New Idea for Ending Auctions Earlier

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Posted By: barrysloate

Steve Verkman's post got me thinking that there does need to be a way to have auctions end earlier, and perhaps monetarily penalizing a bidder after a certain time isn't ideal. So I came up with this new concept (and ran it past Leon):

Suppose an auction house begins its 30 minute clock at 9:00 PM. At that point there are many bidders participating, a good number who have multiple lots to follow.

At 11:00 PM, that 30 minute clock becomes a 15 minute clock. By that point a percentage of bidders are done anyway, and many with multiple lots have already crossed some of them off their list.

At midnight the 15 minute clock becomes a 10 minute or 5 minute clock. There are fewer bidders and fewer lots to negotiate, so now it's imperative that bidders wrap things up.

There are any number of ways to tweak that time constraint, but the idea is to end the auction at a reasonable hour. I really believe a good deal of the time in the wee hours of the night is dead time, with people waiting to get the last bid in. By condensing that time frame, everyone will be more productive.

My auctions generally end around midnight, but that is due to having only 100-150 lots. Auctions with a 1000 or more need to find some innovations to move things along.

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Posted By: Jay

Barry-You're trying to reinvent the wheel. Mastro has already solved this problem by closing lots individually. I think their system works great--realizations are good and most of the auction lots close around 12:30.

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Posted By: Doug

This is probably a dumb question, but why can't they just have a fixed ending time like ebay? That way people can just put in a bid without having to worry about staying up half of the night bidding back and forth. Some of us east coast folk have to get up early!

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Posted By: barrysloate

Mastro's may end at a reasonable time but REA tried to get their auction to close earlier and I think the last one went past 3:00 AM. Plus there are still problems with closing each lot individually, because you may want to jump back to a lot and will find yourself locked out. I know this has been debated too, but just trying to come up with something new.

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Posted By: barrysloate

If you had a set ending, the auction house would leave money on the table. What if two people are willing to spend $5000 for a lot, and with a minute to go it is still at $2000? It will sell for a lot less than it should have.

Also, if everybody put in their bids at the same time, wouldn't the system crash?

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Posted By: Doug

I was just guessing that it would be an incentive for people to put their max bid in before it closes instead of waiting and dragging the auctions on all night. It was just an idea.

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Posted By: Matt

Barry: "If you had a set ending, the auction house would leave money on the table. What if two people are willing to spend $5000 for a lot, and with a minute to go it is still at $2000? It will sell for a lot less than it should have.

Also, if everybody put in their bids at the same time, wouldn't the system crash?"



If two people are willing to spend $5k on the same card, why is one guy winning it for $2k? Why hasn't the other $5k bidder bid until now?

Secondly, as per our conversation this AM, I understand you're not too tech savvy, but if you're auction software crashes when two simultaneous bids come in then you need to find new software.

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Posted By: Joe D.

I like the idea of closing lots individually.

As bidder's get more used to that format... the end result (hammer prices) will be the same - but the vast majority of the bidders will be able to go to sleep at a reasonable hour.

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Posted By: Rob Dewolf

I've never understood why bidders in a phone or Internet auction feel they should be allowed to go back and bid Lot A, which has been closed, if they get outbid on Lot B. You don't have this luxury in a live auction, so why would a buyer feel he should be able to in a phone auction? I can understand why auction houses want to make this avenue available because they're out to make the most money they can -- especially in this sure-to-be-headed-for-a-recession economy -- and keeping lots open for as long as possible only benefits them. But how bidders have come to feel this is a right in an auction format is lost on me.

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Posted By: Jay

My sense is that ending an auction later does not increase realizations. If you simply announced that bidding would end at midnight EDT everyone who wanted to bid would get their bids in, all the battles would be fought, and everyone would get a good nights sleep, with the same results. EBay lots seem to realize top dollar and they have a fixed closing time. Auctions run all night because auctioneers think they can squeeze the last dollar out of each lot by doing that. Thank goodness that Mastro came up with a better mouse trap.

