Heritage Auctions

[E93]

Jeff,
Absolutely hilarious!
JimB

[WillowGrove]

Originally Posted by E93

Jeff,
Absolutely hilarious!
JimB

+1

I've been attending auctions since the 70s. The rules and dynamics are in my blood and I am shocked that these guys are doing this. Of course I shouldn't be shocked by anything in this day and age but you know what i mean. Who do these guys think they're fooling? Its not right and they should know that.

And again, movie scene.....hysterical. And true.

[three25hits]

Adam, Jason & Jeff -- too funny. And too bad this stuff is real.

[Heritage Sports]

We're going to make one last post on this topic and then simply direct any future inquiries back to this post. I'll try to be as clear and direct as I can.

Let me start by stating that I don't mean to "condescend" or insult anybody's intelligence, and if any attitude has been detected in any of my past text (and in my mind I was choosing my words judiciously) I think it's only fair to remember that these posts have been in response to people calling the integrity of Heritage, and by extension myself, into question. This is offensive, particularly due to the fact that it is entirely unwarranted. I think we could all acknowledge that the expected response to "Hey, you're a lying crook," isn't typically, "I beg your pardon, my dear sir, but I must respectfully disagree..." But this isn’t about me, and I certainly don’t want it to be. If you don’t like my words—apologies—but let’s keep focus on the topic.

It’s about Heritage.

I've been around this industry for well over a decade, and have seen a lot of different operations close up. Some were ok, some weren’t. But I say this from my heart, and would say it if I were no longer a HA employee--this is the cleanest, most forthright and honest, most transparent business I've ever personally seen. I don't mean just the memorabilia business. Any business. That's a strong statement, I know. I wouldn't say it if it wasn't true. I might toe the company line, but I wouldn't be so adamant here. I hope at least some of you will take this to heart. I'm not one to throw stones at other organizations--that's not my style--but if anybody truly believes that Heritage is anywhere near the top of the list of worthy targets in this industry then we're clearly operating in different planes of reality.

Every year every consignment director at Heritage, over 100 now in the various collectibles divisions under the HA umbrella, attends a nine-hour training session headed by the owners/founders of Heritage. You hear the word "transparency" like a mantra at these meetings. It is drilled into every Heritage employee, from the very top on down. Call up any consignment director at Heritage and ask about the word. It's practically a religion at Heritage. There's not a single one of us who hasn't had it imprinted upon his or her brain.

Jim Halperin, a visionary in the tradition of a Steve Jobs, was the pioneer of this. It started in coins, and everybody thought he was crazy. He started announcing reserves in an industry where they were always hidden (and still almost always are). He posted past results for similar coins on the actual lot listing for the coin! "If everybody sees it always sells for "X," we'll never get more than "X," people shouted in protest. But Jim was certain that the trust, the transparency, would pay off.

That was years before Heritage was the World's Largest Collectibles Auctioneer, so the proof is in the pudding.

He had a vision of doing something different, and this is it.

Ask around. Ask the top collectors who spend six or seven figures in a calendar year. Ask which houses they'll trust with absentee bids, and which they won't. Watch our auctions live on our website, or come to them in person. Everything, literally everything, is executed with complete transparency.

Honestly, may God help you if you ever broke that code as a HA employee. You could lose a big consignment, you could drop a Tiffany lamp, and you could keep your Heritage employment. You'd be lucky to leave the building with your head if you ever tried to cheat under the Heritage banner. But you'd definitely be leaving.

The particular topic of this thread is no exception to the Heritage code--the policy of house bidding. Every bidder is looking for a bargain--we understand that bidders wouldn't want us in competition for material they're trying to buy. And could anybody doubt how easy it would be for us to simply have cousin Fred in Albuquerque place our house bids, never tell anybody, and whatever he wins just sell quietly and privately? But that wouldn't be honest. That wouldn't be transparent. We place bids in our auctions and we report that we do it. We report when we do it (seven days prior to the auction closing, never after). If we own material, we don't bid on it--we place posted reserves, or (more commonly) we just let it ride.

This is the truth. Period.

I don't think I can make this any more clear.

