Auction Houses and blind bidding

[Runscott]

Originally Posted by Bored5000

Let me state upfront that I have never sold anything on eBay, but I would think the only people you would "catch" shilling their own auctions would be the very stupid or the very lazy. I mean, an account with "0" or "1" feedback or nearly 100 percent bidding pattern with one seller is bound to set off red flags.

Seems like it would be obvious and very easy to cover your tracks when shilling on eBay simply by buying and bidding on other cards besides your own.

Ebay allows it to simply be part of a seller's business model. Add it to that the fact that people right here on this board think it's perfectly okay, and there's really zero chance of stopping it. Some sellers have been so brazen as to send out spam emails (I received one), stating that they run only 99 cent starting bid auctions, and insinuating that those who use the BIN store model are somehow dishonest, while in fact, the BIN store sellers are the ONLY sellers who have no reason whatsoever to shill.

[MattyC]

So if I interpret the Molitor RC and 69 Ryan examples as intended... Anytime a card sells for less on eBay or elsewhere than it did at an AH, it is clear proof of nefarious practices by the AH?

That's some pretty specious logic there. It could be the reason, but there are many other factors that could account for a depreciation, and proving which one is at play is impossible.

Originally Posted by MattyC

So if I interpret the Molitor RC and 69 Ryan examples as intended... Anytime a card sells for less on eBay or elsewhere than it did at an AH, it is clear proof of nefarious practices by the AH?

That's some pretty specious logic there. It could be the reason, but there are many other factors that could account for a depreciation, and proving which one is at play is impossible.

Matt, the point is that it's simply safer to bid on ebay thanks to their semi-transparent bidding which makes it harder for shills to artificially inflate prices like they can with AHs and their blind bidding.

The results of these high value/profile cards support my position ... as does common sense.

[MattyC]

But if the seller of the Ryan wanted to shill it to value X on eBay, couldn't he do it just as easily through a shill or friend's account? Six here and a half dozen there, seems to me. A clever shiller can use a very convincing, inconspicuous account, rendering an eBay auction as compromised as any other.

When it comes to a card depreciating from AH to eBay, you can definitely choose to view that as proof supporting your position, but that is also conveniently ignoring all the other factors that could be contributing to the price drop.

End of the day, I just love cards and try and not to let stuff like this chafe me about my hobby. Life outside cards presens enough headaches.

[Bored5000]

Originally Posted by bubblebathgirl

Matt, the point is that it's simply safer to bid on ebay thanks to their semi-transparent bidding which makes it harder for shills to artificially inflate prices like they can with AHs and their blind bidding.

But that is just your opinion that it is safer to buy premium cards on eBay. A lot of people view eBay as being far less safe than an auction house because the number of people looking to rip you off or scam you on eBay is seemingly neverending. If I was looking to buy a $20,000 card like the Nolan Ryan card you listed or even a $5,000 card like the Robin Yount example you listed, I wouldn't feel comfortable at all buying off eBay.

I still don't get how it is harder for shills to inflate the price of a card on eBay if someone really wants to do that. Like I said earlier, the only shills you are going to "catch" are either the really stupid or the really lazy.

Originally Posted by Bored5000

But that is just your opinion that it is safer to buy premium cards on eBay. A lot of people view eBay as being far less safe than an auction house because the number of people looking to rip you off or scam you on eBay is seemingly neverending. If I was looking to buy a $20,000 card like the Nolan Ryan card you listed or even a $5,000 card like the Robin Yount example you listed, I wouldn't feel comfortable at all buying off eBay.

I still don't get how it is harder for shills to inflate the price of a card on eBay if someone really wants to do that. Like I said earlier, the only shills you are going to "catch" are either the really stupid or the really lazy.

Eddie, it's not just my opinion, it's a fact.

AHs have blind bidding with NO buyer protection. You can get bid up and you'd have no idea ... you can have an item delivered not as described (or not at all) and you have no recourse. Whereas on ebay you have buyer (and seller) protection.

Of course someone can try and inflate a price on ebay, but at least there are systems there that give you a chance in tracking down what's going on ... with AHs you have none such ability ... you are simply helpless.

It's just easier to shill via AHs than it is on ebay. If you don't mind taking that chance that's your prerogative, but there are countless examples of premium cards taking hits on ebay that were bought via AH. I myself have picked up some items in such a way.

Ultimately it's just common sense, information is power and with AHs you have none of it.

