Interesting thread on the non-sports board

[Exhibitman]

I call Bu*****t here. Reading Mr. Ivy's reply I note that the lack of a buyer's premium and lack of shipping costs gives Heritage an automatic 20%+ advantage over every other bidder. That allows it to bid a "wholesale" price that is 20% or more over the real wholesale price. In other words, a $120 card really costs me a base bid of $100 plus a BP and shipping cost of $20+ but it would cost Heritage only the base bid. If it decides a card is "worth" 60% of retail it could bid $72 on that $100 card. If it doesn't get it, well it just drove up the price for the buyer. If the card is hot or rare and Heritage decides it is worth 80% of retail to own it, Heritage could bid my full base bid, forcing me to go even higher, past the retail level, to get it.

I feel soooo used...

[HRBAKER]

Adam, exactly.

[calvindog]

Originally Posted by Exhibitman

I call Bu*****t here. Reading Mr. Ivy's reply I note that the lack of a buyer's premium and lack of shipping costs gives Heritage an automatic 20%+ advantage over every other bidder. That allows it to bid a "wholesale" price that is 20% or more over the real wholesale price. In other words, a $120 card really costs me a base bid of $100 plus a BP and shipping cost of $20+ but it would cost Heritage only the base bid. If it decides a card is "worth" 60% of retail it could bid $72 on that $100 card. If it doesn't get it, well it just drove up the price for the buyer. If the card is hot or rare and Heritage decides it is worth 80% of retail to own it, Heritage could bid my full base bid, forcing me to go even higher, past the retail level, to get it.

I feel soooo used...

This is a good point. That being said, at least it's revealed, unlike the rest of the great guys who are criminals instead of just unethical.

[teetwoohsix]

Out of the book "The Card",written by Michael O'Keeffe and Teri Thompson,page 180-181,regarding Robert Edward Auctions...........

Under the heading "No Conflicts of Interest" on his website,Lifson has delineated the ills of the industry,from auction houses that bid on material in their own auctions,to shill bidding,to selling their own wares at their auctions.

We are not dealers.Robert Edward Auctions will never place a bid on material in our own auction.Robert Edward Auctions will never purchase material outright to offer at auction.With Robert Edward Auctions,bidders are guaranteed that they never have to worry about the auction house bidding against them on any lot in the auction-EVER.With Robert Edward Auctions,bidders also never have to worry about secret hidden reserves-EVER.

You will never see a "Wanted to Buy" ad placed by Robert Edward Auctions....These firm policies translate directly into greater and well deserved bidder confidence,and in turn higher prices for consignors.Many auctions are run by dealers offering material they own.This common practice exposes consignors and bidders to numerous conflicts-conflicts which can and do cost bidders and consignors money,and can ultimately make bidders uncomfortable even participating in the auction.

These are conflicts that DO NOT EXIST with Robert Edward Auctions.

Under no circumstances does Robert Edward Auctions,LLC allow for a "house account" to bid on lots in the auction.Under no circumstances are executives or employees of Robert Edward Auctions,LLC permitted to place bids in the auction.Under no circumstances are consignors permitted to bid on their own lots.This is a consignment auction,conducted by Robert Edward Auctions,LLC on behalf of consignors.

Under no circumstance is material offered at auction by Robert Edward Auctions,LLC owned in part or whole by Robert Edward Auctions,LLC....Everyone likes an honest auction.


I thought this was interesting.I have no affiliation with them(REA),or with any auction house,for the record.

[bobbyw8469]

No..no lot in Legacy Rarirties had a reserve...the opening bid (minimum bid) was the reserve.....just something really smells funny, and I am not sure that I like it!

[PolarBear]

Exhibitman makes a good point.

The only way auction companies will stop is if people refuse to consign and bidders refuse to bid.

I doubt that going to happen though. Unfortunately, collectibles are a lot like drugs. Buyers just have to have certain things and the desire for those things overrides any sense of ethics or long term self interest. Dealers know this and have no incentive to clean up their business in order to make everything 100% ethical and transparent.

[vintagechris]

I once bid in an auction with a company I thought was pretty honest( I won't name them as I have no real proof they did anything unethical) basically they had several small autograph lots of less than 20 cards each. They were all worth about the same. I put in bids on them willing to pay between $100 and $150. To my horror on the last day of bidding I went to check my bids and noticed I had mistakenly put a ceiling bid of $1350 on one of them! I thought about calling them and telling them this but then just decided how much higher could it go for what I really wanted to pay for it?

So, the auctions end that night all selling for around $150 and how much do you think the one I screwed up on sold for? $570 and there is no way those cards were worth anything near that and I just had a hard time believing a legitimate bidder kept bidding that lot up and was willing to pay that much for them.