And if my assurances aren't enough for you, look at the situation in the coldest, most calculating manner possible. We sell close to a billion dollars worth of collectibles annually, over $800 million in the past twelve months. That success, that very considerable sum of money, would be placed at great peril if we were to engage in illegal (or even simply dishonest) tactics.

Heritage is the standard bearer for the way all of us wish the entire industry would operate. You don't have to like everything we do. You don't have to like us at all. But we announce every reserve. We advertise our house bidding policy. We maintain a public database of every single lot we've ever sold. We hide nothing.

We understand that the 800 pound gorilla is going to draw a lot of attention, so we aren't entirely surprised by the negativity we see on this board. But this suggestion that Heritage shill bids has to stop. It is false, which means it is also, by its very definition, libelous. At a certain point, Heritage will have to take more serious steps to protect itself against these claims. Let's hope it never has to come to that.

Again, this is our official response, and the last we'll make. Please spread the word on it. Sadly the Internet tends to bring out destructive instincts in people. You generally find that the people anxious to impugn the integrity of strangers based on a limited understanding of the facts aren’t the type of people one would typically associate with guys like Lou Gehrig or Christy Mathewson, but I hope everybody will understand why we prefer to keep our focus on them instead. The boards are fun that way--this way, they're not. If I’ve offended anybody, I apologize, but attacks on a person’s honor are a serious thing that lately has been taken far too lightly. How should one react?

I hope to hear some brave voices that will echo that sentiment and try to draw this board back out of the high school lunch room. We can do better.

Ending on a high note, hope to see you all in Baltimore at the National, and at our Platinum Night auction at Camden Yards. Bidding is live now at www.HA.com/Sports.

[Exhibitman]

Auctioneer Wormer: Greg, who are the worst bidders at our auctions?
Greg: Well that would be hard to say, sir. They're each outstanding in their own way.
Auctioneer Wormer: Cut the horse***t, son. I've got their bidding records right here. Who never overpays for cards? Who puts in dozens of placeholder bids and hopes to slide by? Every Halloween, we see lots close at wholesale prices. Every spring, the bottom feeders win cards.
Greg: You're talking about wholesale customers, sir.
Auctioneer Wormer: Of course I'm talking about wholesale customers, you TWERP! This year is going to be different. This year we are going to grab the bull by the BALLS and run up their bids.
Greg: What do you intend to do sir? The bidders are already subject to reserves.
Auctioneer Wormer: They are?
Greg: Yes, sir.
Auctioneer Wormer: Oh. Then as of this moment, we'll engage in DOUBLE SECRET RESERVES!
Greg: Double Secret Reserves, Sir?
Auctioneer Wormer: There is a little-known codicil in the auction rules which gives the company unlimited power to jack up prices in times of low bidding. Find me a way to run up the bids on these bottom-feeders while self-righteously proclaiming my honesty and integrity. Put Neidermeyer on it. He's a sneaky little s***, just like you, right? [Greg nods] The time has come for someone to put their foot down. And that foot is me.

[Jaybird]

Thanks for your response. I've tried to respond with care and tact and hoping that you're receive my questions in that spirit. Posting the Sound of Silence clip was a playful reminder that we were waiting for a response.

To your points:

Originally Posted by Heritage Sports

But I say this from my heart, and would say it if I were no longer a HA employee--this is the cleanest, most forthright and honest, most transparent business I've ever personally seen. I don't mean just the memorabilia business. Any business. That's a strong statement, I know. I wouldn't say it if it wasn't true. I might toe the company line, but I wouldn't be so adamant here. [/URL]

The problem I have with this statement is that it is without relative comparison. Just because it is the most honest you have been involved in doesn't mean that there are not problems that should be dealt with to improve the honesty and integrity that you believe the company has. The statement closes you off to improvement and change. It also doesn't matter if another company is doing worse. As an illustration: when someone (say my wife), tells me that she doesn't like something about me, I don't tell her that there are worse husbands. I actually listen to her and reflect on what it is she is trying to tell me. I ask that you do the same.

