Auction Houses-Going, Going..Gone?

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Posted By: Rich Klein

This economic situation is hitting some new card dealers/stores as well

From the CU Boards

< I finally spoke with **** just a few minutes ago, they are out of business. I was told they got upside down on their lines of credit and can't recover. I was also told that if you recently sent a check for payment those will be returned, and that he said that he has been on the phone with paypal trying to resolve the chargebacks. I asked if he would be refunding the credit card payments (which is how I paid), and he told me there was also a problem with the bank so that probably would not happen and that I should just file a chargeback with my credit card company.<br>
And from an article about long-time hobby veteran's Bob Brill's store closing

< For Brill, cash flow became an insurmountable issue in September when he received a letter from his credit card company saying the $20,000 limit on his card had been cut in half. He already owed the company $9,500 >>

Rich

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Posted By: rand

Jeff, correct me if i'm wrong. but isnt the definition of a ponzi scheme taking money from new investors and paying off old ones? i know its a bit more detailed than that BUT it has its similarities. i wonder how this will affect the rest of their auctions this year?

a friend of mine is still owed $900, he WON'T be sending them anymore material.

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Posted By: boxingcardman

Many of my clients have seen their lines cut or completely closed and others have had banks renege on financing that was negotiated and nearly in place. It is starting to kill smaller businesses. I've had one client scrap a planned additional location due to financing issues and another just get reamed by the bank on a refinance.

As far as auctioneers, the reason they do not accept electronic payments are twofold: (1) Just like many ebayers who hate paypal, they don't want to risk a chargeback and (3) simple greed: if they require paper payments, they can keep the cash as a float for however long they like and the consignors have virtually no recourse (as Jeff notes above, it is in effect a free short term line of credit for the auctioneer), and they save the credit card processors' fees. When you are scrapping for every percentage point of BP and commission, that structure is big in your planning...

Heritage is a pleasure to deal with in terms of payment; I guess at their size they don't worry about the credit card processing fees.

Sic Gorgiamus Allos Subjectatos Nunc

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Posted By: Jim VB

All auction house business is built on trust.

Consignors trust that lots they send in will be cared for, represented well in the auction, and, after the auction ends, payment will be timely.

Buyers trust that lots will be accurately described, and when they send in payment, merchandise will be shipped safely, and in a timely manner.

If that trust begins to erode, for whatever reason, that particular house faces serious problems.

The biggest houses can survive a little longer because of a broader customer base, but even they will suffer soon enough.

For all Bruce's doom & gloom, he's mostly correct on this one. Why would anyone send a consignment to an auction house with a sliding reputation?

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Posted By: NYHighlanderFan

Now this is what I call a good topic...I'm glad I'm a collector and not really a seller!!

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Posted By: David Atkatz

Here we go! A bit more doom and gloom. ("Only a war can save our asses now.") And then:

"We will look for opportunities- but only for the items on America's Toughest Want List"

Come one, come all. Step right up, ladies and gents. I'm sure y'all have "opportunities" to offer.

Better hurry.

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Posted By: boxingcardman

This is an interesting topic, on point for once, and I'd like not to see it degenerate and get locked.

Sic Gorgiamus Allos Subjectatos Nunc

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Posted By: Rob D.

Ditto.

Please.

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Posted By: Dan Bretta

So if Mastro falls off the map who takes up the slack? Is there already too much saturation in the hobby that one less house won't even be noticed?

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Posted By: JohnnyH

This is a very interesting topic. I don't really think the economy can be blamed for any houses going under, bad business and poor customer service sounds like the the real culprit. One thing I think this says is that maybe the hobby is not growing. It only takes 2 people who want a card to make a great sale. If someone has a bad experience and wont deal with a particular house or seller the results can end up catastrophic in the terms of final price. I don't think that the economy has that big of an effect on the average collector, but wonder how age factors in this equation as many bigtime collectors are near retirement or retired and some may have just lost a huge chunk of their nest egg and cards may have to take a backseat. I do think some major collections will be sold due to layoffs and property and business failures but many buyers will be waiting with the cash. It seems like true collectors are being replaced by card daytraders with no real regards to the hobby and it is slowly taking a toll. On a side note, silver may go to 30.00 soon but wont last if it does and it also weighs a ton......