[Bored5000]

Originally Posted by bubblebathgirl

AHs have blind bidding with NO buyer protection. You can get bid up and you'd have no idea ... you can have an item delivered not as described (or not at all) and you have no recourse. Whereas on ebay you have buyer (and seller) protection.

I am not trying to be argumentative, because it is apparent our basic opinions are very different. But an auction house that doesn't deliver cards people have paid for or consistently misrepresents what people are buying (i.e. shipping reprints depicted as real cards or consistently selling phony items like a Coaches Corner) will either go out of business like Mastro did or get a reputation as a place to avoid.

You keep talking in absolutes that the reason the cards you have cited sold for more at auction houses than eBay is because of shilling at the auction houses. I don't know the right answer -- and no one does -- but it seems just as viable to me that auction house prices are higher because each product is put in front of a greater number of potential buyers and a lot of people just don't want to deal with the scammers and rip off artists that so heavily populate eBay.

[murcerfan]

Then again you might consider that anyone paying a premium for PSA 9 and PSA 10 Topps cards has more money than sense. Bar graphs, sales history diagrams and conspiracy theories aside, you buy a bubble and ...well, sometimes they go poof. Ask the Dutch about tulips. I also think some in the hobby now don't recognize the difference between reputible auction houses and e-bay.

[CW]

Originally Posted by Bored5000

I am not trying to be argumentative, because it is apparent our basic opinions are very different. But an auction house that doesn't deliver cards people have paid for or consistently misrepresents what people are buying (i.e. shipping reprints depicted as real cards or consistently selling phony items like a Coaches Corner) will either go out of business like Mastro did or get a reputation as a place to avoid.

You keep talking in absolutes that the reason the cards you have cited sold for more at auction houses than eBay is because of shilling at the auction houses. I don't know the right answer -- and no one does -- but it seems just as viable to me that auction house prices are higher because each product is put in front of a greater number of potential buyers and a lot of people just don't want to deal with the scammers and rip off artists that so heavily populate eBay.

I would also add that an auction house auction may also get more bids over an eBay auction due to the format. In an auction house auction, the bidders have the ability to outbid each other during extended bidding. Often times, this creates a more competitive atmosphere in which bidders attempt to outbid the next guy to win the card. Nobody wants to be outbid, and extended bidding allows for a wallet measuring contest. On eBay, it ends at a certain time and that's it.

Also, while it may be easier to transparently shill an auction house auction, it's also more risky. In an auction house auction, you cannot retract a bid, and once you bid you must pay (no simply backing out like on eBay, and no bidding an auction up only to retract your bid like on eBay). A winning shill bid in an auction house auction also has to pay BP, so it's more risk in that sense also.

[bobfreedman]

Originally Posted by bubblebathgirl

Eddie, it's not just my opinion, it's a fact.

AHs have blind bidding with NO buyer protection. You can get bid up and you'd have no idea ... you can have an item delivered not as described (or not at all) and you have no recourse. Whereas on ebay you have buyer (and seller) protection.

Of course someone can try and inflate a price on ebay, but at least there are systems there that give you a chance in tracking down what's going on ... with AHs you have none such ability ... you are simply helpless.

It's just easier to shill via AHs than it is on ebay. If you don't mind taking that chance that's your prerogative, but there are countless examples of premium cards taking hits on ebay that were bought via AH. I myself have picked up some items in such a way.

Ultimately it's just common sense, information is power and with AHs you have none of it.

Paul, I run the software for most of the major sports auction companies and I can say that after reading all of your posts that you don't know what you are talking about. None of the companies that use my software can see the max bids therefore they cannot shill or bid up items.

Also, If you think that it is safer to bid on eBay, where you do not know whom you are buying from, than an auction company, then you are not being very truthful. Most of the auction house DO accept returns where and when appropriate.

You cannot compare eBay prices to AH prices as well as well, they operate differently and most of the big bidders will never bid in eBay and place their trust in knowing who they are bidding with at the AH's. not to mention that your example does not take into consideration that the person who is selling the item is no longer bidding on the item so you lose one of the competing bidders that drove the price to the level that it sold at.

Those are the facts.

[whitehse]

Originally Posted by bobfreedman

Paul, I run the software for most of the major sports auction companies and I can say that after reading all of your posts that you don't know what you are talking about. None of the companies that use my software can see the max bids therefore they cannot shill or bid up items.

Also, If you think that it is safer to bid on eBay, where you do not know whom you are buying from, than an auction company, then you are not being very truthful. Most of the auction house DO accept returns where and when appropriate.