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Posted By: Wesley

For me, it is not a big deal to stay up a few times per year to watch the major auctions end. I am not fond of auctions closing each lot individually. On more than one occassion, I am outbid on lots in Mastro, and due to the system in place, I am precluded from going after a second choice lots.

As a consignor, I would feel like I left money on the table if my cards were in an auction with lots ending individually. If I had to sell cards, I would go with the auction houses that kept going with the traditional ten or fifteen minute rule.

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Posted By: barrysloate

Ebay does have a good system but to date no auction house has yet to utilize it.

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Posted By: barrysloate

Wes- you live in California. You have to stay up three hours less than east coasters do!

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Posted By: Jay

Barry--Maybe you should just send out a flier advertising what lots you are selling and then run the auction on Ebay.

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Posted By: Steve Murray

"because you may want to jump back to a lot and will find yourself locked out"

Exactly! I'm interested in two lots. One closes thirty minutes after the other. I can only afford one lot. I pass on the earlier one to go for the later one only to find that the bidding has gotten out of my range. I'd love to go back to the first lot but find that it closed at less than what I was willing to pay. No winners here

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Posted By: Corey R. Shanus

Not sure I agree with you on that one. When Alan Rosen was in his heyday in the 80's, his auctions DID end precisely at a certain hour. And, having participated in them and remembering vividly how difficult it was to get through toward the end, I have no doubt that he left A LOT of money on the table by arbitrarily decreeing when the auction would end.

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Posted By: Jay

Steve--Two winners there; neither was you. When auctions go to 3:00 AM I go to sleep and end up bidding less than I would have if the lot had ended early. It's all a wash.

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Posted By: Jay

Corey--I disagree back . In those days you had to call in. Now computers eliminate that bottleneck (see EBay).

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Posted By: Alan

How did Teletrade do it in the early 1990's ? Didn't they end all the lots at 10 pm ?

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Posted By: scott brockelman

without a doubt is the best system, dragging it on all night is an antiquated method which does not bring in higher totals to consignors. In some cases I would venture less, because there is no flurry of bids at the end. I for one will no longer stay up all night. In 2 recent auctions the seller lost money from me as my max was topped in the wee hours of the morning and I was outbid. I never knew it and never bid again, I was willing to pay more, just didn't think I would have to. Had this been a individual lot closing auction the action would have developed much sooner and quicker, creating a competitive environment and I would have bid much higher to secure the lot.

So for me anyway, the allnight auctions will not be getting my support in the wee hours of the morning.

As Jay stated, once people understand the individual closing and it's merits you will see more spirited bidding earlier and higher prices realized to both house and consignor.

Scott

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Posted By: Joe D.

I really do NOT like eBay's format of a fixed end time.

No matter what I snipe or how I bid....
I like having the ability to go an additional bid (or bids) if I have been outbid in the final minute.

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Posted By: Fred C

I kind of like it when a lot closes because it doesn't receive bids after a certain amount of time. This makes things really simple. If you only have a certain amount to commit to an auction then you know that the closed lots are finished and you could commit more money to something else. It takes a lot of "drama" out of having to wake up in the AM only to find out you've been shut out of everything.

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Posted By: Corey R. Shanus

Fair point, but that is not the main reason I feel he left a lot of money on the table. Even if there is no problem getting through, if I'm running an auction I would never want to prevent someone from having a chance to react when he learns he was outbid. Max bids are great in theory; however, they ignore the human reality of how many people respond that they are outbid. Maybe you have the discipline to stick to your limit, often times I don't. I know when many people ask how high I'm willing to go, my most truthful reponse is "I really don't know." Until I'm faced with losing something, I don't have enough info to really know how much I want something. Sometimes I have exceeded my anticipated maximum by literally 50% to win the lot, and with no later regrets. Other times I stuck to my maximum and the next day I was upset I didn't go higher. Point is a system that ends precisely at a certain time doesn't allow these extra emotions to come into play, and for that reason mainly I feel significant money is being left on the table.