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Posted By: Rob D.

Brockelman & Luckey Auctions open for business in mid 2008.

Rumors of the demise of Mastro Auctions peak in early 2009.

Coincidence?

I think not.

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Posted By: Scott Mt. Joy

I already felt there were too many and I dont think 1-3 failing even if they are the biggest will make any difference on the market. I honestly think houses like REA, Sloate, B & L and a few others are in a great position to expand if any do fail. They have done what the others have not and that is I trust them.

In the long run- good companies prosper, bad companies fail.

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Posted By: David Atkatz

"In the long run- good companies prosper, bad companies fail."

Would that the world were that simple.

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Posted By: barrysloate

Scott- appreciate the support but right now I am on hiatus, and not sure when or if I will do another.

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Posted By: marshall barkman

Jim Vb you stated.....All auction house business is built on trust.

Consignors trust that lots they send in will be cared for, represented well in the auction, and, after the auction ends, payment will be timely.

Dude are you serious? Anyone that goes to high end auctions or are around high end auction houses know that what they are built on is generally DEATH. When folks die or are sometimes near death then the estate has to be settled,some estates contain rare art,baseball cards,furniture,silver,glass,jewelry and it generally goes to auction. Most folks also know that the attorneys are in bed with auctioneers and kick certain estates to different auction houses based on compensation through percentages which is under the table.

While all auction houses do generally mix in consignments along with estate goods most consignors know that finding a trustworthy auctioneer is impossible. I get phone calls from certain auctioneers requesting goods when they know that my consignment will enhance their estate sale and i just crack up when they say okay up for sale is this wonderful sterling silver tea set that was found packed away in the attic, ahhhhh it was not in the attic folks. The only reason i do not get F'ed with is because once when a local auctioneeer tried to burn down a vase i put in the sale i walked up and grabbed it from the runner and threw it against the back wall before it got to the buyer he was in bed with LMFAO. I'm not proud of the incident but word got around so no one has tried to burn me since and folks no longer go to his auction house and his business has damn near folded up.

America was built on free enterprise so only the strong will survive so i say let the games begin. If you want your business to be successful then start thinking outside the box and start providing special incentives for folks like here is a idea. If i currently owned a auction house then here is what i would do as a special offer. I would pick out a Hall of Famer that everyone respected and say anyone bidding in this auction that wins a lot gets their name placed on a ticket, the more lots you win the more tickets go into the hat. When the auction is over then i would pull out a ticket and the winner would recieve a free graded rookie card of the hall of famer,not a low grade either and also a signed ball and bat from the Hall of Famer. Treat customers with appreciation and give them bonuses and then check your ROI the following year.

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Posted By: Rob D.

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Posted By: barrysloate

I like to offer my bidders a deluxe Domino's Pizza with two free toppings of their choice. For consignors I may even throw in a tasty beverage to go with it.

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Posted By: Jim VB

"Dude are you serious?"

Totally.


"...what they are built on is generally DEATH."

Very few consignors, and almost NONE of this board's readers, are dead. Living consignors often have trust in the auction house they choose. The mere act of packaging up your cards, sending them somewhere and then waiting months for your money, implies trust.


"...i walked up and grabbed it from the runner and threw it against the back wall before it got to the buyer he was in bed with..."

Great story. Wish I'd been there. I can see how it relates to... Oh wait... It actually has nothing to do with auction houses doing business through catalogs and the internet. Great story, anyway.


"If you want your business to be successful...(followed by line after line of an infantile marketing idea.)"

I seriously doubt anyone would bid harder and higher on the off chance that they MIGHT win an autographed item. This is the gambler in you talking, not the collector.






