Auction closing methods - individual vs. simultaneous lot closing

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Posted By: Eric Brehm

In the Mastro auction EACH lot closed after no bids had been received on it for 30 minutes. In REA's auction ALL lots were to be closed simultaneously when no bid had been received on any of the lots for 15 minutes, but as it turned out they closed the entire auction at 3:00 AM EST, because of the lateness of the hour, after giving warning that they would do so. Which method is better for bidders?

Seems to me like the advantage of simultaneous lot closure is that it gives bidders maximum flexibility to allocate their finite resources to the lots that they want most and can afford. With individual lot closure, if you desire to shift your resources away from lots that have been bid up beyond your maximum, you can only choose from among those lots that still remain open.

The advantage of individual lot closure is that you can go to bed as soon as all lots that you are possibly interested in have been closed, which may occur long before the last lot in the auction closes.

While neither method prevents bidders from prolonging the bidding on any particular lot into the wee hours of the morning, it seems to me that the individual closure method is probably better for those who are focusing on a small number of lots and want to get the matter resolved at a reasonable hour. The simultaneous closure method is probably better for those who are juggling a large number of lots against a finite budget and want to maintain the most flexibility.

Other thoughts?

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Posted By: Fred C

IMO - I like lots that close after a set period of inactivity (no bids) rather than closing the entire auction at one time. But, I also believe that auction houses lose out with this method because it doesn't allow for that last moment irrational "I want to win something" bid. I have to figure those bids add up to a few dollars and add to the bottom line. How much? I don't know. I do know that I was high on a lot In REA until the last hour because when I went to bed (near 2AM EST) I was on top. Well, I wasn't this AM...

It would be interesting to see if the auction houses analyze the numbers. My guess is that customer satisfaction would be higher in auctions where lots closed after a set time of inactivity. Perhaps the few dollars (or however much it is) drives the auction houses to keep all lots open FOREVER (it seems).

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Posted By: Joann

It seems to me that having the entire lot close at the same time is the best for the sellers. If there are X total buyer dollars available to be spread around the entire auction, the single closing time maximizes the probability that many or all of those $X will actually be spent somewhere in the auction.

If single lots close individually, then it's almost assured that $X will not be spent. Someone getting outrun on a lot he wants may look around and see that there is nothing left open that he's interested in, so his money comes out of the pool of $X and now there is less money for the entire auction. I imagine that the single lot closing method leads to dozens or even hundreds of bidders withdrawing b/c they got outbid on something and weren't interested in whatever else happened to still be open.

So even though the auction house can't allocate the dollars or assure an individual seller that keeping the $X pool will affect his lots, they can certainly know that they kept the pool as large as possible for as long as possible by assuring that each one of the $X had somewhere to be spent, right up until final close.

The only people that really benefit from single lot closings are the buyers. They can win something at a lower price if the lot closes while other potential bidders are trying to focus on primary lots.

It also favors buyers that don't want to be up all friggin (@tbob) night trying to win something. That's no small thing, but it's hard to argue that an auction house should diminish its primary duty to maximize seller return just so people can get to bed earlier.

No good answer. Maybe it's to start extended bidding at 10:00 a.m. on a weekend, or something.

Joann

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Posted By: Richard Masson

Mastro's methodology is vastly superior. It encourages participants to bid up to a near final price well before the end (good for consignors, nothing overlooked) and sets it up such that those lots that are "in play" or contested will have the bidders on line together at the end to settle it (maximizes realizations). REA's way of doing it discourages bidders from being aggressive until the last possible moment and does not foster the head-to-head competition for certain lots that results in good (or better than good) realizations for consignors. I might be competing for something, yet hours pass between bids for that item. Staying up until all hours of the morning just to see if a counter bid gets made is silly.

I know that Rob makes the argument that his way (a holdover from the old phone call-based auction model) is better for small buyers because they can switch between lots to find bargains. While there may be some truth to this, wouldn't the presence of bargains for purchasers imply the opposite for consignors? I don't see many things fall through the cracks at Mastro, but wouldn't be surprised if it happened in REA. I was certainly prepared to go higher on several items if I had any competition directly.

I have a great deal of regard and respect for Rob personally and how he conducts his business, but I feel it is time for him to adopt the hobby's "best practices" with respect to auctuion endings. On the other hand, if he doesn't change a thing and disagrees with eveything I have to say, we will still be friends and continue to do a lot of business together.

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Posted By: Corey R. Shanus

No real right or wrong to this question and one's answer probably depends in large measure on what perspective one is viewing it from and the resources at his/her disposal. If there are only a few lots I care to bid on and my bids on each are independent on how I fare on the others, then I would prefer the individual closing lot method as most likely it would allow me to get to bed earlier. However, if there are multiple lots I am interested in and how much I bid on any particular one is dependent on whether I win another (and at what price), then the simultaneous closing method would get my vote. Sure I may stay up later, but I guess that is a price I am willing to pay to build my collection. In the case of REA, over the past several years, there have been instances where I have been outbid on my highest priority lots, which then induced me to bid on other lots (which are now valuable parts of my collection). Had Rob's auctions been conducted on the individual lot closing method, then quite possibly I would not have these items in my collection.

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Posted By: Joe D.

I went strong for one lot... but if it would have gone higher than I would have liked - I would have switched my bidding and focus to another lot that I had an initial bid on.