Originally Posted by Heritage Sports

The particular topic of this thread is no exception to the Heritage code--the policy of house bidding. Every bidder is looking for a bargain--we understand that bidders wouldn't want us in competition for material they're trying to buy. And could anybody doubt how easy it would be for us to simply have cousin Fred in Albuquerque place our house bids, never tell anybody, and whatever he wins just sell quietly and privately? But that wouldn't be honest. That wouldn't be transparent. We place bids in our auctions and we report that we do it. We report when we do it (seven days prior to the auction closing, never after). If we own material, we don't bid on it--we place posted reserves, or (more commonly) we just let it ride.[/URL]

This is THE PROBLEM. Because it is in the rules and stated and observed is not a good reason to do it. There have been many arguments in this thread and elsewhere why it is a problem both for consignors and bidders. The fact that (as you state above) "you could have cousin Fred do it" and you don't doesn't change anything. You might as well have cousin Fred do it because we don't know who is doing it. Does it state in the auction that the item was just bid up by the house? So, when I go to place the next bid I know that the house has bumped it up to its current level?

Also, When you buy it at that level and then put it in your store, do you cut the original consignor a piece of that secondary sale? Shouldn't the consignor that put their faith and trust in your sales skills be the beneficiary of that secondary sale? Why should they sell to you at wholesale level only for you to reach a secondary profit?

It doesn't sit right with me as a consignor or bidder. If as a consignor I saw my item sell for more a few months after my auction with you, I'd think that you didn't do right by me and sold it in a way that maximized profit for you but not me. Why not advise me to sell in your secondary market in the first place? Divert items from your auction to that market and thus eliminate the need for you to buy Wholesale and compete with your bidders? Just stop the practice of bidding on your own auctions. It isn't right.

It doesn't matter what happened in the past. We are where we are. Let's move forward and stop bidding on our own auctions. Please.

[E93]

I appreciate you coming on here and discussing policies and practices at Heritage Auctions. I don't know if we have ever met, but you come across as sincere in your writings here. However there are a couple points I would like to address that I think can be beneficial for Heritage Auctions.

Originally Posted by Heritage Sports

The particular topic of this thread is no exception to the Heritage code--the policy of house bidding.... And could anybody doubt how easy it would be for us to simply have cousin Fred in Albuquerque place our house bids, never tell anybody, and whatever he wins just sell quietly and privately? But that wouldn't be honest. That wouldn't be transparent. We place bids in our auctions and we report that we do it. [/URL]

There is a third option - not to bid in your own auctions and have a binding policy that backs it up. I have no doubt that other auction houses shill bid with "Uncle Fred". You all could choose not to bid in your own auctions overtly or covertly.

Originally Posted by Heritage Sports

We place bids in our auctions and we report that we do it. We report when we do it (seven days prior to the auction closing, never after). If we own material, we don't bid on it--we place posted reserves, or (more commonly) we just let it ride.
[/URL]

This is not the policy stated in your rules. There is no limitation in your rules that would demand you stop bidding seven days prior to the auction closing. If there is "never [house bidding] after", why not change the written rules in accordance with that to put our minds at ease. Otherwise, as it is stated now it sounds like there is no reason for the house to refrain from bidding all absentee bids up to their max just before the close of the auction.

Also, you say the house does not bid on its own material, but your explicit rules say that doing so would be fine. If it never happens, please change the written rule.

You can make a lot of people a lot more comfortable if the written rules reflected the actual practices you claim. Seems like there would be nothing to lose and everything to gain by doing so.

Again, thank you for your willingness to come on here. And thank you for your consideration of these suggestions.

JimB

[Exhibitman]

OK, I've had some fun with this thread but in all seriousness, I am appalled by the twisted thinking behind this comment:

"Every bidder is looking for a bargain--we understand that bidders wouldn't want us in competition for material they're trying to buy."

No, you clearly don't understand that, because if you did you would realize that every bid Heritage places on its own account does the exact opposite: it takes away the bargain that the bidder might otherwise get in a truly open market and directly competes with the bidders.

Jason's point also is well taken about consignments. I would never, ever consider consigning to Heritage as long as I know that they might try to buy my item in the guise of an auction to resell for a profit. If I want to wholesale my stuff I might as well just wholesale directly to a dealer for cash on delivery and not waste my time waiting around for a consignment to be auctioned and paid.

