of owning something that was owned by Mastro or Lifson or Sloate, etc.

Personally, I think it would probably be an even "wash" in that some people would NOT bid on the item for fear of being "shilled" by the auctioneer/owner... while a few might bid harder since the item must be "real" if it was owned by someone as knowledgeable as the auctioneer.

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Posted By: Larry

As Barry said very clearly, if you trust the auction house in general, those are the one's you should transact with, an educate buyer knows what they will finally pay, with or without BP...

It now seems that a good selling point for the smaller or larger auctions in the next year to note their own lots in a separate section or by asterisk as I first stated in the Clean Sweep Thread, and not because we should doubt their intentions, it is just good business if they restructure their business plan to disclose for their advertising benefit.

As far as buyer's premium on their own lots, that is now a new developement because the rationale behind a buyers premium on consignments is the consigned auction house has no margin unless the BP is instituted but if they own their own item, the bidding should go higher anyway so why is the juice necessary? Just a Thought!

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Posted By: Jeff Lichtman

Hal, I don't know that I necessarily agree that ownership by the auctioneer is the sole driver behind bidders' concern that the item will be shilled. As pointed out, the auctioneer has a vested interest in higher sales of all items being sold. What's to stop them from driving up the prices to the highest ceiling bids, period? Maybe auctioneers should be required to provide the names or at least the IDs for all underbidders, much like in ebay. In that way, we could contact the underbidders to ensure that no funny business occurred.

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Posted By: Cat

Well Richard you always know where to find a buyer when you get tired of it. I guess the mystery is solved as to if I was bidding against Barry or not. (Sorry Barry! But I had to. )

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Posted By: Hal Lewis

Good point about the underbidder ID, Jeff...

but then again, a shill would just e-mail you back and pretend to have been a legitimate buyer.

But as someone else said... it would make it somewhat stickier and trickier to deceive the public...

so it would be a good step.

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Posted By: barrysloate

Cat- I'm glad you did find out who you were bidding against so that you didn't have to wonder whether it was the house. That said, I am sick and tired of this whole thread. This is not about an auctioneer listing which lots he owns, this is about assuming that all auction houses shill and run bidders up. I am getting fed up with this Bu****it and if everyone is so concerned that all lots are run up then I suggest you all find another hobby. This paranoia about who owns what lots is just another way of everyone saying every auctioneer is a potential crook and whatever other negative energy can be thrown out there. Frankly, I changed my mind on this issue. It's none of anybody's god damn business what lots I own. If you choose to bid in my auctions, I welcome you and will treat you with respect. If anybody thinks I or any other auction house is shilling their bids, please email me privately and request that I take you off my mailing list. Since Doug posted on Saturday this board has been a pretty depressing place to hang around. I think I might find something else to do. I understand that nobody has singled me out as someone who runs up bids but that is the vibe of this thread and nobody can deny it. This has become a hobby where it is assumed dealers are dishonest. I ask you: how does anyone even enjoy it anymore?

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Posted By: davidcycleback

Honest people act honestly and dishonest people act dishonestly. Switching rules doesn't change this. I don't have a problem with honest people selling their own items.

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Posted By: Jeff Lichtman

Barry, I think you need a NY dinner thread to get you back on track.....

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Posted By: barrysloate

You tell em, Jeff. If people need to know what lots I own what they are really saying is they don't trust me. So if that is the case, please let me remove your name from my mailing list. I save a stamp and printing costs. It works for both of us.

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Posted By: Trevor Hocking

Amen Barry!!! I totally agree with your last comments.

Trevor

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Posted By: Hal Lewis

Barry:

I hope you don't think that just because some of us don't trust EVERY auction house means that we don't trust SOME auction houses (like yours).

I was just agreeing with your statements about indicating which items were yours. If you now decide NOT to do this, I don't think those of us who trust you will hesitate for a second to keep dealing with you.

Then again, there are always new people entering our area of the hobby who do NOT know you from anyone else. It might be the newcomers who "expect" disclosure (since others are doing it) that are hesitant to bid without knowing you.

Sadly enough, regardless of your stellar reputation, I think you may be forced to disclose if everyone else is doing it. Sometimes the good guys get dragged into the mess because of a few bad apples.

And I know you are just "venting"... but your consignors probably don't want you to do anything that might drive off bidders either. I know you will do whatever the "right" thing is in the end. That's what makes you you.

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Posted By: scott brockelman

Thank you Barry for taking a stand in defense of yourself and the hobby as a whole. When this entire spanish inquisition is over, very little will have been proven or gained.

Scott

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Posted By: barrysloate

Thanks Hal, and yes, I was just frustrated and snapped for a moment. But there is too much negative stuff going on on half the threads on this board. I will repeat my original question: how does anybody enjoy the hobby in this climate? I think what is going down here stinks, and I don't like it. I am taking a break from this board, both posting and lurking, so this is the last you will all hear from me until I cool down. Thank you and good night.

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Posted By: Trevor Hocking

I beleave some auction houses can't get any of the great items they have with out buying them out right. I know there are some less honest auction houses out there but really how many of them are there? In my eyes not many. Maybe I am being blind here. I think you have to bid what you want to bid and it is that simple. Would it make that big of a differance to you if a auction house places a disclosure that they own said item and it was the last card you needed for a set or you have been waiting your whole collecting life for that item to show up? For me NO. I think that all of this is getting way out of hand and people need to that a deep breath and get back to doing this for the fun of it. I do know that we are talking about a lot more money for items these days but just bid what you can and that is it. These cards have been around for over 60 years. They are not going anywhere.

