Analysis of current AH's rules regarding shill/internal/sketchy bidding practices

[ullmandds]

Originally Posted by x2drich2000

I do believe this is the first time I've seen Mile High have the right to bid in their own auction, but I know HA has had this in their T&C's for years. It seems like every 6 months or so HA name reappears regarding it. On the positive side, at least Mile High marked the lot as a pass, rather than just keeping the final bid "amount" displayed. I'm not sure how anyone could call either either HA or Mile High dishonest for this if it is in their T&C. To me it is quite simple, if you don't like the terms of their sale, don't bid.

On the other end of the spectrum, I know REA and LOTG specifically state employees can't bid and REA even goes so far as to tell you what lots are consigned by employees. I believe both also specifically state when a lot has a reserve.

I do not fault any of the auction houses that have such practices as long as they are stated upfront... I just have a problem with the artificial valuations!

[nolemmings]

If Auction houses or their employees are allowed to place bids, it seems reasonable to expect them to disclose when they have done so. At present, we are left to guess. At least by the end of the auction, and preferably beforehand, all bids placed by the house or its staff should be identified as such in the item's bidding history.

[insidethewrapper]

If an item has a reserve price , then that should be where the bidding starts, since the consignor will not take anything less. Seems simple to me. If the reserve is 100K, then the starting price is 100K. If you bid more than this, the highest bidder gets the item. Why secret reserves ?

[perezfan]

Originally Posted by insidethewrapper

If an item has a reserve price , then that should be where the bidding starts, since the consignor will not take anything less. Seems simple to me. If the reserve is 100K, then the starting price is 100K. If you bid more than this, the highest bidder gets the item. Why secret reserves ?

Agree... But their objective is to get lots of bidders competing for the item. So it behooves them to start it off low- knowing there’s no risk, given the hidden reserve. They feel that the more people who prospectively “take early ownership” of the item, the better chance of the price being driven up.

Does not make it right... just stating their rationale.

[x2drich2000]

Originally Posted by perezfan

Does not make it right... just stating their rationale.

I understand what you are trying to say, but honestly, that's just the AH doing what they should be doing, trying to get the most money for the consignor. The more people are bidding, competing, and raising the price, the better the AH is doing for both themselves and the interest of the consignor.

[perezfan]

Yes, and that's exactly what I want as the consignor.

As a bidder, it's a different story!

[steve B]

A local antique auction I used to go to had something similar.

They would announce just before starting that the people helping out were dealers, and were allowed to bid on items. It was mostly because without allowing them to bid they wouldn't get any qualified help. (I always figured it was because they asked friends to help since they'd be there anyway. )
Each had a specialty, and would rarely bid on any other sort of item. One was a doll dealer, and usually won. A couple of the others had shops that I'd been to and saw items for sale that they'd won a week earlier.

On the face of it it did seem a bit shady, but I never got the impression that it was anything but what it was announced as.

[aljurgela]

Originally Posted by nolemmings

If Auction houses or their employees are allowed to place bids, it seems reasonable to expect them to disclose when they have done so. At present, we are left to guess. At least by the end of the auction, and preferably beforehand, all bids placed by the house or its staff should be identified as such in the item's bidding history.

+1 (though I think that the REA / LOTG policy is best)

[Peter_Spaeth]

It doesn't seem anyone can identify another AH that bids on and wins lots out of its own auctions.

[calvindog]

You mean besides Mastro?

[Peter_Spaeth]

Originally Posted by calvindog

You mean besides Mastro?

Currently active.

[benjulmag]

This topic has come up before in other threads, but I have never been comfortable with an AH competing against its own customers by buying on the house account lots the AH feels are undervalued. A consignor can protect him/herself via a reserve price, and it seems to me that if the consignor is okay with letting the item go at a "wholesale" price, then the party that should reap the benefits is the AH customer, not the AH. The primary business of an AH is auctioning items, not buying undervalued items in its own auctions. And the profitability of the AH is directly tied to the business its bidding customers give them. So would it be so bad once in a while if a customer walked away believing he/she got a bargain?

I remember recently when I bought an item from a major AH. The item went for significantly less than both I and the AH thought the item was worth. But it met the reserve and I got it. The owner of the AH told me after the auction that while he felt bad his consignor did not get a stronger price, on the other hand he felt happy for me that I was able to get it at that price. That auction house does not buy on its account, and at least it could say its consignor's loss was its bidding customer's gain.