ebay finds that PWCC engaged in shill bidding?

Peter_Spaeth · #1 08-19-2021, 06:55 PM

Quote:

Originally Posted by Mark17

An asset is "worth" what someone will pay. If a store owner, or a guy at a show, or a buy it now on ebay is asking $130 and someone is willing to pay it, there's your comp. If you bid on a card so as to push it into range where someone will have to pay $130, and someone does, then that is a comp. The thoughts going through the minds of the store owner, the table holder at the show, the ebay seller, or the 2nd highest bidder don't matter.

So you don't recognize market manipulation? OK, we can disagree. Shill bidding shouldn't bother you then, as long as someone really paid at the end of the day.

Mark17 · #2 08-19-2021, 07:17 PM

Quote:

Originally Posted by Peter_Spaeth

So you don't recognize market manipulation? OK, we can disagree. Shill bidding shouldn't bother you then, as long as someone really paid at the end of the day.

Please, Peter, don't put words in my mouth. I do not think shill bidding is okay.

If a card has been selling in the $120 range and someone lists it in their store/convention table/ebay/net 54 marketplace for $130, are they also "manipulating the market" by trying to push the price up? In a rising market, many dealers do raise their prices. Is it against the Peter Principle for them to try to get more for their cards by raising their ask prices?

Bottom line, if people are paying $130 for a card, that is what it is "worth."

Peter_Spaeth · #3 08-19-2021, 07:19 PM

Quote:

Originally Posted by Mark17

Please, Peter, don't put words in my mouth. I do not think shill bidding is okay.

If a card has been selling in the $120 range and someone lists it in their store/convention table/ebay/net 54 marketplace for $130, are they also "manipulating the market" by trying to push the price up? In a rising market, many dealers do raise their prices. Is it against the Peter Principle for them to try to get more for their cards by raising their ask prices?

Bottom line, if people are paying $130 for a card, that is what it is "worth."

That's circular reasoning, no? True in every single case, and therefore by definition excludes the notion of a manipulated price.
And your example is very different from mine and you know it, in mine people are putting in bids hoping they don't win, for the purpose of driving up the price. Classic market manipulation in my opinion. Making bidders think someone else really wants the card at a higher price. Whether it's OK or not is a different question of course, my only point is under those circumstances I would question whether the final price is manipulated or not as opposed to reflecting some concept of a market price.

Mark17 · #4 08-19-2021, 07:32 PM

Quote:

Originally Posted by Peter_Spaeth

That's circular reasoning, no?
And your example is very different from mine and you know it, in mine people are putting in bids hoping they don't win, for the purpose of driving up the price. Classic market manipulation in my opinion. Making bidders think someone else really wants the card at a higher price.

If a card is at auction and a shill bidder bids $120, the message he's sending is that the card is worth $120 to him. He is hoping someone will think it is worth $130, but he is not telling people that.

However, if a dealer lists a card at $130, he is saying that is the price it will take to acquire it from him, implying that is its value.

Quote:

Originally Posted by Peter_Spaeth

Whether it's OK or not is a different question of course, my only point is under those circumstances I would question whether the final price is manipulated or not.

Shill bidding is not an acceptable tactic. But a shill bidder is hoping to get someone to pay $130 for that card. A dealer revising his ebay listing, jacking their ask price up to $130 is trying to get someone to pay $130 for the card. Either way, if someone is looking at that card and willingly decides he will pay $130 for it, then there you have it.

Examining the motivation of an under bidder in an auction doesn't change the reality that the card voluntarily transacted at $130.

Peter_Spaeth · #5 08-19-2021, 07:43 PM

Quote:

Originally Posted by Mark17

If a card is at auction and a shill bidder bids $120, the message he's sending is that the card is worth $120 to him. He is hoping someone will think it is worth $130, but he is not telling people that.

However, if a dealer lists a card at $130, he is saying that is the price it will take to acquire it from him, implying that is its value.

