Partnering On Auction Lots

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Posted By: Todd

I've never participated in partnering for auction lots but have always thought about it.

1. How does it work as far as determining individual card prices?

2. Who is the one that pays for the auction lot


3. Has there been problems of so-called partners backing out ?


I would love to hear some ideas/thoughts.


Thank you

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Posted By: Al C.risafulli

I believe it's a standing rule on Net54 that if any members choose to partner on a lot, Leon pays for that lot.

Anyone want to partner with me on the Wagner?

-Al

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Posted By: Jim VB

Al,

Given those conditions, I would like to partner with you on the Wagner AND the Ruth.

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Posted By: Adam

Edited to say: This thread has gotten out of control.

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Posted By: JK

I posted about this in the e94 thread. I think Adam's first method (percentages) is the way most do it. Selling even shares really only works if the cards are of equal value. When you have a lot with a number of commons and some superstars like wagner/cobb or wide ranges of conditions, you will have a difficult time finding people to pay an even share of the lot (i.e. no one is going to be willing to overpay on a common so that someone else who signed up first can get a cobb at a 10% discount)

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Posted By: Tom Boblitt

to partner on the Wagner as well and I would like to claim the bottom 1/3 of the card.

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Posted By: Alan

Is it anything like fighting over finding the Afikoman during the sedar ?

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Posted By: Bob

I agree. It is sometimes tough to determine market value on cards of differing values in the same lot. For instance you might have a Hall of Famer that is low grade and a common which is the highest graded. Or, as in the REA E94 lot, you have two cards which have high premiums because of their backs. Both are HOFers, tough cards and very popular anyway but you have to throw in the premium back valuation.
It's an inexact science. I have been in on a number of these caramel card lots and all worked out successfully. I have been the main payor a couple of times and if you get responsible and conscientious collectors who pay their shares quickly, (both cards and shipping- plus shipping to the individuals), it works like a charm.

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Posted By: barrysloate

Everyone profits except the consignor.

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Posted By: James Feagin

In that case Barry, wouldn't that fall on the auction house (whoever it is) to break down the lots in a better way for the consignor?

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Posted By: Paul

Partnering on auction lots is too complicated for a sleep deprived simpleton like myself.

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Posted By: barrysloate

When I did auctions I made every effort to offer single lots when I could. With regard to REA's auction there are simply too many lots to break the E94 set into thirty single cards.

We've had many debates about these groups banding together and I have mixed feelings about them. I certainly think putting it in print on a public chatboard is a slippery slope. If I had consigned that E94 set I would be calling the auction house and making them aware of it.

I still have no idea whether there are any legal issues with people grouping to keep the price down. It may very well be perfectly legal, but I'm not sure. That said, the market is broad and even if ten people form a group, you can be sure there will be an eleventh guy out there keeping the price honest. But I do fully understand that most collectors may only need or can afford a few cards so in that spirit forming a group makes good sense.

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Posted By: Matt

nm

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Posted By: Dave F

It may not necessarily be keeping the price down though Barry. At the same time, those ten people going in as a group could just as easily never put a bid in as an individual just knowing the group will be out of their range. That group of ten may push the price up against one individual who is looking at a group of cards seriously. I guess it goes both ways.

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Posted By: barrysloate

Dave- if I were posting on a chatboard about it I would simply stress that the group is being formed because each collector only needs a few cards. Even if you felt that keeeping the price down was one of the benefits, I just wouldn't put that in writing. That's all. Obviously, if one already has 28 E94's and needs two to finish the set, it makes sense to find others who also might only need a few.

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Posted By: Matt

Dave - that's an important point, by partnering up, new money is brought at the lot that wouldn't otherwise have since some of those people would not be chasing the whole lot. There's no doubt that's a benefit to the consignor.

My Trade/Sale Page

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Posted By: barrysloate

Matt- it depends. If ten guys each need three cards, then I agree with you. But if bidder A and bidder B were each thinking of aggressively going after the set, and then agreed not to and instead partner up and split the cards, then it might go for less. Of course, there is no way to know what a lot could have gone for, it's too abstract. To repeat, I would leave out any discussion on a public chatboard regarding the possibility that the lot might go for less if you knock out some of the competition.

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Posted By: Matt

Barry - yah - we've discussed this issue before - there are cases where a consignor would lose money as a result of a partnership and cases where he would gain money. I think it tilts towards being better for the consignor, but there's no way of knowing for certain.

My Trade/Sale Page

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Posted By: Jason L

I would like in on the deal, but I really only want the borders.
You other guys can divy up the image.

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Posted By: Jim VB

Jason,

You already tipped your hand. We know which lot you want.

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Posted By: leon

The only Wagner I could afford would be a WG4 Wagner.....and I doubt too many folks would want "part" of one of those...

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Posted By: barrysloate

I know Matt, it could tilt either way. But that isn't even my point. What I am saying is one needs to be careful when posting on a public chatboard.

