Auction Reserves - let’s discuss

[Rhotchkiss]

Originally Posted by GeoPoto

"High opening bids don't mix well with auctions requiring you have a bid in in order to bid in extended time."

I don't follow this -- isn't the only reason to be eligible for extended bidding so you can top opposing bids in overtime? Why would any bidder who wanted to bid in overtime be scared off by having to top the existing pre-overtime high bid?

I place dozens of bids on items I don’t really intend to go after in extended bidding. Having a bid in gives me the option to go after things at the end, depending on numerous factors, including the price at the time extended bidding starts. If the starting bid is real high, one may fear that they end up winning it at that price when the intent of bidding initial was not to win but to preserve the ability to bid later in the event you want to win it

[BobbyStrawberry]

Originally Posted by Rhotchkiss

I place dozens of bids on items I don’t really intend to go after in extended bidding. Having a bid in gives me the option to go after things at the end, depending on numerous factors, including the price at the time extended bidding starts. If the starting bid is real high, one may fear that they end up winning it at that price when the intent of bidding initial was not to win but to preserve the ability to bid later in the event you want to win it

But if you aren't interested in it even at the minimum bid price, why would you become interested in it later when the price would the same or higher?

[Aquarian Sports Cards]

Originally Posted by BobbyStrawberry

But if you aren't interested in it even at the minimum bid price, why would you become interested in it later when the price would the same or higher?

People put placeholders in on many more items than they will be able to afford if they won them all. It gives one flexibility at the end of the auction. If one lot goes past what they want to pay, they can go after something else they had a placeholder on. Back when I was an auction buyer I'd put placeholder bids in on 100 or more lots fairly frequently. High starting bids would certainly scare a lot of people away from this very common practice.

[jsfriedm]

Building off what Scott said, what really confuses me are minimum bids that are high, but not high enough. For example, a $5,000 minimum bid on a card valued at $25,000. It's not high enough to function as a reserve, because if it sold for 5K the consignor would not be happy. But it also might be high enough to deter people from putting a placeholder bid on it as one of 100 items, because it might take too much of their prospective budget. So why do it?

[BobbyStrawberry]

Originally Posted by Aquarian Sports Cards

People put placeholders in on many more items than they will be able to afford if they won them all. It gives one flexibility at the end of the auction. If one lot goes past what they want to pay, they can go after something else they had a placeholder on. Back when I was an auction buyer I'd put placeholder bids in on 100 or more lots fairly frequently. High starting bids would certainly scare a lot of people away from this very common practice.

Thanks for the response, Scott. I didn't realize that this was such a common strategy. Perhaps I'm unusual in that I don't usually place any bid that I wouldn't be comfortable with as the winning bid.

[Rhotchkiss]

Originally Posted by BobbyStrawberry

Thanks for the response, Scott. I didn't realize that this was such a common strategy. Perhaps I'm unusual in that I don't usually place any bid that I wouldn't be comfortable with as the winning bid.

This is why I usually bid right when an auction opens. I may place over $1mm or bids within the first hour. By the end of the day, I am high bidder on none of them, but I have preserved the chance to go after all of them in extended bidding. If I wait to long and the price is already higher (like a high staring bid) then I may not do a placeholder at that point bc odds I win it are higher and I am not sure I want to own it.

[BobbyStrawberry]

Originally Posted by Rhotchkiss

This is why I usually bid right when an auction opens. I may place over $1mm or bids within the first hour. By the end of the day, I am high bidder on none of them, but I have preserved the chance to go after all of them in extended bidding. If I wait to long and the price is already higher (like a high staring bid) then I may not do a placeholder at that point bc odds I win it are higher and I am not sure I want to own it.

Right, I take a similar approach. Plus, it's fun to enjoy that first day when you can fantasize about actually winning stuff for the price of that first bid!

[Aquarian Sports Cards]

Originally Posted by BobbyStrawberry

Thanks for the response, Scott. I didn't realize that this was such a common strategy. Perhaps I'm unusual in that I don't usually place any bid that I wouldn't be comfortable with as the winning bid.

I was left scrambling one time for a Hunt auction in the early 2000's. Got a ton of stuff WAY lower than I ever thought it would go. Ultimately it was good news, but was tense trying to get the money together lol.

[SyrNy1960]

Don't care for reserves, but will bid. I like high opening bid, no reserve. This way, I know what I'm willing to spend and the seller is letting me know what they are willing to settle with.

My Arod 1st Grand Slam Bat ended last night. I had an opening bid of $7,500 with no reserve. It ended at $8,250 hammer price, with BP $9,900.

I paid $3,500 for the bat in 2009. Knew I would be happy with at least $7,500+, so it's a win-win for everyone. Of course I wish it went a bit higher, but at the end of the day, I'm good.

[Fred]

I'm going to assume a consignor can tell the AH that they would like to ensure they receive a minimum amount for their consignments. In my mind, there's two ways to do that:

1) A reserve price (which to me isn't really an auction

2) A high opening bid

Do AHs disclose a reserve? I can remember bidding in an auction and I was high bidder at the end but I wasn't awarded the item. My assumption was there was an undisclosed reserve. Are AHs supposed to disclose if the lot has a reserve?

I'm going to guess that a consignor could set a minimum bid price for an item, but the auction house would have to agree to it. Also, does anyone know how AHs feel about a consignor setting an opening bid price?

[Rhotchkiss]

Originally Posted by BobbyStrawberry

But if you aren't interested in it even at the minimum bid price, why would you become interested in it later when the price would the same or higher?

I am interested in it enough to want to preserve the ability to pursue it on the last day of bidding. I only bid on things I may end up buying, albeit the likelihood of me going after some is pretty remote.

Scott, well said. Exactly. However there are numerous reasons one may decide not to pursue a card at closing, price and ability are only two of them; you could pick up a copy between start of auction and end of auction, you could give up
a project or decide you don’t want it, you can take a closer look and decide you don’t like it. Placeholders provide optionality.

Now, there are some auctions where you don’t have to bid on a lot before extended bidding in order to bid on it in extended bidding. I do not place placeholder bids in those auctions and I almost always wait until the end to place any bid