Heritage Raises Coins BP to 20%

The "free market" only works when companies don't price-fix. It sure is a coincidence that all of these auction houses decide to supposedly independently raise their buyer's premiums at essentially the same time. In my opinion, a case could be made with the FTC for price-fixing...but I have neither the time, skills, finances, nor energy to file such a case.

 

Log in or Sign up to hide this ad.

While unpleasant, I don't see this as a big deal. Prices are bound to go up eventually, it's just a matter of how long. If it were a larger increase, maybe I could see more reason for outcry, but I don't think a 2.5% increase is reason enough. I personally don't use Heritage too often, but I do when I find something there that I really like or find something there that comes out to be cheaper after fees and taxes than if I purchased something like it elsewhere. I take all the fees + shipping + tax into account when I place a bid.

 

Easy solution Brando...don't do business with them.

 

Yes, thats the plan. Thanks for your highly edifying reply.

 

To prove price-fixing, collusion would have to be proved. Following a price leader is common in a lot of industries, airlines, movie theaters, etc. Sometimes price leaders have to reverse course if the industry doesn't follow suit; otherwise, they'd lose too much business. In this case, it appears that Stacks Bowers has succeeded in leading the flock to greener pastures.

In the long run though, I predict that more expensive coins will go to internet-only auctions. As older non-internet-savvy collectors leave the market, their replacements will feel quite comfortable with internet-only auctions. They won't feel the need for paper catalogs and live auctions. Elimination of these big expenses should result in more companies having BPs of 10%, which are the rates for the internet-only auctions of Legend and Great Collections.

Cal

 

Or the 0% of David Lawrence. I completely agree that the need is fading for all the bells and whistles where consignors end up paying a lot more in added fees than what ends up being provided with some catalogs and floor bidding.

 

Some good points, I can't recall the last time I looked at or had a catalog...in addition, companies like Littleton in NH may go the way of the buggy whip (this too has an unfortunate downside since they employ 300+). That being said, I have bought a few coins from Heritage and for the most part they command a premium price for their graded coins...especially those that are beaned.

 

I don't see that happening, Legend has set themselves up as a boutique auction house, and they aren't interested in volume or taking business away from the other sellers so much as gaining consignments of the very best material out there. All Legend cares about is rarity and desirability. If the coins you have are not sensational, --absolutely stunning examples without peers-- then they really aren't interested in the business anyway. Heritage and the others operate much more as a volume auctioneer, where they will take all the less desirable material simply to have a crack at the better pieces in a collection. Legend won't do that, they aren't going to sell the junk no matter what kind of terms your willing to accept.

 

I would expect that very few consignors would get less than 100% of hammer once the BP goes to 20%. What will happen short-term, is that big consignors who aren't aware the buyer's premium has been increased, will accept what they have been getting (and what hey thought was a good deal), --say 104 of hammer-- not knowing that 104 under the new system is only 101.5 under the old buyer's premium.

 

In other words, they've figured out the true market demographic for what they want to sell, and they're accurately targeting it.

In the meantime, buyers like you with a taste for quality but a non-mainstream interest and a non-unlimited budget are getting screwed because the larger auction players are becoming ducks nibbling you to death. This would be a good time for someone with venture capital and a desire to troll the status quo to throw some of it at Ian over at Great Collections.

 

In other words... 'we saw the other guys doing it and figured we could too!'. I'm just surprised they didn't preface it with 'in order to serve you better' . 'Being competitive' means meeting a service or value or production point, not meeting a jacking up of company profits.

 

One risk the big auction houses are taking is that if the business starts to look hugely profitable to really big-money outside companies, they may find themselves out-competed. For example, if Amazon decided to open a coin auction division and use their enormous financial and marketing strength to be competitive, existing auction houses could find themselves marginalized. To dominate, Amazon could take losses for years with no seller's premium, 5% buyer's premium, and free delivery. However, they might actually make money at those rates or slightly higher once they do dominate.

Cal

 

Yes, Amazon has been in and out of the coin business. Recently they sold a lot of the Saddle Ridge hoard. But the big auction houses were taking 15% of the action just a few years ago; now it will be 20% of a presumably bigger market ... a 33% increase in the take. With the majority of mid to high priced coins being certified, they are a commodity that can be traded without a lot of numismatic expertise by the middleman. Add-in the increasing use of the internet for coin buying and selling plus the ease of posting high resolution photos, and the stage is set for big money to take a closer look. I won't say they will, but won't be surprised if they give it a try.

Cal

 

Did you put in a personal request for an increased BP to 20%?

 

Probably not original with Colson http://www.phrases.org.uk/bulletin_board/54/messages/368.html

 

You know as well as I do that this isn't about giving the photographers and IT folks raises. This is about making the fat cats at the top even richer than they already are. That's fine, they can do what they'd like to get even richer -- I will just buy fewer things from them and will consign my coins to a different venue.

Because the BP is a fixed percentage of sale prices, and because the "big ticket" item coins have continued to go up in sale prices, they make more on those items while doing nothing more than they have in the past. Actually, they do less -- communications are largely electronic, not in print. This change in BP isn't coming along with them doing something more for the customers or consignors. It's more similar to a raise in taxes. I'm all for a higher BP if Heritage was doing something more for their customers. Quite contrary though, technology has made their jobs easier, yet over the past 10-15 years, they have continued to raise the "user tax" of their services. Sounds like the definition of greed to me, not savvy business.

As an example: it makes ZERO sense for an online only auction to incur a 20% BP (with no catalogs, and no live in person auction). I would be completely fine if they raised the BP to 20% for their "signature" auctions where a live auction takes place and catalogs were created (though I think having live auctions and paper catalogs is so 20 years ago). Then, at the same time why not lower the BP for online auctions only to 10%?

This move hurts the smaller collectors when they want to disperse their collections (i.e., those not consigning 6+ figures of coins).

But, you already knew that.