So with that in mind - simutaneous is good for the auction house / good for the seller / good for the buyer.

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Posted By: JimB

One issue that can really throw things out of whack on the Mastro method is the new trend of selling sets as either individual cards or as entire sets. With multiple lots in play which keep all of the individual lots going, that group will inevitably go much later that other individual lots in the auction. Thus by the time it ends, the loser(s) will have no opportunity to go for second choices. This happened this time with the '38 Goudey set and about a year or so ago with the high-grade E93 set. I personally wish this problem was solved by ceasing the trend of auctioning a lot off in two ways simultaneously. This is only one of several problems with this.

Other than that, I think Richard makes a good point in highlighting how the Mastro method brings people to near their high bids much quicker and brings the final people head to head.
JimB

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Posted By: Robert Edward Auctions LLC

I realize that there are different opinions about how to best close an auction. Maybe there is no one perfect answer. I agree that every style has its plusses and minuses at different times for different bidders. The fact that REA very smoothly closed 1594 lots in one night, (more than any other auction ever, that I can think of anyway, utilizing any other type of auction closing style), and also smoothly closed lots representing far more volume in terms dollars (the auction total was $8.7 million) than any auction in this field has ever closed in a single day utilizing any other type of auction closing style ever (at least that I can recall) has got to count for something. The system does work and is fair to bidders and consignors. Some alternate auction closing styles which attempt to close even just 500 or 600 lots in one day have continually run into serious technical problems. We’re always giving thought to change and would never rule out modifying how we close the auction some day in the future. It’s always a work in progress! In case it is of interest, the following is the text of the essay regarding this very topic - different auction closing styles - that we sent out to our customers by email in July 2006.

Sincerely,

Robert Lifson
President
Robert Edward Auctions, LLC



Auction Closing Styles: Who Wins, Who Loses, and Why?

One of the ongoing areas of discussion regarding auctions is how best to close the auction. There are many different styles of auction closes. Each has its pluses and minuses. Depending on what one values most highly with reference to these plusses and minuses, and whose interests are at stake, different people could prefer different styles of auction closings. The one thing everyone agrees on is that every auction must have a mechanism to allow an orderly close, and one of the functions of every auction style is to provide an orderly close. At Robert Edward Auctions, our goal is to make sure that every lot sells to the person who is willing to pay the most. We believe this is the ideal both for our consignors and for buyers as well. If a bidder is willing to pay the most for a given lot, that person should be the winning bidder for that lot.

Robert Edward Auctions closes all lots simultaneously (Auction Style #1 below). The following is an outline of the three general styles of auction closings most commonly associated with catalog auctions, and a brief summary of "Who Wins, Who Loses, and Why" associated with each style. (Please note: We recognize that an endless number of minor variations of each auction format exist or can be created, particularly with reference to styles #1 and #3 below).

Auction Style #1) The REA Auction Format: All lots close at the same time. This is the style of auction used by REA. All initial bids must be received by a given time (often referred to as "the witching hour"). The auction for all lots continues after this time, but only for those bidders who have previously bid on the given lot. In this way, on closing day, the field of potential active bidders for any given lot is narrowed down from a cast of literally thousands of potential bidders to a manageable number of bidders (those who have expressed a serious enough interest to place at least one bid on the item at some time during the several weeks the auction has been open for bidding prior to closing day). In this way, bidders are actually rewarded for placing bids. This is unlike Live Auctions or eBay auctions, where bidders are rewarded for not placing bids until the very last second. The early bidding activity encouraged by the REA auction format also has the impact of making serious bidder interest in lots transparent. This, in turn, can make bidders aware of significant interest in a given lot, at times understandably giving some bidders more confidence to bid on a given lot, as well as, at other times, calling attention to lots that for some reason are being overlooked, thus encouraging more bidding on those lots. As bidders are outbid and declare they are finished with a given lot, they still have time to think, and reconsider coming back in as a bidder. The decision to let a lot go doesn't have to be made in a split second, after which the opportunity to continue bidding is lost forever. Until the very final closing day of the auction, a bidder can decide they are finished with a given lot, because it just isn't worth it them, and then, after further consideration, get up the next day, change their mind, and place one more bid. This may have little or no impact on relatively common items, but can be very important when dealing with extremely rare and significant material with an unknown but great value. Even on the final day of the auction, bidders are not shut out of the bidding process until all lots are closed at the same time, and all bidders are finished bidding on all lots. Each lot in the auction continues to remain open to previous bidders until a given stated time, after which the entire auction is closed without warning at the discretion of the auctioneer. The lack of a precisely known closing time encourages all bids to be placed (rather than a bidder risking the auction closing without having placed a bid that the bidder does, in fact, wish to place), encourages maximum "up to" (or "limit") bids to be placed ("Honest Auto Bid," utilized only by REA, is an essential element of this system, allowing bidders to place maximum bids with the knowledge that no one in the world, except the bidder, is privy to the limit of your bid), and encourages call-backs to be requested. Bidders are all on the same playing field and are all armed with all the tools required to ensure that the only reason they do not win a given lot is
1) they don't want it, or 2) the lot went too high. The auction is not closed until all call-backs are made, and when the auction is closed, the high bidder on every lot is the person who is willing to pay the most. And that's exactly what auctions are supposed to do. This system is great for bidders in that every lot goes to the bidder who is really willing to pay the most, and great for consignors in that the process is designed to ensure that each lot is really sold to the bidder who is willing to pay the most. In addition, bidders have also enjoyed the ability to transfer their purchasing power from one lot to another on all lots as they have been outbid on given lots, a process that is only effectively allowed by the REA auction closing style. This naturally promotes higher prices, which is great for consignors, while at the same time allowing bidders to not get shut out, which is great for bidders.
Remember: in a Live Auction, all lots are sold in lot number order, one at a time. If a bidder in a Live Auction is interested in Lots #1 through #10, but is most interested in Lot #50, that bidder might not bid on Lots #1 through #10, because the bidder is waiting for Lot #50. Only one bidder can win any given lot. In a Live Auction, if the bidding on Lot #50 goes too high, the bidder cannot go back in time and bid on Lots #1 through #10. In an REA style auction, it is as if they can go back in time, because Lots #1 through #10 and Lot #50 all close at exactly the same time, so the bidder can still bid on Lots #1 through #10. And that is exactly what bidders do. When dealing with auctions of many lots involving the same collecting field, such as baseball cards and memorabilia, the ability to transfer purchasing power in this manner is a very powerful force, often resulting in higher prices. This is great for consignors.