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Posted By: Jay

Joe--Snipe your max and it becomes a nonissue. If you are topped and you want to bid one more time then you didn't snipe your max.

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Posted By: barrysloate

It seems like nearly everybody has a different opinion, so this is probably an issue that will never be resolved to everyone's satisfaction.

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Posted By: Matt

Corey - valid point.

One thing I haven't understood is why the added time periods are so long. Who needs another 30 minutes to make a decision about a lot they have been watching for 3 weeks? Anything more then 5 minutes seems totally unreasonable to me. Think how much faster these auctions would end if the time extended by 5 minutes every time instead of 15 or 30.

Imagine you were in a live auction and you were given another 15 minutes every time your opponent bid to consider if you would up your bid. Absurd.

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Posted By: Doug

Another idea for this quandary would be to add 15 minutes or so after the auction closed to give everyone that bid one last chance to put in an absolute maximum bid and whoever had the highest bid at the end of the 15 minutes wins. That way everyone that bid would have one last crack at it without having the auction run all night.

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Posted By: Joe D.

"Joe--Snipe your max and it becomes a nonissue. If you are topped and you want to bid one more time then you didn't snipe your max."


I wish it was that easy.

I tend to be more emotional about the process (emotional rather than logical).

There are times that I would 'snipe my max' - but heck after I lose.... I still say 'I wish I could put in another bid'.

I am not a fortune teller... and I really don't know how high my max is until I am truly faced with a 'bid again' or 'lose it' decision.

For instance... I probably would have gone a full 50% higher - or maybe more - for this card - if it was sold by an auction house....
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=300185611309&ssPageName=STRK:MEDW:IT&ih=020

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Posted By: Mark Steinberg

I think Matt is really on to something....

I absolutely hate the concept of lots closing individually, as bidders cannot go back to their 2nd, 3rd or 4th choices (after the 1st choice has been outbid beyond reach).

Many many times, I have wanted to bid on a piece that has already closed. When you have a "fixed" amount to spend, you can't possibly know in advance which lots will go out of reach in the end.

But if they would shorten the extended bidding period to 5 or 10 minutes (instead of 30) it would have to result in a shorter auction. They could also make the initial closing happen earlier- say at 6:00 pm, instead of 9 or 10 o'clock.

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Posted By: doug goodman

Earlier closing times and smaller time increments. That's the solution.

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Posted By: T206Collector

Asking someone what their max is before they know if that will get them the card is not a particularly reliable way of determining what someone would be willing to pay for that card. Sometimes the ones the get away hurt so much they cause you to adjust your max.

_ _ _ _ _ _ _ _

Visit http://www.t206collector.com for my blog, interviews, articles, card galleries and more!

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Posted By: JimB

"I am outbid on lots in Mastro, and due to the system in place, I am precluded from going after a second choice lots. "

This has happened to me on numerous occassions. The worst is when they do the "buy the whole set or individual cards, you decide" thing. Those drag on for a long time; meanwhile all the other lots are closed.

I like Barry's idea. I would even suggest shortening the times more quickly. 30 minutes from 8-9pm, 15 minutes from 9-10:30, 10 minutes from 10:30- midnight. 5 minutes after midnight.
JimB

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Posted By: Scot

I don't mean to turn the page here but, I've always wanted a bidder list on all lots I win from auction houses. Ebay will provide on request.

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Posted By: barrysloate

Scot- what do you mean by a bidder list on all lots you win? Are you asking for the names of the underbidders?

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Posted By: Scot

Yes, a list of the underbidders. An open format like ebay would be nice.

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Posted By: barrysloate

Some bidders prefer and demand anonymity. Ebay was the only venue where other bidders' identities were revealed, although they've done away with that to a degree (I suppose you can still identify who is bidding by their feedback).

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Posted By: Anonymous

Corey:
"I would never want to prevent someone from having a chance to react when he learns he was outbid." But by going all night, long past bedtime for Jay, Scott and me actually does just that.

