Interesting thread on the non-sports board

[barrysloate]

I think Rob was being

[Rich Klein]

http://blogs.dallasobserver.com/unfa...age_auctio.php

As an aside, Sam Merten, who wrote this story for the Dallas Observer, used to work in the Beckett grading department and has a good knowledge of collectibles. I did not re-read the whole article or through all the comments; but I will later. There is no doubt that this is a fairly well balanced story and comments WERE well balanced and very interesting.

Rich

[jbsports33]

Interesting post, just not surprised by any of this, we have seen many issues come up in recent years and some how everyone is still in business. The policy for sure is to protect the consignor, but what about the buyer that has no knowledge about what lot may be getting bids from the house.

Jimmy

[calvindog]

I'm not here to defend Heritage, just trying to point out the hilarity of piling on them while defending Goodwin to the grave. Based on the following auctions, which occurred within months of each other I believe, I suppose Heritage's proclaimed shill bidding did not do much to help them with these auctions:

Heritage: D304 Young SGC 80 $17,925
Goodwin: D304 Young SGC 80 $80,053

Heritage D304 Mathewson SGC 70 $8,365
Goodwin D304 Mathewson SGC 60 $45,123

Imagine if Bill Goodwin was able to shill bid as per his published auction rules! Things could really get out of hand; I mean it would be legendary.

[bijoem]

Originally Posted by calvindog

I mean it would be legendary.

poetic!

[bobbyw8469]

WOW! I am AMAZED at the price differences for the EXACT same card for the Young, and a lower condition card got WAY MORE money than his higher grade counterpart!! Should I start consigning to Goodwin????

[PolarBear]

Originally Posted by Rich Klein

http://blogs.dallasobserver.com/unfa...age_auctio.php

As an aside, Sam Merten, who wrote this story for the Dallas Observer, used to work in the Beckett grading department and has a good knowledge of collectibles. I did not re-read the whole article or through all the comments; but I will later. There is no doubt that this is a fairly well balanced story and comments WERE well balanced and very interesting.

Rich

Wow, great article.

I couldn't believe the pseudonym of their in house "bidder", N.P. Gresham. Greg Rohan, the President of Heritage Auctions, says the N.P. is for "New Purchase" but claims he doesn't know the significance of Gresham.

I'm calling B.S. (Baloney Sandwiches) on that one. Heritage is primarily a numismatic (coin) based company. One of the widely known axioms in coin collecting is Gresham's Law. The use of it here is clearly meant to mock the bidding process. I'm shocked at the audacity.

No wonder he claims he doesn't know the significance of Gresham. That sure wouldn't come across too well in a lawsuit about shill bidding.

[Rob D.]

Originally Posted by calvindog

Heritage: D304 Young SGC 80 $17,925
Goodwin: D304 Young SGC 80 $80,053

Heritage D304 Mathewson SGC 70 $8,365
Goodwin D304 Mathewson SGC 60 $45,123

One word: marketing.

[rhettyeakley]

The fact that their house bidder includes the name "Gresham" is absolutely hilarious. Yeah, I'm sure he had no idea what that meant!

[autograf]

one word: strategery........

[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.

[Exhibitman]

Originally Posted by PolarBear

Wow, great article.

I couldn't believe the pseudonym of their in house "bidder", N.P. Gresham. Greg Rohan, the President of Heritage Auctions, says the N.P. is for "New Purchase" but claims he doesn't know the significance of Gresham.

I'm calling B.S. (Baloney Sandwiches) on that one. Heritage is primarily a numismatic (coin) based company. One of the widely known axioms in coin collecting is Gresham's Law. The use of it here is clearly meant to mock the bidding process. I'm shocked at the audacity.

No wonder he claims he doesn't know the significance of Gresham. That sure wouldn't come across too well in a lawsuit about shill bidding.

Don't misunderestimate Rohan. There's definitely something stinky in the potpourri at Heritage. I have to wonder how much of the $ I dropped there last year were bids against the house...

[PolarBear]

Originally Posted by Exhibitman

Don't misunderestimate Rohan. There's definitely something stinky in the potpourri at Heritage. I have to wonder how much of the $ I dropped there last year were bids against the house...

Indeed.

There's an old saying in Tennessee. I know it's in Texas, probably in Tennessee that says, fool me once, shame on you. Fool me, you can't get fooled again.

[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.