Shill bidding is not an acceptable tactic. But a shill bidder is hoping to get someone to pay $130 for that card. A dealer revising his ebay listing, jacking their ask price up to $130 is trying to get someone to pay $130 for the card. Either way, if someone is looking at that card and willingly decides he will pay $130 for it, then there you have it.

Examining the motivation of an under bidder in an auction doesn't change the reality that the card voluntarily transacted at $130.

The difference to me is that inflated fixed prices are rampant, people tend to ignore them, whereas in the context of an auction, bidders (rightly or wrongly) assume all bids are made in good faith and not for the purpose of sending a false signal to the market.

So if I saw a BIN of 130 I would probably think oh eff the seller, whereas in an auction if I saw the current bid at 120 I might well think oh the price of this card is going up I guess I should go to 130.

Mark17 · #6 08-19-2021, 07:57 PM

Quote:

Originally Posted by Peter_Spaeth

So if I saw a BIN of 130 I would probably think oh eff the seller, whereas in an auction if I saw the current bid at 120 I might well think oh the price of this card is going up I guess I should go to 130.

In that scenario, it sounds like you are manipulating yourself.

Sometimes I buy stuff, sometimes I win stuff at auction. I know what I am willing to pay for something either way, and while I seldom or never have bidders' remorse for spending too much, I frequently win stuff for less than I had decided I would be willing to pay.

Maybe it comes down to fiscal discipline?

Peter_Spaeth · #7 08-19-2021, 08:00 PM

Quote:

Originally Posted by Mark17

In that scenario, it sounds like you are manipulating yourself.

Sometimes I buy stuff, sometimes I win stuff at auction. I know what I am willing to pay for something either way, and while I seldom or never have bidders' remorse for spending too much, I frequently win stuff for less than I had decided I would be willing to pay.

Maybe it comes down to fiscal discipline?

How have I manipulated myself, I don't follow? How am I supposed to know the difference between a card increasing in value with a good faith bid at 120, and a bad faith bid at 120? I'm not omniscient.

Snowman · #8 08-19-2021, 07:49 PM

I changed my mind. I don't care if you know my name. It's Travis, but most people call me TJ. I just updated my profile with the cryptic version of my name so nobody thinks I'm some shill or something like that. I don't work in the sports card industry and never have. I'm just a random collector like most everyone else.

Arazi4442 · #9 08-19-2021, 08:04 PM

Quote:

Originally Posted by Snowman

I changed my mind. I don't care if you know my name. It's Travis, but most people call me TJ. I just updated my profile with the cryptic version of my name so nobody thinks I'm some shill or something like that. I don't work in the sports card industry and never have. I'm just a random collector like most everyone else.

So your name is TJ Troll?

bnorth · #10 08-19-2021, 08:20 PM

Quote:

Originally Posted by Arazi4442

So your name is TJ Troll?

LOL, That is what I seen at first also. Here I thought his name started with a M.

Snowman · #11 08-19-2021, 09:45 PM

Quote:

Originally Posted by Arazi4442

So your name is TJ Troll?

LOL. No. That's an 'a' and an 'i'... Trail, as in hiking trail.

Arazi4442 · #12 08-20-2021, 09:20 AM

Quote:

Originally Posted by Snowman

LOL. No. That's an 'a' and an 'i'... Trail, as in hiking trail.

What a shame, that would have been fantastic.

Welcome to the board!

Johnny630 · #13 08-20-2021, 09:25 AM

Will they continue to run up cards on their own auction site ?

hcv123 · #14 08-20-2021, 10:59 AM

I do not participate in, nor in any way support or condone shill bidding! I agree with Travis that while shilling is 100% wrong on every level it in and of itself doesn't have as large an impact on a given market - people's fear and greed have a much more significant impact.

From what I have read here I think people are getting confused between shill bidding and "fair market value" or the effect that shill bidding has on fair market value. I think it might be helpful to start by borrowing the following from Investopedia:

"In investing, fair value is a reference to the asset's price, as determined by a willing seller and buyer, and often established in the marketplace.

Fair value is a broad measure of an asset's worth and is not the same as market value, which refers to the price of an asset in the marketplace.