I know there was a case a few years ago where a number of art dealers agreed not to bid against each other, and in a manner of speaking formed a bidding cartel. I don't remember the details but they did get into a whole lot of legal trouble.

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Posted By: Matt

Barry - we discussed that case last time as well - there is a concrete difference between backing off of a lot completely in exchange for someone else doing the same on a different lot as those art dealers did and partnering to split the lot and putting your money into it.

My Trade/Sale Page

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Posted By: barrysloate

Yes, there are obviously distinctions.

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Posted By: scgaynor

Actually, colluding on lots is very illegal. It is often hard to prove, but if one member of the partnership gets upset and decides to tip off the authorities, there can be pretty stiff fines. I don't think that the numbers involved here would be high enough for any law enforcement agency to get involved, but talking about it on a public board certainly makes it easy for them to figure out who is colluding to keep the price down if they did want to make a case out of it

There was a situation at Sotheby's or Christies a number of years ago where some bidders conspired to keep the price of an item down, they then went and had a mini auction between themselves. One of the guys that lost got upset and informed the authorities and there were some pretty heavy fines.

I was writing this just as Barry was posting his message.

Scott

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Posted By: leon

I am no lawyer but I would hope "intent" has something to do with it (and it very well might not). If the intent is to win the lot and each take part for their collection then that is one thing. If the intent is to ONLY keep the price down, then that might be another. I would be careful what you say publicly regardless of intent. I remember 8 yrs ago (I think the statute of limitations is 7 yrs >) a group (not the singular Dorskind group) of us went in on some D304's. I got my Weber backed Collins for under $200...which was a decent deal even at that time.

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Posted By: Peter_Spaeth

It's a very fine line, but in the case of lots with multiple items, the presumption probably would be that the people who formed the group wouldn't have bid at all individually because they were interested only in certain items. That isn't collusion. I would guess Rob understands that dynamic.

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Posted By: Jason L

never works though, cuz the idiot always breaks ranks

JimVB - Whaddya mean, I already tipped my hand?
Which lot am I interested in?
I wish it were just one.
usually I just wave my hand, so if you saw me merely tip it, then that's something special!

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Posted By: Jim VB

Jason,

I answered this question yesterday on the REA Preview thread. Isn't there something you want in lot #390?


http://www.network54.com/Forum/153652/thread/1238681616/last-1238775975/REA+Auction+Preview

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Posted By: martindl

Scott is absolutely right and Peter is absolutely wrong. Getting a group together and determining who will get what before the active member of the group bids on the groups' behalf is illegal. If the members of the group merely state that they have interest in items within a lot, but are none specific and those items are not 'held' for that person, then its not.

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Posted By: CoreyRSh.anus

In my view there are extraordinarly few, if any, absolutes in the law. And I don't believe this is one of them. If a group forms because otherwise no member would have the means to partake in the lot, I see no legal (or ethical) issues with it. To go further, one could make a very compelling case that the formation of the group created another viable bidder, a reasonable result being a greater realized price to the consigner.

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Posted By: barrysloate

Larryhaven- when the new software kicks in idiots like you won't be able to post anymore. And that's a good thing.

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Posted By: Joseph

It's called "bid rigging" and it is absolutely illegal. Scott is correct: it is very difficult to prove, but obviously, in the case of conspiring on a public bulletin board, a few screen shots would be a great aid to the prosecution. Not that I think it would ever actually happen.

It has always puzzled me that the curators of this board--who run such a tight ship otherwise--would allow this activity. Then again, that's why I kinda love this place.

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Posted By: Peter_Spaeth

Bid-rigging is an agreement among buyers not to bid against each other or not to bid above a certain price. If there is an agreement to form a group to bid on and allocate multiple lots, that of course is bid-rigging. Or if there is an agreement to divide a lot of multiple items that otherwise two or more of the group would have bid on against each other, that is also bid-rigging. But forming a group to bid on a lot of multiple items that none of the members would have bid on at all does not implicate either of the harms addressed by bid-rigging, and indeed as Corey said is pro-competitive because through economies of scale it creates another bidder. I would be surprised, and would stand corrected, to see cases holding that such a group -- which I see as more akin to a lawful buyers' cooperative -- is illegal. EDITED TO ADD Granted, of course it might be hard to prove, as a member of the group, that you had no intention of bidding at all but for the group.

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Posted By: Jason L

I want lot #390,...but that doesn't mean I can PAY for it!

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Posted By: Jeff Lichtman

5 years, Leon, 5 years. You can exhale now.

