Auction Reserves - let’s discuss

[Al C.risafulli]

We try and avoid reserves, but occasionally it's understandable (we've got two items in our current auction with reserves).

We periodically do customer surveys, just to make sure we're on the right track and we're meeting or exceeding the expectations of our bidders and consignors. We've asked questions about reserves, and found that 50% of our customers WILL NOT BID if there is a reserve - whether the amount of the reserve is disclosed or not.

Count me in the camp of folks that believe that low opening bids and no reserves is the best way to encourage bidders to get involved. In the eyes of most bidders, high opening bids and reserves are impediments, and I've got 11 years of anecdotal evidence to argue both cases.

When we do reserves, we insist that the reserve be a reasonable number, and then we disclose the amount of the reserve about a week before the auction closes, and then we bring the bid up to the reserve so that the next bid meets the reserve. Even still, sometimes items won't meet the reserve.

We do not charge the consignor the equivalent of the buyer's premium because we don't offer the use of the reserve as a way to go fishing for a high price. I understand a consignor wanting to mitigate downside risk by placing a protective reserve on an item, and I'm (reluctantly) happy to support that, even though I try and caution against it because I think everything that mitigates downside risk also reduces upside potential. We don't do hidden reserves, and we don't do "fishing" reserves, so there's no reason to charge the consignor, in our case.

-Al

[parkplace33]

Originally Posted by Al C.risafulli

We try and avoid reserves, but occasionally it's understandable (we've got two items in our current auction with reserves).

We periodically do customer surveys, just to make sure we're on the right track and we're meeting or exceeding the expectations of our bidders and consignors. We've asked questions about reserves, and found that 50% of our customers WILL NOT BID if there is a reserve - whether the amount of the reserve is disclosed or not.

Count me in the camp of folks that believe that low opening bids and no reserves is the best way to encourage bidders to get involved. In the eyes of most bidders, high opening bids and reserves are impediments, and I've got 11 years of anecdotal evidence to argue both cases.

When we do reserves, we insist that the reserve be a reasonable number, and then we disclose the amount of the reserve about a week before the auction closes, and then we bring the bid up to the reserve so that the next bid meets the reserve. Even still, sometimes items won't meet the reserve.

We do not charge the consignor the equivalent of the buyer's premium because we don't offer the use of the reserve as a way to go fishing for a high price. I understand a consignor wanting to mitigate downside risk by placing a protective reserve on an item, and I'm (reluctantly) happy to support that, even though I try and caution against it because I think everything that mitigates downside risk also reduces upside potential. We don't do hidden reserves, and we don't do "fishing" reserves, so there's no reason to charge the consignor, in our case.

-Al

Appreciate the ground truth, thanks Al.

[Exhibitman]

As long as the AH is a quality one (hi, Al), I don't see the need for a reserve. Word will get out to the necessary bidders and quality will bring quality 99%+ of the time. As a bidder, I am with Jay on the issue: I bid what I want and if the card doesn't work for the seller at that level I move on.

[MVSNYC]

Reserves deter bidding. Period.

[Snapolit1]

If something was my gold standard, like I want this to fund my retirement kind of piece, I’d be terrified that it would somehow magically fly under the radar and crush me. Rational mind tells me that wouldn’t happen. But I’d be awfully worried. Maybe with my dumb luck someone offers a slightly nicer version in an other auction next week and now I’m totally in a panic …..

Can understand why a consignor might insist on one in some cases.

I agree it takes the wind out of an auction many times.

[Peter_Spaeth]

A reserve is more honest than a consignor winning back a card and the price being reported as though a real sale had occurred.

[Aquarian Sports Cards]

Originally Posted by Peter_Spaeth

A reserve is more honest than a consignor winning back a card and the price being reported as though a real sale had occurred.

I actually would have to disagree with this sentiment.

First, if a consignor wins their own item it technically IS a sale. Of course since they are getting a portion of the sale they don't owe all that much on a percentage basis.

Second they are only one bid over what another bidder was willing to pay as opposed to the reserve method, especially as some auctions use it where they have the right to place an artificial bid up to the amount just below the reserve.

So if you have an item which has a reserve of $10,000 and it stalls at $4,000 and the auction company bids $9999 (or whatever the increment would be) and then one more bid is placed how is a sale $6000 more than the 2nd bidder was willing to go more valid than a sale to the consignor where it went one bid over what the 2nd bidder was willing to go?

To be clear, just in case, We don't allow consignors to bid on their own items, nor do we do reserves, so I'm not defending either practice for my own benefit. I don't believe either option is the best way for us.

[steve B]

I wouldn't be surprised if a major auction wanted something on an item with a reserve that didn't sell. Part of their value, perceived or real is the work involved in photographing describing and promoting that item. That's all work they have to pay someone for, so if the seller demands a reserve that won't be met having a way to at least defray that cost is sensible.

I am mixed on reserves. I don't really recall running into them at live auctions for items I wanted and could afford.
I did get them on Ebay sometimes, I didn't mind if the reserve was stated, or if they would reveal it when asked. But if it was treated as some big secret it generally put me off an item.

When selling, I used reserves maybe 4-5 times on things that were to me much better. In every case I was open about the reserve, and set it somewhere between what I thought the thing should sell for and what price I wouldn't be happy with. In all but one instance my reserve was so low it ended up being silly. Around 20% of the final price in one case.
The one that didn't make reserve, was an original frisbee still in the original package. The high bidder said the reserve was too high, and backed that up with links to sales on other sites that showed his high bid as slightly above average. I ended up selling to him at the high bid, which I was still happy with.

As far as using an auction house, to me it really depends on what contacts you have, and how you value your time. About 14 years ago I consigned some stuff locally. They took a big cut, but the only "work" I had to do was point what boxes and a rough idea of what was in each box.
Some stuff did about as well as I could have done. Others did much better. Overall, more results that were better than I could have gotten on Ebay, and almost none that did worse. A nice bit of cash for a few boxes of not necessarily valuable stuff. I did tell then that they had to take the 2-3 monster boxes of junkwax stuff if they wanted the better stuff, something we had a good laugh about along with the motebook of what I described as cards that used to catalog a couple bucks but don't anymore (I'd been buying stuff from them for decades, so it was for sure something we could laugh about. )