SUBJECT: BEWARE Steve Verkman, Keith Vari, Leland’s, Clean Sweep & Paragon auctions

[Peter_Spaeth]

Originally Posted by jayshum

Sure, there are other avenues a seller has, but they all have pros and cons. Not everyone wants to deal with trying to sell things themselves. Even if they do, finding the way to get the most exposure to the right people can be challenging. Posting on net54 is free but what percentage of the card collecting community does it actually reach?

IMO for any non-elite cards there are better ebay options which is what I do. Exposure not an issue obviously.

[jayshum]

Originally Posted by Peter_Spaeth

IMO for any non-elite cards there are better ebay options which is what I do. Exposure not an issue obviously.

Ebay obviously works for a lot of people, but there are also plenty of complaints posted here about it. Like I said, there are pros and cons to every method of selling. It comes down to what an individual seller is most comfortable with.

[rand1com]

Anyone who thinks auction houses can survive on a 20% BP with no seller fees is naive. Maybe a very small operation with low OH could but I doubt it.

Of course, if you consign a single $100K item, they will give you no fee and possibly half of the BP because they do virtually nothing for $10K on their end.

It all depends on the amount of work and expense they incur that establishes any seller fees.

In this case, based on minimal known facts, it appears a lot of time and money would be spent to bring the collection to auction. Is 40% unreasonable. Not in my opinion and yes, I realize it is in the minority on this forum.

The consignor certainly had the right to refuse the offered terms and negotiate with other auction houses but did not choose that route before signing the dotted line on this contract and now thinks he was mistreated.

We can always come up with excuses for making bad decisions but most of us have to live with them. It is called a life lesson.

[Aquarian Sports Cards]

Originally Posted by rand1com

Anyone who thinks auction houses can survive on a 20% BP with no seller fees is naive. Maybe a very small operation with low OH could but I doubt it.

I would say it's HARDER for a smaller auction house as we're not taking in 6 and seven figure items that give us leeway on commission on the smaller items.

Originally Posted by rand1com

Of course, if you consign a single $100K item, they will give you no fee and possibly half of the BP because they do virtually nothing for $10K on their end.

Agreed (well I take minor exception to "do virtually nothing" but I agree with the overall point)

Originally Posted by rand1com

It all depends on the amount of work and expense they incur that establishes any seller fees.

Right. 1000 lots with a value of $100,000 can EASILY take 100 man hours to sell. One $100,000 lot takes an hour, tops.

[notfast]

Originally Posted by Aquarian Sports Cards

Right. 1000 lots with a value of $100,000 can EASILY take 100 man hours to sell. One $100,000 lot takes an hour, tops.

Just using this as an example…thats $400/hr for that work that AH would do…Using the terms in this deal.

And then the BP.

[bnorth]

Originally Posted by notfast

Just using this as an example…thats $400/hr for that work that AH would do…Using the terms in this deal.

And then the BP.

Without that how would you expect them to live the lifestyle they do? You don't live like that on $20 an hour.

[Aquarian Sports Cards]

Originally Posted by bnorth

Without that how would you expect them to live the lifestyle they do? You don't live like that on $20 an hour.

$400 an hour for a company is not $400 an hour to one person.

[Aquarian Sports Cards]

Originally Posted by notfast

Just using this as an example…thats $400/hr for that work that AH would do…Using the terms in this deal.

And then the BP.

Obviously your math is right. My emphasis on EASILY was meant to communicate that it would likely be more hours. Using our auctions as a yardstick we average about 1200 lots per auction and right around $100,000 per auction. We're more likely in the 200+ man hours neighborhood per auction between sorting, lotting, writing, photographing and packing/shipping. That DOESN'T take into account pick up time and expenses, marketing efforts from reaching out to media outlets, doing social media promotion and graphic design for print ads etc. which are all still directly related to that particular auction so it could easily be sneaking up on 300 hours. That's as opposed to just general expenses like advertising rates, rent, utilities, software fees (do people realize that most auctions pay a percentage of the take to the software company they deal with?) etc...

When I do a formal appraisal (for insurance, or legal purposes such as estate situations of divorce) I charge $150/hour and that work is much easier than auction prep.

If it really was two truck loads it was likely a LOT more than 1000 lots, and we don't really have a firm idea on value, but if it's 5000 lots worth $200,000 it changes the math pretty quickly.

The point I'm trying to make is, it's a lot more work than people realize. It's work that also can't be done by just anyone. Believe me we've tried to hire cataloguers and tried to train existing staff, it's a colossal pain. The amount of expense in running an auction is MUCH greater than people seem to believe. People think "Wow, no inventory costs, the business is pure profit." It's just not the case.

We don't have enough good information to determine if this was a fair deal or not, but I have to say (as I've already said) it doesn't sound crazy to me.