[Rob D.]

Originally Posted by vintagechris

I once bid in an auction with a company I thought was pretty honest( I won't name them as I have no real proof they did anything unethical) basically they had several small autograph lots of less than 20 cards each. They were all worth about the same. I put in bids on them willing to pay between $100 and $150. To my horror on the last day of bidding I went to check my bids and noticed I had mistakenly put a ceiling bid of $1350 on one of them! I thought about calling them and telling them this but then just decided how much higher could it go for what I really wanted to pay for it?

So, the auctions end that night all selling for around $150 and how much do you think the one I screwed up on sold for? $570 and there is no way those cards were worth anything near that and I just had a hard time believing a legitimate bidder kept bidding that lot up and was willing to pay that much for them.

Chris,

One of the things I've been fortunate to learn from a handful of posters on this board is that descriptions in an auction catalog can greatly influence selling prices. You might see totally out-of-this-world prices realized, and the reason might be the really cool descriptions in the catalog. Marketing is another thing that can drive up prices in an auction.

So maybe the write-up for the lot that sold for much more than its counterparts simply had a really great description, and maybe that one lot was marketed a lot better.

[vintagechris]

Originally Posted by Rob D.

Chris,

One of the things I've been fortunate to learn from a handful of posters on this board is that descriptions in an auction catalog can greatly influence selling prices. You might see totally out-of-this-world prices realized, and the reason might be the really cool descriptions in the catalog. Marketing is another thing that can drive up prices in an auction.

So maybe the write-up for the lot that sold for much more than its counterparts simply had a really great description, and maybe that one lot was marketed a lot better.

Anything is possible which is why I don't mention the Auction House but the write up was very generic only telling what autographed cards were in the lot and marketing I am pretty sure had nothing to do with it because each lot was really only worth about $150.

All the cards were from the same set as well. Basically someone consigned them as one large group and the Auction House broke them up in smaller similar lots to sell. The one I just happened to make the mistake on was the only one that got extra action. All the others sold for what they should have.

Needless to say I was sick to my stomach watching this happen. But it was a lesson learned as I always make sure to double check my bid before clicking now.

[JK]

Bobby,

My guess is that a bidder did place a straight bid at that level despite it being higher than the next bid increment. While we would all generally like to win items as cheaply as possible, as a matter of strategy, I know that some bidders will preemptively place a bid at a particular bidding increment in an effort to discourage further bidding. For example, lets say a card is worth $1100 and the current bidding is at $500. For the sake of example, lets say its a must own card and Im actually willing to pay more than fair value for the card - say $1400. Now, if I know that the card wont sell anywhere close to the next bid increment of $550 (or whatever it happens to be) and believe that it will at least sell for its fair value, I might, instead of placing the bid at the next increment, consider placing a $1000 straight bid. With the 20% BP added in, the card would sell for $1200 - more than the market value, but still less than what I'm willing to pay. My hope would be that the price, which is already higher than market value once you consider the BP, would discourage further bidding but allow me to pick up the card for less than what my maximum bid might be.

The inability to snipe, the extended bidding and the 10% (or more) bidding increments used by auction houses changes the typical "ebay" strategy of trying to pick everything up as cheaply as possible and not showing your hand until the last few seconds of an auction.

[rman444]

Originally Posted by Exhibitman

I call Bu*****t here. Reading Mr. Ivy's reply I note that the lack of a buyer's premium and lack of shipping costs gives Heritage an automatic 20%+ advantage over every other bidder. That allows it to bid a "wholesale" price that is 20% or more over the real wholesale price. In other words, a $120 card really costs me a base bid of $100 plus a BP and shipping cost of $20+ but it would cost Heritage only the base bid. If it decides a card is "worth" 60% of retail it could bid $72 on that $100 card. If it doesn't get it, well it just drove up the price for the buyer. If the card is hot or rare and Heritage decides it is worth 80% of retail to own it, Heritage could bid my full base bid, forcing me to go even higher, past the retail level, to get it.

I feel soooo used...

Adam -

I think a portion of the 20% is used to advertise, pay for the catalog and misc other expenses that they would not be able to recoup, so the house's advantage would be less than the full 20%.

[Exhibitman]

Those are sunk costs--expended regardless of whether they win the item--so it is not realistic to count them into the equation. But let's not forget that they would also have the benefit of the commissions that they charge to the sellers as well as all of the bids they run up but don't win, so I think their advantage remains very high.

All I can say is that when I am agonizing over that last bid increment I am no longer inclined to pull the trigger with Heritage but am inclined to instead formulate a single max bid at the start of the auction and walk away from their auctions if the card goes higher, as I do with auctioneers I distrust w/r/t shilling.