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Posted By: Bob

I understand what Barry and Scott are saying but I think they are wrong. For example, if I couldn't find someone interesting in bidding on the two Blomes Chocolate backed cards and the Cobb, all of which would go for a bunch, I wouldn't be interested in bidding on the Young and some commons I need. The net result would be that I wouldn't bid on the lot at all because I didn't want to pay for an entire lot which has those 3 cards in it. Others I know feel the same way. You would thus have 6 or 7 less bidders and less money chasing the cards. The bottom line is that the consignor is actually better off with a strong spirited bidder (i.e. group of bidders) going after the lot. As far as the intent of the bidders, it is not to lower the price but rather to be able to secure needed cards. There can be a bidder who wants only the Cobb card and doesn't want to have to shell out for a "bunch of commons" and two high priced cards, but is willing to go strong after the lot since he knows he is only paying for the Cobb.
Finally, I was a member of a group last year or maybe the year before that bid very aggressively on a set (or near set, can't remember, of E98s) but were outbid by a more aggressive bidder (or group). The final hammer price and thus the money sent to the consignor of the lot was much greater than it would have been had it not been for our group bidding and continuing to drive up the price.

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Posted By: leon

That's a nice little debate. I am not quite sure what you meant. You said:

"It has always puzzled me that the curators of this board--who run such a tight ship otherwise--would allow this activity. Then again, that's why I kinda love this place."

I guess the curators would allow it because:

1. it's the hobby we love
2. so we can get more cards we need/want
3. because it's fun
4. it's why the board is here
5. it's almost certainly legal (from what I have read)

Or maybe I didn't understand your questioning on it? Hope all is well...

take care
a curator

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Posted By: Joseph

Leon: The innocence of your response is precisely is precisely why "I kinda love this place"

Sincerely...Joseph

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Posted By: Marty Ogelvie

Partnering in on a group of cards makes sense, especially if everyone knows up front which cards are going to be their's. Everyone in the group buy gets their specific card or cards from the group. I can't see partnering in on a single card.... I think that has been tried (cardtarget).. and the last time I tried that trick, the card ended up being ripped in half by two over anxious 8 year olds.

marty

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Posted By: leon

Yes, sometimes I don't see some things I probably should. Even though my life's history might be far from perfect I don't think like a criminal. With all of the activity that goes on in the hobby it's sometimes hard to be honest and compete without doing that but hopefully, in the long run, doing the right thing pays off. Scott B. and I think it will. You can be guaranteed the prices you see in our auctions are real and the cards, unless reconsigned, won't be up for auction again mysteriously, and real quickly, as we see in so many other auctions. As for this particular argument I always prefer folks be able to stick their foot in their mouth if they want to.

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Posted By: Red

This whole situation could be avoided if consignors didn't give their stuff to big auction houses that just lump everything together in one large ridiculous sized group. A lot of times big groups will sell to a reseller who then makes good money selling everything individually. The person who loses out is the consignor. There are plenty of smaller auction houses with equal exposure who will offer each card individually for a consignor. Big auction houses want whats fastest and easiest for the auction house. Smaller auction houses dont mind working a little harder and doing whats best for the consignor.

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Posted By: leon

Even though I run a smaller auction house and could construe what you said as a complement (so thanks for that) you need to be careful about being very strongly opinionated without putting your full name out here, per the rules on the subject of anonymity. Nothing personal.....take care

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Posted By: JimB

Interesting discussion. I am hoping to be involved in a group bidding on a large lot from which I want only two common cards that represent a very small (probably less than 5%) percentage of the total value of the lot. Were there no group, I would definitely not pursue that lot for two cards. How many people would buy a 30k lot for two $500 cards? Every situation is different, but in this case, I think the formation of a group will benefit the consignor.
JimB

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Posted By: LetsGoBucs

I'm not a lawyer, I haven't slept in a holiday inn express recently, but....

If groups are formed to bid and buy then there is nothing wrong with that.

Look at the number of public and private companies that put themselves up for sale.....and equity firms join together to put in bids and many times you have two or three syndicates placing bids for a business. Sometimes there is only one. Is it illegal for the three firms putting up money in that instance? No it isn't. Could the firms/banks buy the company on their own? Maybe, maybe not.

So if its ok for multi-billion and multi-million syndicates to be formed to bid on firms......I have to surmise that its ok for baseball cards.

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Posted By: Max Weder

Here is the Department of Justice web pagehttp://www.usdoj.gov/atr/public/guidelines/211578.htm

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Posted By: Bob

Guys getting together to raise the money to be able to bid on pieces of cardboard who would not be able to bid on them otherwise is not only legal but a good thing for consignors of those pieces of cardboard. There is no attempt to "fix" the price of an auction, no attempt to discourage bidding, no collusion, no fraud.
This whole discussion borders on the ridiculous.

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Posted By: LetsGoBucs

Thanks for the link. What part do you think people are violating?

Looks to me that this is directed at vendors and suppliers in business-business transactions. If you and I own janitorial services companies in the same town we can't arrange for one another to each win the local government every other year.......

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Posted By: ctdean

What was said in the second paragraph of tbob's first post.

Clarence Dean

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Posted By: Bob

What is the difference between guys writing someone who is definitely going to bid on a lot and asking him if there are certain cards he doesn't want in the lot, could they buy them from him at an agreed upon price, and partnering for cards?