With REA's style of auction, Who Wins, Who Losses, and Why? Consignors win, because all other things being equal (bidder confidence in the auction process, bidder confidence in descriptions, market conditions, catalog circulation, etc) their material will always sell for at least as much and in many cases more than any other style of auction. Some bidders lose because they pay higher prices than they would have paid in an auction with a different style of close, but bidders win also because they are not shut out of the bidding process for lots when one or more lots of primary interest go too high. It may be hard to find a bargain, but if there is something of interest, at least you can definitely get it, if the bidding doesn't go higher than your bidding limit. Bargains are more likely to be fewer and farther between, which means bargain-hunters may lose out. Winning bidders may have to stay up an extra hour or two to see the auction to its final conclusion, but that is a small price to pay for an orderly close in which no bidder is left thinking "I would have paid more" and no consignor is left wondering "Could I have gotten more?"

Auction Style #2) The "Live Auction": The "Live Auction" format has many flaws for both bidders and consignors. All lots close individually, one at a time, in real-time order. As noted in the discussion above, if a bidder in a Live Auction is interested in Lots #1 through #10, but is most interested in Lot #50, that bidder might not bid on Lots #1 through #10 at all. If the bidder is outbid on Lot #50, unfortunately the bidder can't go back in time and bid on Lots #1 through #10. This means that Lots #1 through #10 sell for less than they otherwise would sell for. This is not good for consignors. Also, bidders have to be very nimble to participate in a Live Auction. They either have to be there in person, have a representative bid for them in person, leave their maximum bid with the auction house to execute for them, or, if phone bidding is available, be available by phone during the exact moment that the item comes up for auction. There is no margin for error with reference to time. It's quick. It's final. The Live Auction process communicates no hint of bidder interest or price discovery until the few seconds during which the lot is hammered down. There's no time to think about whether to go higher. If items are selling for very low prices, there is no opportunity for bidders who are not present to become aware of this and bid accordingly. There is no tomorrow. As anyone who has ever attended a Live Auction knows, most have very few bidders in attendance. Images from movies in which million dollar paintings are hammered down before crowds of thousands are fiction. In the real world, attendance of even a few hundred bidders at a baseball auction is huge and very rare. The very best material can sell for strong prices in a live auction. The Halper Auction (which REA oversaw) is a perfect example of this, and there are certainly others. But if you do not have the most valuable collection in the world like Barry Halper, and you are the consignor of a collection or item in a "Live" auction in which very special auction promotion is not provided and devoted to your item (and it usually isn't), you almost always need a very strong reserve to ensure that your item will not fall through the cracks and sell for an extremely weak price. This fact is well known and often further contributes to the "Live Auction" being an unexciting buying environment for many collectors. Evidence of this is the many "passed lots" of Live Auctions that do not sell. There is always a special excitement in a live auction when "the big item" comes up, but that excitement is shared by just the few people in the room, and that's the part of the problem. (Compare this with the thousands of people sharing the excitement of big items online in an REA auction). The "Live Auction" traditionally offers the greatest opportunity for bidders to bid against a secret reserve (which is how almost all "Live Auctions" work).

Live Auctions: Who Wins, Who Loses, and Why? When items have reasonable reserves, there is no better auction format for a buyer to potentially get a bargain. The most dedicated collectors and dealers find "Live Auctions" to offer the greatest buying opportunities. There are plenty of bad deals too, often because of high reserves, so we're not saying you should go to your nearest live auction and start bidding like a madman! You have to know what you're doing, and be willing to invest the time and effort to go the auction. Live auctions rarely have ideal catalog descriptions. If you go to the auction and see the items in person, you might be the only one in the world who really understands the condition of an item or even what's in a given lot. Few people are willing to do this, and those that do are often professional dealers looking for bargains. Who Loses? The consignor loses, because of the lower prices some material sells for. (The collecting world is also rich in stories in which the few serious bidders at a Live Auction get together to not compete against one another as a courtesy, or buy material together to split later, thus depressing price levels further.) Who else loses? Bidders who are outbid on lots and wish they could go back in time and bid more on previously closed lots. Bidders who cannot attend the auction and choose not to bid because they do not feel they are bidding on a level playing field. Bidders who are extremely interested in a given lot but are taken totally by surprise at the high price level of a given item also lose, in that these bidders so often would have adjusted their thinking and continued to bid, possibly even winning the item, if only they were given the time to think about it and perhaps do some quick additional research. Again, the most dedicated, prepared, professional collectors and dealers are best suited to benefit from the "Live Auction" experience, at the expense of less dedicated bidders and, once again, at the expense of the consignors.