On a side note, you would be taken more seriously if you were able to communicate inside the norms of the English language concerning grammar, usage, spelling, and punctuation. I'm not talking about the occasional typo. Everyone makes those (even Barry had a "there/their" yesterday.) I'm talking about line after line that is almost indecipherable.

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Posted By: leon

If Mastro is having issues I don't think B and L Auctions is doing it. I think it could be the packing tape.

And what the hell is your blinking magic-looking thingy?

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Posted By: barrysloate

I know Jim...I was mortified.

Marshall does seem to have a bizarre story for almost every occasion. I don't know how one person can pack so much excitement into a day.

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Posted By: JDRUM

You've got to get up real early!

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Posted By: Jim VB

Barry,

It's OK. It's OK. It's OK.

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Posted By: Dan Bretta

Rob, it's not too late to pick up one of those digital converter boxes.

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Posted By: Jim VB

"You've got to get up real early!"



Jeff,

I think Barry gets up plenty early. I think it's more likely you have to stay up later.

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Posted By: barrysloate

Up at 5:30, breakfast at 5:45. Seven days a week.

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Posted By: Tom Boblitt

the NOIZ level is not high enough here, that's what Marshall's here for......

I would venture to say that no more than 5-10% of any given large Mastronet or REA auction is due to DEATH. If even that much. Yeah....there's the occasional player's holdings or a hobby icon selling off after death but the VAST (repeat VAST) majority is dudes like all of us consigning to these auction houses along with dealers consigning. If you've ever been to the National, you will always see Bill Mastro and the minions out chatting up all the dealers trying to get them to put items--specific items--into their auction. It's not like your run of the mill estate sale that you schlep out to on a Saturday morning--those ARE due to DEATH quite frequently.

Anyway....it'll be interesting to see what shakes out over the next few weeks and months.......

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Posted By: marshall barkman

Auction houses are built on greed and the ability to talk and sell to whoever is front of them. Whether a consignor or estate rep the auction house has to sell them on why to use their service. I am not lumping in the smaller auction houses where the owners do not use the auction house as it's only way to make a living.

I do apologize for my english and typing skills lol.

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Posted By: Rhett Yeakley

Rob, thanks for bringing the [white] noise!!
-Rhett

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Posted By: marshall barkman

Well Barry there is not much to say other than the things i say are true and i'm just not the diplomatic politically correct guy. Instead of contacting my attorney or confronting a auctioneer and claim he tried to pool my vase, i would rather stand up walk to the front and grab the vase off the tray from the runner and fire it into the back wall basically saying now you can have the vase you bunch of SOB's.

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Posted By: John

"I like to offer my bidders a deluxe Domino's Pizza with two free toppings of their choice. For consignors I may even throw in a tasty beverage to go with it."

Can I duplicate toppings Barry??? If so when is the next auction?

Also I think all of us have won a few lots in the last auction any chance for retroactive goodies..not a whole pie but perhaps cheesy bread or something?

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Posted By: marshall barkman

Well gents i gotta roll. Mookie's Brother is live tonight in the 8th race at Charlestown Race Track and is ready to fire. If he shakes loose on the engine then head to the window.

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Posted By: Bottom of the Ninth

I do apologize for my english and typing skills lol.

You have far more to apologize for than that. But it's all good!

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Posted By: barrysloate

I hear you Marshall...I prefer to bring on the PEACE and QUIET!!!

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Posted By: Marty Ogelvie

Barry,

You are the yin and Marshall is the yang.

Both vitally important!

marty

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Posted By: Mike

Got my Mastro Catalog in the mail today ( 15 cents postage due). Anybody else have their's delivered with inadequate postage ?

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Posted By: Andrew

A recession is when you're waiting for a consignment check from an October auction and the auction house has the balls to send you their latest catalog. A deepening recession is when said auction house does not return your phone calls or emails regarding the aforementioned scenario.