Trevor

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Posted By: Cat

Actually the last couple of days have been pretty funny for me. I get to see folks' paranoia, hot buttons, lack of trust and other personality traits that tell me that this hobby is really not that fun for them. I'm sorry but I am amused by that. As maybe some can tell by my avatars, etc. I really like to have fun with this. I have enough stresses in other aspects of my life to bring stress into my hobby.

I personally am 100% indifferent as to Auction Houses displaying what they own. Ryan Christoff does it and does not affect my bidding at all. I have bought from REA, Cubanbaseballauctions, Mastro, Goodwin, Lelands, Hunt, Scott Gaynor, Clean Sweep, and Andy Madec. I have also bid healthy and came up short in oldjudge (Lew Lipsett's), Huggins and Scott, and Barry Sloate's auctions. I have found them all to be trustworthy to my knowledge. Joe Sixpack that I may deal with on EBay is a different story.

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Posted By: Bruce Babcock

I wouldn't care if a card was consigned by Benedict Arnold if I could get it at the right price.

On more than a couple of occasions over the years (long before ebay and its phoney second chance offers) I've been called by a major auction house and been offered a lot when the winner renegged and I was the underbidder. It never occurred to me that the house may have been the actual owner of the lot.

I've also gotten partial refunds from auction houses when the lot was not as advertised. For example, finding some erased pencil marks in a group lot. I always assumed that this happened because it slipped throught the cracks, not because a consigner or auction house was trying to deceive. And the auction house never demanded that I prove my claim. I guess they trusted me.

On the other hand, I also discovered that SCD Customer Service logos mean zip. They would have you believe that the logo means "Dealer XYZ has never received a compaint" when it really means "We don't investigate complaints against Dealer XYZ."

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Posted By: joe

I myself don't care if the auction house owns and sells the item. I do know that in the last few days in numerous threads I have seen a lot of paranoia. SP? I think I would have liked to see more activity with collecting vintage cards and maybe a poll/study done outside, separate from the forum about grading, altering and auction houses selling their own merchandise. Then in 1 posting the results could be printed out and anyone or everyone could have posted their thoughts. Maybe just me.

Joe

Ty Cobb, Spikes flying!

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Posted By: Ricky Y

"I wouldn't care if a card was consigned by Benedict Arnold if I could get it at the right price."

I guess I am partial to that statement as well....

For all I know perhaps some items I have won over the years have been bid up or shilled...but in the end I was willing to pay for that card "up to" a certain amount irregardless and still be happy with it... and so far I haven't regretted 99% of my purchases...

Ricky

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Posted By: davidcycleback

Many to most consignors don't want their name listed in the catalog and their phone and home address available to bidders and potential bidders. If I had a $200,000 item, I wouldn't consign it to an auction house that give out my name, phone and address to anyone on their mailing list. I don't know what kind of moat Hal has around his house, but most people don't want it known that $200,000 items come from their homes and quickest route to get there.

And I'm also sure bidders and consignors won't be thrilled to get 11 pm phone calls from people asking them to verify that they aren't related to so-and-so or work for such-and-such. Even if you think it's a good idea, auction houses will never pass out the phone numbers of bidders and consignors to anyone who's interested in a lot.

The best thing for a collector to do is to have an idea of value and what one is willing to pay, and be willing to let someone else have it if it goes much higher. If someone outbids my max by $500 for something I like, I don't feel bad. If they want to pay that much, they can have it. My favorite was when I placed a maximum $200 bid on a cool item. The next day I checked to see if I still had the high bid, half thinking I would, and it was at over $4,000. "Guess I won't be owning that," I thought.

You should never feel bad for losing to someone who bid too much. Or, in my case, being out bid by 19x.

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Posted By: Hal Lewis

I never said that the consignor's information would be available to the public.

All I said was that I wish there was some way that a trusted source could confirm that someone really did consign the item.

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Posted By: davidcycleback

Hal, I don't lie or shill or cheat or have people shill. But if, as a bidder or consignor, an auction house told me I might be getting a phone call or two to verify who I am and what I own in the auction, I wouldn't would tell the auction house they won't be receiving my business. If Amazon.com told me I would get a phone or two call after placing an order, I'd buy from Barnes and Noble.

If someone at the auction house asked me, as consignor, to respond to a bidder who had a question about the lot itself (provenance, age, other), I would not have a problem-- though perhaps I would prefer to relay the answer through the auction house employee ... In the past, as indpendant outside expert, I have fielded authenticity questions via telephone from auction houses about current lots, with the employee relaying the answers via phone to the bidders. Sometimes I had no clue who was the consignor or bidder. One time I knew who was the bidder.

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Posted By: Hal Lewis

I, too, have seen this done in the past.

One time I was wondering how my max bid got driven up but not exceeded... and Mastro was kind enough to have the underbidder (Pat Preece) contact me to verify that he did exist and that I was NOT shilled.

VERY professional move by Mastro! Removed any doubts that I had about using their "max bid" feature.

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Posted By: Dylan

I think that people in this world have to expect the worse, when in comes to money, so anything that an auction house or seller can do to make his operation as transparent as possible does nothing but instill more faith in his buyers, and me. -just my two cents-