Auction Style #3) The "Staggered Close" Auction Format: Lots close individually, each on a separate clock. After a specified time each lot is closed individually if a new bid is not received within a small window of time (usually 30 minutes) after the "witching hour" on closing day, and the closing time of each lot is then extended for this same increment of time if a bid is received. This style of auction allows lots to close at different times, with the most hotly contested lots remaining open the latest. At a glance, this style of auction might appear to have much in common with the REA auction style format, but this style of auction, in fact, has a great deal more in common with the "Live Auction" format. With the "Staggered Close" auction format, because lots close at different times, and because the most desirable lots remain open, if a bidder is outbid on a given lot and then wishes to transfer his purchasing power to another lot, in most cases he cannot, simply because (as is the case with the "Live Auction") the other lots of interest are now closed. For some lots, this factor can mean much lower prices for consignors. Because so many lots are closing at different times, bidders can also find it confusing and challenging to bid on multiple lots, and can sometimes unintentionally get shut out of the bidding entirely on lots which they would otherwise have continued to bid on. Like a "Live Auction," the auction for some lots may still be going on, but if the lot that you are interested in bidding on is now closed, it doesn't help you much. And it doesn't help the consignor either.

The "Staggered Close" Auction: Who Wins, Who Loses, and Why?

Who wins? Bidders who are sometimes able to win lots cheaper win. "Staggered Close" auctions tend to close earlier than REA style auctions by a couple of hours, so some could say that this benefits all participants to that extent, but at great expense to bidders and to consignors. In auctions in which auction house employees, auction house executives, and the auction house itself as an entity are permitted to bid in the auction, those special bidders also have the potential to benefit from the auction Staggered Close auction format, so they also win. Who loses? Bidders who would have bid higher on given lots, but are but are shut out of the bidding process because of the auction format, and, once again, the consignor. (Note: As most bidders know, REA has a strict formal policy regarding executive and employee bidding which reads in part: "Robert Edward Auctions does not have a "house account" and under no circumstances is any executive or employee of Robert Edward Auctions, LLC ever allowed to place bids in the auction.")


Each of these three styles has its plusses and minuses. Each of these different styles of auctions requires a different level of commitment from bidders.


The Live Auction requires the greatest commitment: Bidders have to attend in person or be available at a very specific time - usually within a specific window of ten or twenty seconds of time. If you are not available, if the bidder cannot make this commitment, if anything goes wrong (a phone call missed, not being aware of the time, an unexpected distraction, human error, etc.), the bidder is out of luck. And so is the consignor.

The Staggered Close Auction requires a more modest commitment than the "Live Auction," but bidders still have to be on top of the closing of all lots of interest in a very time-sensitive manner, with no margin for error, or you will be shut out of lots of interest.


The REA style of auction requires the least commitment. No lots are going to unexpectedly close on you. Bidders only have to be able to remember the day of the auction. If a bidder can't remember the entire final day of the auction, that bidder would probably have a much tougher time remembering and being available for the thirty minute window required of the "Staggered Close" auction close or ten second window required of the "Live Auction" format.


REA enjoys promoting thought about the auction process. We discuss these issues on an ongoing basis, with bidders and with consignors. One quick amusing story to close: Our most vocal critic was always trying to convince us, in a friendly way, to close our auctions using the "Staggered Close" auction format. We patiently explained why we didn't want to do this, although we understood why he, as a buyer, would prefer it. He was relentless, always debating with us and trying to convince us to change. When he decided to sell his million dollar collection with Robert Edward Auctions, we informed him that we do, in fact, have the programming to provide a staggered auction close for him, and since his consignment was so big, if he wanted his section of the catalog to be handled in this manner, we could accommodate him. The response, sounding like an otherworldly howl by a wounded demon from a scary movie, was hard to even decipher at first but was actually a resounding "NOOOOOOOOO!!!!! ARE YOU CRAZY?" Well, the story speaks for itself. What type of auction format close one prefers depends on what your interests are. The same can be said of all the elements that define a given auction. There is no one right answer. We're always searching for what we think are the best ways to run our auction, and for us this is an ongoing process. We realize that analyzing details of the auction process is not for everyone, but for those who are interested - especially potential consignors - we hope you have enjoyed reading about it.

Sincerely,

Robert Edward Auctions, LLC

www.RobertEdwardAuctions.com

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Posted By: peter chao

I would think it depends on the number of lots you want to win. If you want to win one lot then separate closing times make the most sense. If you want to win lots of lots then having simultaneous closing times make the most sense. It really isn't that complicated.

Peter

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Posted By: Jeff Lichtman

Rob's explanation makes sense. However, a) it is unfair to the East Coast guys; and b) couldn't you just have a drop dead time of, say, 1 am? And that's it? An example of the insanity that REA's format can cause can be found in one item I was bidding on. By 4 pm yesterday, weeks after the auction started, there were just 5 bids on the item with a top number of $1400. During the extended part of the bidding process, from 4 pm until 3 am, there were an additional 20 bids and the item closed at $6000. This format does not cause large bids early on. Instead, the few guys that wanted the item bid very early and then waited until the last possible moment to put in bids.