"Take your life in your own hands and what happens? A terrible thing: no one to blame." -- Erica Jong

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Posted By: marshall barkman

2nd by a nose 5.40 3.00 Mookie ran his eyeballs out!

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Posted By: mark s.

gotta say marshall, that 9-2 on the "lone f" was a gift!
unfortunate that he got caught on the wire by the post-time favorite...
did you cash any exotic tix as savers?

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Posted By: Sean C

but if it arrives with postage due, it's getting refused.

Don't they normally ship them FedEx? I know the big ones usually arrive that way.

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Posted By: marshall barkman

I pounded the horse 200 across the board and the horse was 8 to 1 and immediatly went to 5 to 1 (lol). Also i had a 50 dollar exacta because i played a 50 dollar exacta box 2/3,7 and i had a 10 dollar tri box 2,3,7 which is all i could see in the race.

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Posted By: Mike

I am curious as to the state of mind of those who will be bidding on the upcoming Mastro auction.

I personally would have a hard time sending my money, for lots that have been won, to a company that has all of these rumours swirling around.

Is there some kind of safeguard for this type of scenario in the U.S.?

Regards, Mike in Canada

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Posted By: leon

I am sure I will be bidding in the auction. There is at least one or two cards I have my eye on. IF there is some kind of financial situation I don't think buying a card from them is going to pose an issue. They have the card, you send money if you win, they send the card. Best regards

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Posted By: Alan

Here's the answer with bidding in auction houses:

http://www.youtube.com/watch?v=202o_JS7E04&feature=related

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Posted By: Matt

Would one of the lawyers (or someone who stayed at a Holiday Inn) please check over Mastro's terms and clarify what happens if a bidder should win a lot, send in his money and then Mastro goes under? Is there risk of the card being seized or would it definitely be delivered to the winning bidder?

My Trade/Sale Page

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Posted By: Bottom of the Ninth

I think this is simply a situation of applying common sense. If a company is going out of business or you suspect they are why would you go into a transaction where you might have to rely on a lawyer to resolve the situation? If the risk is that great but the company has goods that you want, it would make sense to walk into their place of business and exchange payment for the goods. No offense to the lawyers but even they will tell you that having to hire them to make you whole comes with a cost, sometimes greater than what you might be owed.

Greg

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Posted By: Red

I guess you have to be careful with any business that you entrust with your money or merchandise. To add to the panic and hysteria, what happens to the money and stuff in your bank when they go under. Hopefully these guys will still be around to help you with some newly printed cash,
http://www.fdic.gov/deposit/Deposits/insured/index.html
But what about the stuff in your safe-deposit boxes.
Empty out your safe-deposit boxes and send it all to an auction house now. Empty out your bank accounts and start buying everything in sight with an auction house now. It's the only way to save the auction houses and the baseball card economy.

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Posted By: NickM

let Coaches' Corner be one of the auctioneers that goes under.

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Posted By: Joann

Greg is dead on with saying that if you think you might need a lawyer to complete a transaction with an auction house, then it should be dead before it starts.

I had this great professor for my Sales and Negotiable Instruments class - kind of an old-timer. He always always said "Plaintiffs are losers". Every week. "Plaintiffs are losers." His reasoning was that plaintiffs have to bring the argument, usually has burdens of proof, etc etc.

But most of all, he said plaintiffs are losers because if a plaintiff is a plaintiff, it means he got himself into a bad deal and needs a lawyer and possible court action to fix it. Just the fact that he got himself into a situation that needed a lawyer to get him out makes him a loser because of the extra costs he will incur to resolve it. I'm not sure if the lawyers here would agree with that, but it always made me smile when he said it.



J

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Posted By: marshall barkman

I am suprised at how many folks want to bid on items at Mastro's next auction after all the drama. Would you kiss a girl with a cold sore?

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Posted By: barrysloate

So should we assume that with all the people not bidding in the auction, there will be bargains galore?