You cannot compare eBay prices to AH prices as well as well, they operate differently and most of the big bidders will never bid in eBay and place their trust in knowing who they are bidding with at the AH's. not to mention that your example does not take into consideration that the person who is selling the item is no longer bidding on the item so you lose one of the competing bidders that drove the price to the level that it sold at.

Those are the facts.

Dont let facts get in the way of a good paranoid idea!!

Originally Posted by bobfreedman

Paul, I run the software for most of the major sports auction companies and I can say that after reading all of your posts that you don't know what you are talking about. None of the companies that use my software can see the max bids therefore they cannot shill or bid up items.

Also, If you think that it is safer to bid on eBay, where you do not know whom you are buying from, than an auction company, then you are not being very truthful. Most of the auction house DO accept returns where and when appropriate.

You cannot compare eBay prices to AH prices as well as well, they operate differently and most of the big bidders will never bid in eBay and place their trust in knowing who they are bidding with at the AH's. not to mention that your example does not take into consideration that the person who is selling the item is no longer bidding on the item so you lose one of the competing bidders that drove the price to the level that it sold at.

Those are the facts.

I should believe you why?

And I didn't say it was the AHs themselves doing the shilling (though anything is possible) so get your facts straight.

Finally, AHs make their own rules, rules that support their interests first and foremost. On ebay, sellers have to all play by ebay's rules, rules that actually protect people on both sides of the deal. Maybe I can return an item with an AH if its NAD? Maybe?! Are you serious? You pay with check, MO or wire transfer for a reason with AHs ... it's so the buyer has zero leverage if something goes wrong.


CW,

All you need to make an AH account is a credit card. So you can shill as much as you want during a run of auctions, not pay for anything, and the worst that happens is your account is blocked.

Next auction just sign up with a new CC or get your friend to.


The point of transparency is to protect the buyer during the auction, and give everyone useful information after.

I know it strikes a nerve to dare challenge an institution that many have bought into and others have spent ludicrous amounts of money in. But the reality is that many premium cards have been bought from AHs only to take a dive when sold elsewhere ... there are countless examples and I have provided a few. So for those who have dropped serious cash in an AH setting, you've done so in an arena where you may have been shilled and you will never know - that's why there isn't as much confidence in the prices of cards that are acquired this way - and one of the reasons they sell for less when not in the same AH setting.

There are 2 major issues with AHs:

1. Transparency

2. Leverage

Both need to be addressed and fixed for the good of the hobby.

[BobC]

Going back to the OPs initial comments, it seems he was suggesting that AHs are possibly more prone/prevelant to have shilling and other improper activities occur in regards to their auctions than Ebay, be it the AHs themselves, or their consignors, responsible for the deemed illicit activities.

Others have pointed out that it is improper, and just not good business sense, for the AHs to be completely open in providing personal data on bidders and contacts they have, which is true. There is a possible solution that could be employed by AHs to impart a greater sense of responsibility in how they conduct their businesses and to show to bidders that they actively attempt to discourage and guard against shilling and other improper auction actions, and thereby instill greater trust amongst those who would use them.

The accounting profession for a couple decades has sanctioned a specialized type of audit that CPAs can perform to test internal controls and procedures of services organizations, specifically on the work/services they provide to their customers. It was originally supposed to be only when the customer was having an audit done on their own books but, after the likes of Enron and Bernie Madoff, people/companies began asking for these types of audit reports more often just to make sure they weren't getting screwed. The accounting profession just in the last couple years changed this specialized reporting and call it a SOC (pronounced - sock) report. Stands for Service Organization Control reports. An AH could hire a CPA/accounting firm to come in, review their controls and procedures around their auction/biddng process and see what they're doing to prevent/discourage shill bidding and other disreputable practices that people have concerns about. The CPA/auditor could then issue a report and describe the internal controls/procedures in place, actually run tests to see the controls/procedures are functioning as expected, and report on the same. The AH could then provide this report to users of their service to document what they are doing to prevent disreputable activities, without disclosing private information concerning bidders and business practices. The CPA/auditor is a licensed professional subject to confidentiality/ethics rules, and would not be able to disclose such private info and must maintain impartiality and independence with respect to the AH being audited.

Would not necessarily stop or always detect collusive activities or consignors from trying tricks but, at elast you would have an idea what the AH was doing to prevent such problems, and whether they were doing enough in your own opinion. It is a lot more believable than just hearing an AH say they are doing everything they can to prevent disreputable activities in regards to their auctions.

Bob C