Mastro's format is superior. Now that everyone knows how it works, most lots get bid up to close to their final prices before the deadline and the few lots that go on past the deadline are those with multiple, spirited bidders. Barry's idea is a variation on the theme and may work quite nicely.

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Posted By: Corey R. Shanus

Two points:

First, under a 10-minute (or variation thereof) rule, each bidder has control over whether to find out he is topped before it is too late to put in another bid. The fact that you choose to go to sleep before the auction ends is a choice you make. I think it's fairer to ask you to take a nap than it is to ask me to lose out on the chance to shift my focus to other lots as could be the case under Mastro's system.

Second, while admitedly any system is not close to perfect, the more I reflect on it, the more I feel that a system that gradually reduces the ten-minute rule to something less and less, while perhaps starting the countdown at a more reasonable hour (e.g., afternoon/early evening) is the best of both worlds, sort of like letting bidders have their cake and eat it too. The auction will undoubtedly end at a much more reasonable hour and all bidders will have the satisfaction of not only being able to know their max will not be good enough, but also be able to shift focus to another lot at their option. While I think Steve Verkman makes some fair points that matters such as bathroom breaks, callbacks and technical glitches can cause injustices in that system, I do think that on balance it is the best idea I've heard and I look forward to it being tested by an auction house.

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Posted By: Mark Steinberg

Well said, Corey...

That "Nap" comment still has me laughing.

Wish that one of the auction houses would try that very format...

1. An earlier initial ending time
2. A gradually descending 10 minute rule (reducing down to 1 or 2 minutes)

This way, the auction would end earlier and bidders could still switch to other lots, if need be.

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Posted By: Jay

Corey-The method chosen has nothing to do with fairness, only with maximization of auction realization. If the auctioneer thinks that Scott or Richard going to sleep will reduce realizations more than your lot prioritization will benefit realizations then he will opt for a good night sleep for all, end of statement. Besides, in how many Mastro auctions have you lost the opportunity to bid a lot that you would have bid on if you knew you would lose some other lot? I'd make a market of zero bid at one.

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Posted By: Corey R. Shanus

I agree that the priority of the auction house is to maximize the auction's gross. Fairness though is not entirely irrelevant because bidders' perceptions of a system's fairness do impact behavior. For example, with the Clean Sweep rule now penalizing bidders who place bids after 1:30am, that idea offends me so much that if I find I am topped after that hour it probably would, for non-financial reasons, impact my decision whether to place another bid. Bottom line -- I politely disagree that Mastro's system maximizes auction gross.

As to your question whether I have ever lost a lot in a Mastro auction due to the rule, the answer is I don't know. I don't remember when they instituted it and the closing sequence of lots in those auctions. But I can tell you this. Had such a system been the norm hobby-wide over the past number of years, there would be more than a few things in my collection that I value very much that I would not now own.

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Posted By: Brian

It seems to me, and I didn't read through all the responses so if this has already been stated I apologize, but to close lots individually is the best for all parties involved.

To me, if you changed the 30 minute period that starts at 9pm, to a 5 minute clock on ACTIVE auctions, things would move much quicker. All auctions close after 15 minutes of no activity, so in theory, a large number of lots would close at 9:15.

Those that did not would move back and forth between bidders much like a live auction house. After the 5 minute clock is exceeded, the auction moves to the 15 minute close out, allowing additional bidders to jump in, or for "change of mind" bidders to get back onto the 5 minute back and forth bidding clock. If no one jumps in, the auction closes and everyone gets to bed at a decent hour.

If the back and forth continues for a while, then the Consignor and Auctioneer are happy, and the potential buyers have to hack it out, in the head to head, in the manner that keeps auctions the glorious battles that they are.

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Posted By: barrysloate

There is no shortage of different opinions on this issue, but one aspect of auctions that end at 4:00 AM that needs to be addressed is the amount of dead time involved. I would say from midnight to 4:00 AM, most of the time is spent waiting for just the right moment to place a bid. There is little sense of urgency, especially if there is say a 30 minute clock (you can stall for 29 minutes if you choose).