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Posted By: Frank Evanov

Ron talks of fairness, but the REA method of closing the auction at their discretion is unfair to us East Coast guys. I went to sleep at 12:45 PM last night not knowing if I won anything AND if I was outbid, I would not have been able to re-bid on that item or bid on another item that I had been outbid on. And I don't want to hear about Max bids...that's not a reaonable option.

Mastro's system is excellent. Most lots are closed by 12:30 PM EST; that's what I call fair.

Frank

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Posted By: Wesley

I like the REA format. If I am outbid during afterhours, I can turn my attention to another lot in which I have a preliminary bid.

The Mastro 30 minute format makes it hard to go for the backup lots on the last night. By the time you are outbid on the lot your were concentrating on, the other lots may already be closed.

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Posted By: barrysloate

All the auctions close too late, giving the West coast bidders a huge advantage. I find both styles very user unfriendly. But since I am a small bidder, I don't expect any of them to listen to me.

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Posted By: Eric Brehm

One problem with having a "drop dead" time for an auction is that you end up with a sniping contest in the last few seconds. That is essentially the way it works on eBay. If all lots in a large auction closed simultaneously at a pre-determined time everyone would go crazy trying to get their final bids in. Having the clock re-set each time a bid is placed helps mitigate that problem, because it always gives the underbidder time to react.

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Posted By: JimB

I don't see a problem with West coast bidders having an advantage.
JimB

P.S. Rob tried by having the auction close on a Saturday afternoon. But it still went all night long.

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Posted By: Richard Masson

The "close everything at once" method is an archaic holdover from the days of phone auctions. With the capability of the internet, shouldn't there be a way to closely mirror a live auction on line? Perhaps lots should close using the 30 minute rule but do so sequentially. That way, uncontested lots close and those with multiple bidders get resolved over time. There is just no logical reason for it to be a contest of who needs the least sleep.

If REA keeps this format, they need to find a way to entice bidders to get closer to their bottom lines sooner. Otherwise no one makes a real bid until well after the expected closing time.

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Posted By: Jeff Lichtman

"Having the clock re-set each time a bid is placed helps mitigate that problem, because it always gives the underbidder time to react."

--But we never got to see the clock reset on REA.....

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Posted By: barrysloate

Okay- I have the problem solved, and here goes:

Both Mastro and REA have flawed closing systems. Bidders in Mastro can't go back to lots that have closed, and REA's system is interminable. You wait hour after hour for it to close, you've been high bidder for half the day, you don't know if it's safe to go to bed, it's just a disaster. So this is it:

At a reasonable hour, say 11:00 PM Eastern time, a message goes on the home page "this auction closes in 90 minutes, no exceptions." There can be periodic reminders or a descending clock. The point is there is no sense of urgency in an auction that goes to 3:15 AM. You can be high bidder for eight hours, go to bed at 3:00 AM, and lose the lot at 3:05. Sure, a few bidders will complain they couldn't get their bids in at the end, but every auction and every format has the same complaint. I believe REA could have closed at midnight Eastern time and gotten the same realizations if people knew they had a deadline to bid. Without a deadline, it just drags forever.

Ebay has a finite clock, live auctions have a hammer...and catalog auctions seem to never end. That's the solution.

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Posted By: Richard Masson

provided, however, that if a bid is made on a lot at the last minute, the underbidder has a chance to respond.......then you are back to Mastro's method.

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Posted By: Jeff Lichtman

Well, how about this for the compromise:

Reduce Mastro's 2 hour extended period to 1 hour; then have a 30 minute clock for 1 hour, and then a 5 minute clock till it ends. In this way, the final bids, if any, will be fast and furious and it ends.

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Posted By: John

All of Rob’s scenarios make sense and agreed all have their pros and cons. I do however agree with Jeff on their needs to be someway to get a deadline set in stone. Also agree with Jeff just reset the clock on each lot....my thoughts were the same.

I was also confused on why REA changed the end time in the last seconds of the auction it said 2:00am then at 2:00am it changed to 3:00am…

Bidding until almost 4:00am is a bit nuts, there has to be a better way. Besides do you guys know what’s on TV at 4:00am in the morning?

Not only did I spend thousands of dollars with Rob but also I bought real estate videos from 2 midgets, a Showtime Rotisserie Oven, Chuck Norris’s Total Gym and book from some guy telling me about secret government money to help me buy baseball cards or even go back to school!

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Posted By: barrysloate

Richard- the point is you have to figure it out. How do you win a lot on ebay when you know there is only a minute to go? You figure it out. The same is true with the catalog auctions.

If you are interested in ten lots you don't wait for the last minute. You decide your maximums and you leave them with enough time to spare. Sure, you are going to lose a few lots you really wanted...but everybody loses a few lots they really wanted. Nobody gets everything. That is already predetermined when the auction begins. So let's cut to the chase and get it over with.

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Posted By: S Gross

From a loser's perspective:

I'd rather go to bed knowing I'm a loser,
Than waking up in the morning and realizing I'm a loser.

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Posted By: barrysloate

John- one of those brothers died a couple of years ago, so I know for a fact you didn't buy something from both of them. They were bigshots in Florida, their home turf.