I guess the bottom line is that taking at least the 19.5% Buyer's Premium out of the hides of consignors isn't enough, so Heritage's management feels it is justified in taking away lots that are good wholesale buys so it can resell them and reap additional profits from their consignors. The justifications are simply insults to our intelligence carefully crafted by corporate flacks to divert attention from what is going on.

Frank Lopez: You know what a chazzer is?
Tony Montana: No, Frank, you tell me. What is a chazzer?
Frank Lopez: It's a Yiddish word for "pig." See, the guy, he wants more than what he needs. He don't fly straight no more.

[jefferyepayne]

Originally Posted by Heritage Sports

We understand that the 800 pound gorilla is going to draw a lot of attention, so we aren't entirely surprised by the negativity we see on this board. But this suggestion that Heritage shill bids has to stop. It is false, which means it is also, by its very definition, libelous. At a certain point, Heritage will have to take more serious steps to protect itself against these claims. Let's hope it never has to come to that.

A personal opinion is not libelous. Sooooo....

My personal OPINION is that house bidding is shill bidding. Perhaps only for the purpose of setting a reserve amount but its still shill bidding. Others may disagree but this practice is not acceptable to me.

Another policy I have is to never do business with people who threaten me. In my OPINION, the above statement is a threat so I am done with HA.

jeff

[Shoeless Moe]

I think they need a representative from the baseball community to help with their image, may I suggest Curt Schilling.

[RUSH2112]

Pleased to see that 99% of members that posted here know the difference between right and wrong and won't be influenced by a hired spokesperson.

Noun 1. spin doctor - a public relations person who tries to forestall negative publicity by publicizing a favorable interpretation of the words or actions of a company or political party or famous person; "his title is Director of Communications but he is just a spin doctor"

[Jaybird]

Originally Posted by Heritage Sports

We hide nothing. [/URL]

You're hiding whether it is you or a legitimate bidder bidding on the item. I don't know if it is the house bid, Cousin Fred, or another interested bidder. Disclose the house bids. Put a little red flag out there that said the last bid was a house bid. Then I know when I'm placing a bid, who I'm topping.

Originally Posted by Heritage Sports

We maintain a public database of every single lot we've ever sold. [/URL]

Interesting point. How about if that same public database didn't hide the fact that Heritage had won that particular lot? Shouldn't the people looking at that database know when Heritage has bid and won the lot? It would mean a lot to me and would make a difference in how I value that item.

Originally Posted by Heritage Sports

I hope to hear some brave voices that will echo that sentiment and try to draw this board back out of the high school lunch room.[/URL]

Everyone here is having a little fun but also asking serious questions. The response that you feel hurt and that it's high school only serves to try and minimize the people asking the hard questions. Answer the direct questions instead of commenting about your hurt feelings. It's a business.

[Maddog]

They can't answer these questions directly because the facts speak for themselves.
I'm sure all are familiar with the old Duck analogy.
The auction houses are confident in themselves because there seems to be the impression that it is better to deal with an auction house than a dealer. Personally, I have more confidence dealing with a Jim S and Rich S than I do with any auction house.
Insider trading is illegal, I fail to see how in the scheme of things shill/"house" bidding is really any diferent? As long as one party has an unfair advantage over the other party one can only question the ethics of the deal. In my line of work if there is ANY question as to the structure of a deal run; do not walk; do not collect the $200, it will only cost you 10 times that down the road.

[Wite3]

It never ceases to amaze me how greed gets in the way of good business sense...

Heritage...ask your self this question...

Does coming out and stating you will no longer "house" bid your auctions and be completely transparent help your business in the long run? Would more people consign with you? Would you lose customers?

Seriously? I would be far more likely to bid in your auctions if this was the case and I am sure consignors would be far more comfortable as well. I just do not see a downside in the long run. You are running the risk of causing more problems for yourself.

BTW, I would love to see you pursue a libel suit against anyone on this board. As someone said, opinion would be hard to prove damages on. Ask REA how their suit is going. The other thing to consider is that the second you file that suit, I am sure that the opposite lawyer will be asking you to open all your files and all your books including bid histories, payments, etc. How comfortable are you with that?