In accounting, fair value is a reference to the estimated worth of a company's assets and liabilities that are listed on a company's financial statement."

In my opinion, while there have been many excellent and accurate points made, the ultimate answer lies in consideration of all of them.

A fairly run auction is in a best case scenario a fair determinant of market value on that day, with all the participants in the auction that day Someone (inaccurately) stated once the high bidder has won an item in an auction the item is theoretically only worth what the second highest bidder was willing to pay. What is inaccurate about that is it assumes all willing buyers participated in the auction - and that variable theoretically can change day to day both with peoples knowledge of and participation in a given auction on a given day as well as different collectors decisions to add and remove cards from their want lists. It is just not simple. Do you know some auction houses (At least a couple of "biggies") per their rules (how many times have you read them?) have the right to bid on a consignor's behalf up to a "reserve" price. How is that different than "shilling"? It is disclosed as a term of the auction - does that make it okay?

If there is a private sale at a certain price level, similarly it is in a best case scenario a fair determinant of market value on that day, with all the participants in the market where it sold that day

The more sales there are, the more useful information exists to help as a guide for an interested buyer to have an idea of what a "fair market value" might be. But what about all the other variables - Is the example raw or graded? Who graded it? Although the card is theoretically "the same" - I don't think many would argue that there are different "fair market values" for raw vs graded cards as well as cards graded by different companies.

As highlighted in a previous post - auctions are NOT always the best place to get the highest price for your cards - I love buying certain items out of auctions for this very reason! It is also (SHAMELESS PLUG COMING) why part of my business is private consignment sales - it offers true price protection with integrity! If my consignor doesn't like an offer, it doesn't "sell to the highest bidder" - we wait for someone willing to pay more.

A factor that has been touched on, but not addressed directly (I think) is the inefficiency of the market - or the opportunity for arbitrage. Unlike the stock market which is a single destination for all potential buyers to meet all potential sellers, there is no such place for trading cards - The market is hugely fragmented - multiple small and large auction houses, shows, bulletin boards, Ebay, garage sales, etc. The way it exists currently - there is NO WAY anyone can make a claim that any single sale is a "fair market value"

So what is a collector to do? Know your market. As Travis stated the more current recorded sales there are of a specific card/grade/grader - the higher degree of confidence we can have of current "market value". The fewer the sales the less confidence we can have (lower OR higher) of the "market value".

There is no pricing ("market value") perfection. To some, the card matters more than the money, to others, the price they pay more than the card - neither approach is wrong! There is nothing wrong with Butch's approach - he bids what a card is worth to him (however he choose to determine that!)

Remember CPU? CCP? Beckett? SPort Americana guides? Standard catalog? Were they fair indicators of "current market value"? Sometimes - but more often not.

Overall just so well stated I wanted to repeat it:

Quote:

Originally Posted by BobC

As you said, your definition is market price at "auction". I always heard the FMV of something was what a willing buyer would agree to pay an unrelated willing seller for something in an open, arms length transaction. So if the party looking to buy a particular card is willing to pay $100 for it, but because they are seeking to buy it through an auction and end up getting it for less than their max bid, it doesn't mean they couldn't have run across that same card with a dealer at some show and gladly paid the $100 he was asking for it, right? So if that is the case then what is the correct market value of that card, at least at that point in time? It sure isn't just one increment over $50.

Plus, when dealing with an auction you are limited by who decides to participate. There is no guarantee that all potentially interested parties are participating or even aware of a particular auction, or a specific card in it. Of course the same goes for card shows and individual dealers selling a card outright, they don't have all potential buyers necessarily aware of and looking to buy a card they have for sale either. And the thing about an auction is that you normally don't know the maximum amount someone who ends up winning an item for is actually willing to pay for it, which to me would be it's true market value. We really only know what the second highest bidder attending/participating in that particular auction was willing to pay.