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Posted By: John

I had heard about that Barry, the story I heard was that he died at his computer waiting for an auction to close or something?

They found the poor little guy slumped over his keyboard the next morning…tragic…

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Posted By: Jay

I agree with Richard on this; I much prefer the Mastro method of closing auctions. All systems have problems with fund reallocation. Even under REA's system if you leave an up to and are topped after you go to bed (not an unusual occurrence for us East Coasters)then you have no opportunity to reallocate these funds to other items. No system is perfect but I believe the Mastro system is orderly and that is a real plus. One suggestion however, lose the aggregate vs single lot bidding. The fact that bidding on the full group or any individual lot in the group extends the auction for 30 minutes is crazy. Consider the case where the aggregate is at $100,000 and the individual pieces sum up to $60,000. Someone wanting to screw with the auction could just keep bumping the lowest priced individual piece every 29 minutes and run the thing all night without any risk of winning the lot. The method is confusing and, if anything, I believe it discourages bidding on these lots.

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Posted By: barrysloate

REA's preliminary bids ended at 4:00PM and it still went another eleven hours. Why? Why did it need another eleven hours to resolve? So people could sit idly for ten and a half hours before they needed to place their final bids? I think a few people may have died from boredom.

Create a sense of urgency. Create a sense of anticipation. Dragging it out that long is counterproductive. I bet there is a percentage of bidders who got fed up and just quit. How many hours can you sit at your computer before you say "I've had enough, I'm going to bed."

Don't turn the auction into a yawning bore, find a way to create some bidder excitement!

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Posted By: Robert Edward Auctions LLC

Just for clarification, the email we sent out to all bidders on closing day to review how the auction ends appears below. We did not change the rules of the auction. The only change made was to the wording on the bidding page message relating to the ANTICIPATED auction close time from “we do not anticipate the auction to continue past 2:00 AM” to read “we do not anticipate the auction to continue past 3:00 AM”. We did this because when 2:00 AM was fast approaching (at about 1:45 AM) it became clear that we would close until after 2:00 AM. and we just did not want the message to reference an anticipated closing time that had past while the auction was still active.

Sincerely,

Robert Lifson

Robert Edward Auctions, LLC


Subject: How The Auction Ends: A Quick Review

Just a quick review on how the auction closes: Bidding will continue on all lots after 4:00 PM EDT, but only for those bidders who have previously bid on that very lot. The auction will remain open for bids until approximately fifteen minutes pass without a bid, but as a practical matter, the auction will almost certainly continue for many hours after 4:00 PM EDT. If the auction continues to as late as 11:00 P.M. EDT (which has always been the case in the past), Robert Edward Auctions reserves the right to close the auction, at its sole discretion, at any time. After 11:00 PM EDT, we may close the auction without reference to the fifteen minute rule. We recommend bidders leave maximum left bids utilizing Robert Edward Auctions’ “Honest Auto-Bid” system to avoid disappointment. There will be no warning to exactly when we will close the auction should bidding continue past 11:00 P.M. While we do not anticipate the auction to remain open past 2:00 A.M. EDT (technically the morning of April 29, 2007), we cannot make any guarantees. The auction could close earlier or later. Last year the auction closed at 3:00 A.M. After 11:00 PM there is an uncertainty. If you choose to not place a bid after 11:00 PM, you are incurring a risk. This closing system is designed to reward bidders, and eliminate all strategies which needlessly encourage the auction to remain open many hours into the following day for the express purpose of giving an advantage to bidders who have the ability to stay up all night. (Some bidders, if given the opportunity, would repeatedly bid on the smallest value items just to extend the auction, in the hopes that competitors on very significant lots will fall asleep. This closing system takes the power away from bidders who use this strategy.) The auction goes late enough as is. Remember: we are closing 1594 lots in one night. This is far greater number of lots than other auctions utilizing different closing procedures. This system works. It is fair to bidders and fair to consignors. There are only two reasons acceptable to us for a bidder not to win any lot of interest in this auction: 1) You don’t want it; or 2) It went too high. When the auction is over, callers will be greeted with a message informing them that the auction is over, and a message will also appear on our website stating that all bidding is closed. All lots remain open for bidding until the close of the entire auction. We won’t close the auction until the bidding slows to a virtual halt and all callbacks have been made. All lots are closed simultaneously.

Thank you and Good Luck!

Sincerely,

Robert Edward Auctions, LLC
www.RobertEdwardAuctions.com

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Posted By: DMcD

John Wonkaticket: Thanks for the laugh!

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Posted By: Cobby33

Obviously, an across-the-board, auction-until-perpetuity, benefits not only the auction house, but the consignors, financially. Thus, there is absolutely no incentive for any auction house not to proceed this way.

eBay's closing system seems to work fine. Have a set ending time and just close it already!

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Posted By: John

Rob,

I didn’t imply that you made changes to the rules of the auction, just the estimated closing time that’s all. Sorry if I didn’t make that clear.

Rob I enjoyed participating in your auction don’t get me wrong, and my issues with how auctions close apply to all so nothing personal. I also understand your trying to run a business and maximize your consignor’s profit, as well as your bottom line.

However I would be lying if I didn’t say that walking back and forth to a computer for 7+ hours until the wee hours of the morning doesn’t get a bit old.

