AH guys - ask me anything?

[Rhotchkiss]

Originally Posted by Casey2296

I may be wrong, but 20% gross margin before expenses doesn't strike me as a tremendous money making opportunity. Maybe the big boys turn a decent coin but the mid level guys, and their families in some cases, work their tails off year round to make a living.

+1

Phil, you fully speak for me on this thread!

[Casey2296]

Originally Posted by Rhotchkiss

+1

Phil, you fully speak for me on this thread!

I think that's why Al called his AH "Love of the Game" instead of "Love the Profit Margin".

[Orioles1954]

Originally Posted by Casey2296

I think that's why Al called his AH "Love of the Game" instead of "Love the Profit Margin".

Despite what some may believe but running an auction house isn't easy money. It is quite the grind and there are numerous expenses that aren't commonly taken into account. Regarding reserves, we tried expanding that option a few years ago but it didn't take off at all. In listening to our bidders, frankly, they hate bidding on any item with a reserve. It discourages bidding and end of auction competition. We have since phased out reserves and have at most 2-3 per auction.

[Al C.risafulli]

Most auction houses refuse to do Mimimum bids or Reserve auctions. Boo Hoo if the item doesn't sell. Most major auctions have a million in sales per auction. So what if one item doesn't sell. They make money either way whether your item sells for $10 or $10,000. Their interest is in protecting their butt and not the consignor's.

I don't refuse to do them. I strongly advise against them. I've got ten years of empirical proof that shows that items with reserves do worse than items without, and items with higher opening bids get less action than items with lower ones.

I did a customer survey a few years ago, and one of the questions dealt with reserves. 50% of the people surveyed WILL NOT BID if there's a reserve. Doesn't matter what it is, doesn't matter how the reserve works, doesn't matter how transparent it is. They won't bid. The people I surveyed were my actual auction bidders.

To see if it was true, I put a card of my own in one of my auctions. It was a $12,000 card. I put an $8,000 reserve. I opened the card at $2,000. Bidding stopped at $5,000, and it did not meet the reserve.

Two auctions later, I listed the exact same card, with the exact description, the exact layout in the catalog, and the exact same opening bid. No reserve. Card sold for $15,000.

My job isn't to protect my butt. My job is to work as hard as I can to get the highest price possible for my consignors, to advise them and counsel them as to the best way to sell their material, and to earn their trust through the quality of my company's performance. My job is to make sure that my consignors never question the amount of effort I put in to selling their items, and to present an auction that can get bidders excited. Every time something sells for less than expected, it reflects on my company. Every time something sells for more, it does as well. In no other industry I can think of are companies so intensely scrutinized and judged with each and every transaction. In that environment, protecting my butt is the least of my concerns.

Most of the time, when I run an item with a reserve, it doesn't meet the reserve. That doesn't help my consignors, and it doesn't get bidders excited.

This is a good thread. There are a lot of good questions in it. A lot of them are hard to answer in writing, I think, but I'd certainly be happy to sit and do an in-person Q&A with a group - maybe at the national?

-Al

[Orioles1954]

Originally Posted by Al C.risafulli

Most of the time, when I run an item with a reserve, it doesn't meet the reserve. That doesn't help my consignors, and it doesn't get bidders excited.

This is a good thread. There are a lot of good questions in it. A lot of them are hard to answer in writing, I think, but I'd certainly be happy to sit and do an in-person Q&A with a group - maybe at the national?

-Al

Truer words Al...It simply doesn't matter what the item is...reserves create the opposite of buzz. The same can be said with opening bids as well. When a potential consignor pushes for a high opening bid, despite showing them evidence that higher opening bids lead to lower prices, I often question if they will be happy with any result. Congrats on a good auction Al and we're hoping to have a good one tomorrow night as well. I think a Q&A would be fantastic.

[Al C.risafulli]

Thanks, James, always nice to see you. Hope all is well.

-Al

[Aquarian Sports Cards]

Originally Posted by al c.risafulli

i don't refuse to do them. I strongly advise against them. I've got ten years of empirical proof that shows that items with reserves do worse than items without, and items with higher opening bids get less action than items with lower ones.

-al

+1000 except I do refuse to do them.

[Sterling Sports Auctions]

At Sterling I do the same as Al, if I am willing I discourage them. I do do them on rare occasions but am not a big fan of them and agree with Al's assessment. The people that tend to ask for high minimums or reserves want you to be a retail store for them.

Even if I have a lot that does not sell there is always time spent to scan and list, an then either spend the time sending it back or relisting.

If I list a lot with a higher minimum it tends to be for items that are scarcer and I feel that they will get a minimum two bids. As Al said, it is better to have as many people involved in the bidding because you never know when you have multiple bidders that got to have that lot.

Feel free to call me if you have any questions that can be better discussed in person.

Lee Behrens

[Snapolit1]

I’ve had the same experience on eBay many times. List an item with an opening bid of $99 and nothing happens. List same item with opening bid of 99 cents and it gets 27 bids and sells for $179.

[Leon]

Originally Posted by Snapolit1

I’ve had the same experience on eBay many times. List an item with an opening bid of $99 and nothing happens. List same item with opening bid of 99 cents and it gets 27 bids and sells for $179.

I have had a very good hobby friend win something of mine in auction that I had forgotten to take off my for sale site. It was offered for less on my site. He asked, after the auction, if he could buy it for that price. I laughed....the answer was no.
.

[frohme]

Originally Posted by Sterling Sports Auctions

At Sterling I do the same as Al, if I am willing I discourage them. I do do them on rare occasions but am not a big fan of them and agree with Al's assessment.

[...]

Lee Behrens

I've always found your opening bids to be very reasonable, Lee... regardless of whether or not it was on a consigned item.