You may be biased in that you operate an auction house and possibly tell potential consignors that an auction is the best way for them to get the highest possible market value for their items they look to sell, but is it always? I've heard of people saying items they put up for auction didn't go for what they thought they would and were sometimes disappointed in what an item ended up selling for, and I would suspect that has happened in your auctions as well. At best, auction and Ebay results are good indicators of where the "market" is approximately on cards, but to truly know what someone is really willing to pay for an item you need to know the max amount they would have gone for that item. That would be a more true "market" value. But still, think about how many times here just on Net54 you've seen someone post how after the fact they heard about something they didn't know was being auctioned, or how they were in an auction, but because there were so many items they were going after they couldn't afford to go more on some items they wished they could have. Those kinds of things affect final hammer prices negatively, but is that hammer price on such items truly an indicator of accurate "market" prices then?

I've always felt that most people acquiring items through auctions are doing so because they expect to get things for less than what they perceive market value to be. Why else would you always hear of so many people talking about being run up in their max bids? They are ticked because they fully expected to pay less, and they have every right to be if somehow their max bid amount became known and was used solely to run up what they paid. Granted, there are marquee and uber rare items, like the recent PSA3 Wagner sale, where no one has any idea where the market truly is. So they consign it to auction to hopefully get the top price, and it sells for a record $6.6M. But what if instead of an auction the consignor instead put it up for sale at say $7.5M, and the same person who won it for $6.6M happily pays the $7.5M for it because he/she thinks it is really worth $10M. So in that case your "auction" value is way below what a more true FMV should be.

And maybe a more measurable indicator that auctions aren't always perceived as the best way to get maximum market value for a card is Ebay itself. When Ebay started out it was primarily an auction platform, but if you looked at pre-war vintage card sales over most recent years, the number of actual auctions is usually around 1,000-2,000 at any point in time. Meanwhile the total number of pre-war vintage cards being listed was more like 40,000-50,000. At least it used to be before Ebay changed the search filters and you could look up pre-war baseball as a specific category. Point is, the vast majority of sellers did not feel auctions would get them the max market value. And yes I know there are certain dealers well known for their pages and pages of supposedly overpriced BIN listings, but that doesn't change the fact that if they felt they would get a comparable/higher max price by putting their items up for true auctions instead that that is what they would be doing.

There is no perfect indicator of a card's FMV, and it most definitely fluctuates over time, especially during this current pandemic period we're going through. But at least to me, it isn't as simple or accurate to say a card's FMV is what it just sold for in the most recent auction.

What you are missing is the potential inclusion of potential buyers who did not participate in that auction on that day as possible changes in market demand:

Quote:

Originally Posted by egbeachley

Except that after that sale occurs, that buyer is no longer in the market and the “price” becomes what the next person will pay. And now we are back to the auction scenario of second highest bidder plus one increment

Franklin was wrong!! A penny saved is worth more than a penny earned. You will have to pay tax on a penny earned and it is therefore worth less than a penny whereas a saved penny is in post tax dollars and worth a full penny:

Quote:

Originally Posted by drcy

As Benjamin Franklin said, "A penny saved is a penny earned."

SUPER question! Any tax professionals?:

Quote:

Originally Posted by BeanTown

So for those PWCC customers who want to take their items out of the PWCC vault, will that create a taxable event?

Firstly I don't think your assumption is accurate. That said, as I think you stated in another post - how you determine your asking price for cards you sell - we do the best we can with the information we have and make individual choices of what makes sense or works for each of us:

Quote:

Originally Posted by Peter_Spaeth

So let's assume PWCC prices have been widely inflated AND they have had a gravitational effect on other prices. The whole market is inflated. What's the appropriate response assuming you still want to try to win certain cards?

Perhaps a new term needs to start being used - "Auction price" rather than "market price" or "fair market value". I have sold comparable cards for more and for less than recent auction sales. A single auction (or other) sale is not a reasonable determinant of "fair market value". It was the highest price a specific auction participant was willing to pay for that card on that day - it is certainly a relevant piece of information in a market value conversation, but not market value in and of itself:

Quote:

Originally Posted by Aquarian Sports Cards

Market price at auction needs two people to determine it accurately, and they need to be working in good faith. If one person is willing to pay $100 and the next highest is willing to pay $50, the market price is one bid past $50, not $100.

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