I can’t help but think there’s a better way…

John

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Posted By: Bruce MacPherson

In REA, I won one lot and I had one consignment in the auction. The price on both was the same at 4:00 as it was at the end. I continually checked the auction until 2:00 am (10 hours) anticipating movement on either lot. Therefore, I tend to prefer the Mastro method. However, had my consignment gone higher, I might be singing a different tune.

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Posted By: barrysloate

To repeat, it took REA more than eleven extra hours to close, keeping East coast people up until past three in the morning.

Don't you think the same result could have been accomplished in eight hours, and have the auction conclude by midnight? Do you think most bidders were spending eleven solid hours getting all their bids in? Of course not- nearly all of it was dead air, just waiting and waiting to see if they were going to get topped. And in theory if you really want something you can never go to bed if you don't request a callback. Because no matter how late it is you still run the risk of being topped by another bidder.

Over the years the auction houses have continually fine tuned and revised the rules to make things work better. Well guess what, they still have some work to do. And this is no insult towards Rob- his auctions are wonderful and we have been friends for a very long time. But the rules need revision.

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Posted By: Frank Evanov

Agree Barry.

From the REA rules: "This system is designed to reward bidders, not the person who can stay up the latest."

Well that's just not true. It rewards the guys who can stay up to 3:00 AM.

Frank

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Posted By: Joann

And once again, Jeff Lichtman nails it. Perfect solution - entire auction closes at once, but the 30 minute rule only goes an hour followed by decreasing inactivity periods - five minutes sounds great.

It allows people to reallocate if they are outbid on something - all they have to do is hit a bid on their next most imporant lot within the 5 minutes. How hard is that? Keep two browsers open so you can flip from lot to lot on your bid list and know that if your #2 is also beyond your max, you just flip to #3 and #4 and so on. I think this could definitely be done in 5 minutes.

But this idea also gives the sense of urgency that Barry so correctly points out is needed. Come to think of it, why DOES it take 30 minutes for someone to figure they are outbid and move on to something else? Taking their time looking through their second choices? It would require that people have a priority ahead of time, with the max for each one in mind.

To me this sounds like everyone wins. The consigners get to keep more money in the auction by allowing people to shift to a new lot. It retains Rob's point above (and a very good one, by the way) that a lot will generally be won by the person willing to pay the most. It's fair to everyone, and it allows a reasonable time for the same conclusion.

What am I missing here? I just can't poke any holes in this idea. (Well - maybe just one: Rob, you'd have to make sure your servers are blistering fast!! lol)

Joann

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Posted By: Marty

I like everything closing on one night. I do not want to save for the next night and then find out that I am priced out and I have already passed the night before.

I want a page where I can delete the lots that I have bid on but no longer have an interest in following. With REA, I havd 35 lots that I bid on that took a while to refresh and then I had to scroll up and down to look at everything. If I could knock off 25 lots and have an automatic refresh every few minutes, I would know if I was out bid. With Mastro, the lines are closer together, but I still have my list littered and I can see how much longer before it is over.

I want a system that is not so slow that it takes 20-60 seconds to go to a lot and place a bid. I am glad that I have cable. A five minute clock that I could see would cut the time down. There are bidders who place a bid every 14 minutes to drag the night on and wait to bid on the items they most want until late. If the auction would close when there was less than 5-10 different bidders in a 5 minute period, that should help. If there are two people bidding quickly on the same lot at the end, call them on the phone or let them continue.

I want my bid page to show what my last bid was and the current bid. On the final night, I don't care much what the starting bid was, this is of no value to me. I want a column that tells me what my total with vig is and a total for everything that I have bid on. On a $15,000 item, I think that the next bump being $1800 with vig is a little much, and $250 is little low.

I know that little of this will be considered, it is just part of my want list.

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Posted By: Richard Masson

I think that the belief that an extended, simultaneous closing benefits consignors is a myth.
When fair prices depend on bids made late in the auction, as opposed to throughout and up to closing, items get overlooked.

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Posted By: barrysloate

I think we all agree that the system is still flawed and can use some improvement.

An auction that goes to 3:00 AM is long and tedious and keeps everybody up too late, even for a Saturday. And in a system where each lot has its own 30 minute clock, bidders who are going after multiple items will find it will be too late to return to some of them.

Is anybody listening? Can we get all of them to look for ways to make things a little more efficient?

Of course the fact that nearly everything is too expensive is a whole other issue, but that isn't anyone's fault. That's just the market

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Posted By: Anonymous

Actually,
I probably would have bid more on the lot I was interested in if the auction had ended while I was still awake. I couldn't bring myself to put in the amount needed for the autobid but am pretty sure if I had seen the lot bid up while I was still awake I would have pressed the button as I would have been a little more caught up in the moment. As it is I never saw the closing.


Adam B

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Posted By: FGN

While both systems clearly have their shortfalls, in my opinion, the REA system is the lesser of two evils (three if you want to include a live auction format). In a large auction most collectors have an interest in multiple lots and need to prioritize based on want and on cost. I personally would rather sacrafice some sleep and have my options open on all of my lots until the auction closes.

I do however think that what Rob did last night by closing the auction at 3:00am was an improvement over the general 15 min rule. He warned that this might happen but no one knew for sure. An absolute closing time would encourage sniping but the fear of the unknown can only encourage earlier competitive bidding.