All of that wasted time could be condensed into one or two hours of intense bidding, achieving the same results.

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Posted By: scott brockelman

I will give you 2 examples of why I favor each lot ending at 30 mintute rule.

In the last Mastro auction I bid on several lots, at 11:00 when the clock began to count down I saw action on several, however a few that I was high bidder on ended in 30 minutes with no one contesting my high bid. However 2 others that I was interested in were being contested, I bid, was out bid, and rebid again, and was able to win 1 of them. By the others being wrapped up, I knew that I was not going to go higher on them and thus could "budget" more to chase the other lots, on the one I was successful on I ended up paying more than I originally figured but was quite happy with the outcome and I am sure the lot brought 2 increments more than had it ended 3-4 hours later with myself not involved as it was a fairly thinly traded area.

Next example is the opposite. It was the traditional 30 minute on all lots, all nite auction, which I believe ended about 3:30 am. I won a few lots, but lost out on one that I wanted(obviously did not want it that bad you will say). Initially I bid on the lot about 8:00 pm of the last auction nite and also placed a maximum bid 4 increments above my initial bid, meaning someone would have to place 5 bids to beat me. At 12:30 the lot had not moved at all and I still had my max in place, as a side note the auction house indicated prior to the auction that they would probably end it shortly after midnite if the bid volume was insufficient to warrant remaining live, however there was no obligation on their part to do so. So, I called it a nite, assuming with no action in nearly 5 hours and a huge max in place I was safe.

You know the rest, upon arrising I received an email that I had been outbid at 2:59 in the morning. Obviously someone got outbid on another lot they were chasing and having placed a prior bid on the one I was high on, came back and pushed it over my max and I being asleep had no chance to get back in. Bottom line, I lost out on the card and they lost out on another bid. Would one not assume after several hours of uncontested bidding and a comfortable max that I would/should have anything to worry about?

Scott

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Posted By: barrysloate

Scott- all good examples but you are just citing an isolated incident, one you experienced. In a large auction there are many hundreds of bidders, and there needs to be a way to get them to finish bidding before 3:30 AM. Nobody really wants to stay up that late so a better system could be implemented that might conclude at midnight or 1:00 AM, with virtually the same results. I think it could be done, but we all disagree on how best to do it.

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Posted By: scott brockelman

Yes these were isolated to me, but possibly happened to many others.

But my point was the fact that in one instance the shortened closing netted the seller and house more money and in the all niter it cost them money. That makes it fairly easy for me to see which one I would prefer as a consignor. We all know the frenzied last minutes on Ebay create higher prices than might normally occur. I would think one would also want this hurried atmosphere in a major auction, not the marathon last one to finish steals the lot.

Again many ideas on this, each persons from their vested interest standpoint.

Scott

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Posted By: barrysloate

I agree the hurried atmosphere is preferable to the marathon. People fall asleep on the couch, wake up groggy in the middle of the night to continue bidding...not the dynamic atmosphere you are looking for. I'm with you 100%.

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Posted By: Matt

Scot - did you really need 30 minutes to decide if you were going to up your bid?

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Posted By: Corey R. Shanus

I hear you. But what about a rule that gradually changes from a 30-minute (or 10-minute or whatever) rule to something incrementally less every, say, 15 minutes? At some point the time period to either place a bid or have the auction close would be so short that all remaining bidders would be forced to stay at their computers/phones and reasonably soon thereafter the auction would end. That would seem to be the best of both worlds. Certainly, IMHO, worth trying.

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Posted By: dan mckee

Wes, you are welcome to come stay with me during the next catalog auction. I will keep you up until 5am Eastern Standard Time and see how cranky you are the next day.

Ebay does it, just set a reasonable ending time and have internet bidding, the 2 bidders willing to pay $5K will have snipe bids and the machine will run them up against each other as ebay does.

Ebay works great, why make the East Coast collectors suffer?