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

[Peter_Spaeth]

Originally Posted by robertsmithnocure

Yes they do. They forego the BP that the underbidder would have paid.

Not saying the practice or right, but they do indirectly pay the BP.

I see the point you and Corey are making about the economics. But I continue to think the concern about the house competing with its customers is a valid one from an optics viewpoint.

[Stampsfan]

It's more than just optics. Too much bad can go wrong. Some random thoughts that come to mind:

• Joe average bidder has to add a 20% premium
• HA employees have to add a 20% premium if they are bidding for their own collection
• The AH can bid on the same item at a 20% discount, which reduces the corporations profit for shareholders
• 20% profit for many business is a reasonably good markup on a wholesale price
• There is no wholesale price, as there is no "cost of goods" to the AH
• Using these rules, too many nefarious opportunities can exist for the auction house, such as:
  • Descriptions can be written to limit maximum bids, if the AH really wants to up the item
  • Descriptions can be written to limit maximum bids, if an employee collector really wants to up the item
  • Scans can be tweaked, the scanner glass not cleaned and leave a spot, or other games can be played with the item
  • No "purple sticker" (or type of equivalent) would be given to an item that may deserve one
  • Once the AH owns the item, improved descriptions can be written, or the item can be saved for, say, a "Platinum" type of auction.

I am in no way saying this happens at HA, but it certainly opens up too many possibilities for profiting at the consignor's expense at any AH.

Bottom line, if you are an AH, take the consignment, promote the sh*t out of it, and sell it to the highest bidder on the open market. That is your job. It is not to undermine a lot to resell it or undersell it when you don't own it.

This is my last comment on this issue, and I will not be taking any more questions.

[buymycards]

When the auction house purchases an item, the auction house TEMPORARILY forgoes the BP, until they place it for sale again, and when it sells, they will regain the BP.