Auction Reserves - let’s discuss

[gunboat82]

Do we know for certain that Heritage is actually charging the consignor the BP when reserve items don't sell, as opposed to simply reserving the right to do so?

[jsfriedm]

As I posted in your original threat on the Mantle, at first Heritage actually posted a reserve of 320, and only revised it down to 280 last night.

[brianp-beme]

Originally Posted by jsfriedm

As I posted in your original threat on the Mantle, at first Heritage actually posted a reserve of 320, and only revised it down to 280 last night.

Without diving into this matter too deeply, the judicial system does not take lightly threats directed at others, including, but not limited to, deceased baseball hall of famers.

My advice is that the original poster of the threat upon The Mickey Mantle consider issuing both a retraction and apology.


Brian

[Rhotchkiss]

Originally Posted by gunboat82

Do we know for certain that Heritage is actually charging the consignor the BP when reserve items don't sell, as opposed to simply reserving the right to do so?

I don’t know in this specific case. But I know people who have been charged by Heritage the BP on reserve lots that did not sell. My gut is that it’s intended partly as a disincentive to put a reserve. I have no issue with the practice - the AH did its end of the bargain and should he paid. As with everything, I bet it’s all fluid and negotiable; the mantle reserve has already been dropped $40k.

[brunswickreeves]

I’m surprised to hear HA agrees to a reserve (maybe for items expected to exceed a certain level?) My understanding was they would not support this and instead set the opening bid at a fraction of the expected hammer price. This enables buyers to get into the game and enjoy a vigorous auction process. The points of unsold items with set reserves seems to substantiate this position.

[Leon]

Reserves don't bother me. I very rarely win one that has one, but that is the consignors choice. When I sold my first collection through HA there were no reserves. That's a true auction.
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[Aquarian Sports Cards]

As an auction we don't do reserves. We feel it stifles bidding. Yes, we do lose consignments because of that, but we feel in the long run the more comfortable our bidders are, the better our consignors will do.

[BobbyStrawberry]

Auctions with reserves are the "listening to offers" posts of auctions.

[oldjudge]

1. Like Howard said, if a reserve is not met that does not always mean that the seller is responsible for the BP. That is negotiable and my guess is that no smart seller would ever agree to shouldering the BP.
2. Reserves never bother me when I bid, just like BPs or taxes not bothering me. I know my all in limit and bid accordingly.
3. I don't think the Young will sell with that reserve because I think the all in price for the card with that reserve is more than the card is worth, not because it has a reserve.

[mrreality68]

I am not a fan of reserves but I can understand its usage in some cases.
Especially if the seller has a lot into the card. We all know these posted prices of cards sold publicly but do not know if the cards sold privately and if the seller has significant invested in it and is afraid of a loss. Perhaps the seller is “attached” to the card and is not willing to sell unless their price is met.

When you sell privately you have a price that you are willing to sell at and if others give offers you are not happy with you as the seller say No. you control your reserve since you decide when to sell it.

So if the seller wants to have a reserve and if the auction house agrees to it and they negotiate whatever they negotiate then they are all just playing by the agreed upon rules.
We may not like it but it is the right of the seller to sell or not sell as he chooses.
I agree with most no reserves usually means more bids and hopefully higher sale prices.
And as mentioned many auction houses do not do reserves and sometimes loses opportunities to sell certain items. Again there choice to have their auction there way.
Would love to see those items sold and go to a good collectors home. But potentially not and potentially redone another time.

[raulus]

There do seem to be different mechanics when it comes to applying reserves, which I think can lead to different results.

For example, some auctions advertise that there is a reserve from the start. Others wait until a couple of days before closing before disclosing that there is a reserve, and often even telling you what that reserve actually is.

My experience is that having an unknown reserve (i.e. you know there's a reserve, but have no idea how big it is) from the start has a chilling effect on the bidding, where many bidders won't even bother, because they assume the reserve is so high that it's impossible to get there. On the other hand, having a reserve that sneaks up on you suddenly a couple of days before closing can also stifle bidding, but at least it gives the market a chance to first see if it can clear the reserve before it ever kicks in. Plus if you know what the reserve is, then you can always make an informed decision about whether it's worth continuing to bid, or whether you should just abandon all hope.

Some auctions will basically let you bid at the reserve price unilaterally. Others require that you need a partner in crime to bid against you to get up and over the reserve price.

My experience is that if you need a partner in crime, then it's probably game over, because you can put in a fat bid, but when everyone else gives up, then forgeddaboutit. If you can hit the reserve price unilaterally, then at least you have the option to go there if you really want to.

I've recounted the story here before (although I can't seem to find it to just copy/paste now) of a 52B Mays in PSA 9 that went to auction in late 2021/early 2022. It first came to market with a reserve. Bidding was going strong, and reached $100k+. Then the reserve popped at $200k ($240k with the juice) a couple of days before the auction finished, and everyone gave up. Since this was one of the AHs that let you unilaterally bid at the reserve amount, I toyed with the idea of putting in a bid at $200k, but couldn't bring myself to do it. Naturally, it went unsold.

A couple of months later, the exact same card on the exact same AH platform came up again, this time without a reserve. Things went similarly up until the last couple of days. No reserve this time. And then the price went absolutely nuts in the last day. Price doubled, then doubled again. Next thing you know, the final price (with the juice) ends up at $444k.

Bottom line for me is that if you're going to do an auction, then do an auction. Adding a reserve just seems to really screw with the whole flow and animal spirits that are the key element in the auction format. If you really want the certainty of getting your sales price, then sell it using a BIN, a private sale, or a high starting bid on eBay. Trying to get the best of both worlds seems like you end up getting the worst of all worlds.

[hcv123]

1) I know for a fact that when a reserve is set, it does not automatically mean the consignor pays if the item doesn't sell - just another potential point of negotiation.

2) As a bidder I am generally dissuaded by reserves and have "moved past" some items with them. I believe when reserves are set too high (like in the case of the Young you mentioned) it hurts the item and potential sale. It almost becomes a "make me sell it" price, rather than a "what the market will bear" auction.

3) As a consignor (I admittedly consign very little), I understand the temptation in some cases to ask for a reserve and have done it a couple of times. While the items did sell, I was not really happy with the outcomes. More times I have sold without reserve and outside of a single instance of gross mishandling of an item by an auction house, have not been disappointed. I think the largest risk of no reserve is with cards with low demand - auctions depend on a fight.

4) I am still perplexed at collectors seeming infatuation with auction houses for a large majority of the items that get sold there. For cards with a good supply and an easily established "market price", an educated collector could get more $$ consigning privately (shameless plug), or the same $$ selling outright to a reputable dealer wanting said card(s) for their inventory.