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Posted By: Mike

I targeted the lot I wanted and at almost 11pm entered an honest autobid in the amount of $6k which made me high bidder at 4k. I went to sleep and woke up at 3:09am to the glare of my laptop and saw auction was still going but I was happy to see the auction ended minutes later and I was the winner still at the 4k mark. Great auction and if someone on the west coast wanted it for more than 6k, it would have been theirs. As far as I am concerned it hurts the next morning when you get beat by 1 increment.

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Posted By: Doug Allen

I have read this discussion with interest.

When you conduct auctions every other month you gain a lot of insight from your customers. We have discussed this at length with our customers and the results were not even close. The vast majority prefers the method we currently employ. Why did we ask? The auction process went through a strange dynamic with the concurrent close. It started with the West Coast having an advantage when the auctions closed at 2:00 a.m. to and East Coast advantage when they would set the alarms for 6:00 a.m. and the bidding was still hot and heavy.

We came to the conclusion that it was better to let the person who was willing to pay the most for the lot win instead of the person who was willing to stay up the longest. With this methodology a majority of the lots close by midnight central time and we are down to a few battles by 1:00 am.

I have to admit I have been thinking about a few modifications...there seems to be a low volume of activity from 9:00 pm to 11:00 pm so it may be appropriate to start the 30 minute timer at 10:00 pm.

Beyond a couple tweaks I really believe this methodolgy is superior.

Also sorry Jim but the selling lots individually or as a set has provided some very interesting dynamics. On the 38 Goudey set the individual who wanted the DiMaggio increased his own bid from $90,000 to $125,000 so that the "broken down" set would surpass the set price. Similar things have happened each auction. What has resulted is a true barometer of what something is truly worth. It has yielded a stronger result for consignors and a fair playing field for buyers especially those who don't want to chase something if they can't get the whole set.

All the best,
Doug Allen
President
Mastro Auctions

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Posted By: Jeff Lichtman

Doug's example regarding the DiMag Goudey makes sense. And since getting the highest prices for the cards is what matters to an auction house, I agree with his reasoning. It may be frustrating for the bidders at large, but it is not frustrating for the consignors.

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Posted By: JimB

I know that is true in some cases. I was guilty of that sort of bidding on individual E93s a few auctions back. But I also know of at least one case (a different auction house) where people stopped bidding on individual cards quite early when they realized the set as a whole was going to be won by a single individual

Perhaps an appropriate tweek to speed things up, if you want to keep doing those types of set/indiv card lots, would be a 15 minute rule on lots being sold two ways as opposed to a 30 minute rule on all other lots. I realize it could get confusing if people don't pay attention, but I imagine it could be highlighted.
JimB

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Posted By: leon

You had another fairly high end lot where the same thing happened. One bidder wanted one card so bid it up until the "lot" wasn't winning any more. The lot bid is much larger and, obviously, the lot bidder was done, so the consignor probably did a little better had it not been done that way. As a bidder I don't care for it but I guess as a consignor I want whatever method gives me the best pay out. I also like the lots closing individually. Maybe the 30 minute rule could be the 20 minute rule though? Best regards

edited grammar

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Posted By: barrysloate

In the end I guess there is no system that everyone will agree on. There are advantages and disadvantages to each. As long as each auction house is willing to review the system and make small improvements, that is pretty much all we can ask for.

Even with my small auction which I still close by telephone, half the people I speak to like the format and ask me to keep it, and half suggest I go internet. And at least all are polite about it, except the mysterious Sparky, whoever he may be.

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Posted By: Eric Brehm

Yes, there is no way to design an auction system that will please all bidders and all consignors in all circumstances. Perhaps some sort of hybrid system, along the lines of what Jeff L. suggested, is what is needed.

For example, REA's process could be foreshortened if they decided to close the whole auction at a point in time where the aggregate bidding rate had reached a certain minimum (rather than zero) within a particular 15-minute extension interval. Bidders would not be able to predict exactly when this would occur, and so would be encouraged to get their top bids in earlier, and thus get the whole thing resolved within a more reasonable time frame. I don't think sniping would be a problem, again because of uncertainty about whether or not the auction would be extended at the conclusion of each interval. And all lots would remain open and available for bidding throughout the entire auction.

But I suppose all of these suggestions for 'improvements' to the existing auction schemes could be continued ad nauseum...

Edited to add: I didn't start this thread to get any kind of 'REA vs. Mastro' thing going, but I thought the companies would benefit from getting feedback on how the auctions were conducted from the forum members here. Thanks to Rob and Doug for passing along their thoughts.

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Posted By: JimB

For a certain period after closing (2 or 3 hours) all lots are tied to the same clock, then after the designated time each lot closes individually on a 30 minute clock. Come to think of it, this is exactly what Mastro does since the 2 hour period of one clock is essentially no different from their "extended period".
JimB

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Posted By: leon

I think both systems have their merits and demerits. I would only ask one big favor for us old guys.....whatever you do start the extended bidding earlier, or have the auction end sooner, somehow !! It's not rocket science and there has to be a fair way where the auction could close at 12am EST. There just has to be a way.....or tell me why it CAN'T be done....pretty please.....Overall both REA and MASTRO give excellent customer service. We saw some disappointments (as a consignor) and some really high prices (as a buyer and also for some consignors). The best stuff keeps going up and the middle stuff is about the same if not a little soft, imo.....

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Posted By: Rich Klein

"We saw some disappointments (as a consignor) and some really high prices (as a buyer and also for some consignors)."

Leon, nice verbiage

Rich