Heritage Raises Coins BP to 20%

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The major auction houses are just links in the long rattling supply chain that necessarily exists in this modern day and age. Short of just one on one meetings and bartering, a full breakdown of the economics of the middlemen that exist in any market process are incredibly revealing. Some of these people provide a genuinely crucial service in the process, some exist merely because of our mutual distrust of everyone but ourselves and our Mommies (for the lucky ones). Yet, it does provide jobs and helps the economy. Besides, if we we were all self sufficient, we wouldn't need money, nor the idea of collecting it, eh?

 

Of course an online only auction has a much higher return rate from dissatisfied bidders. As anyone that has attended a live auction and viewed the lots knows the catalogs and online images don't give the whole picture, you really need to see the lots in person or have them viewed by someones opinions you trust. This isn't possible in an online only auction, so the returns are much higher.

 

They set their own return polices, their return rates aren't any higher than they allow them to be

 

The free market is not in play here when all or most of the major players are at the same price .It's more like price fixing

 

Frankly, I wish people would do some research on what legally constitutes price fixing. If Spacely Sprockets raises prices and Cogswell Cogs does it a month later, it is not price fixing unless the two companies actually agreed in secret to do so. Sans any evidence of that, price fixing allegations are hot air.

 

With 20% or more they could get back in it

 

This is what I was told for Seller's Fees for Heritage Auctions.

"Any coins that were in our ANA Sale would be 10% and the other coins that were in our internet sale would be 15%."

 

I think the impending demise of traditional auction houses is greatly exaggerated. Among the most affluent clients --which is where something like 80% of the revenue is generated for a traditional auction house-- none of these wealthy people are going to be attracted to online-only auctions without a printed catalog. After the collection is dispersed, they want a catalog on their coffee table with the coins displayed in it. These people are about as likely to go online-only as they are to eat brisket with plastic silverware and paper napkins.

 

I have to disagree here. They don't care about a catalog, and really any of them could have one made if they really really wanted to or just save pictures they have taken. They aren't going to pick a venue and leave money on the table simply for a book.

What they really care about is maximizing their return and who will generate the most money for them. Only Legend has shown the ability to play at the level of the traditional auction houses.

You are right about one thing though, as long as the big boys can keep bringing top dollar they won't have any difficult making piles of money. The auction fees are irrelevant to the top collections as they negotiate their own fee rate anyway. It's really only the small collector with no bargaining power that loses out on them as a potential venue

 

Perhaps the catalog alone isn't enough to persuade them to stick with conventional auctioning. But again, I think a lot of the attraction of using a large auction house is the prestige associated with doing so. Keep in mind we are talking about a hobby, not necessarily an investment scheme meant to maximize returns as the sole aim and purpose of the endeavour, though that is precisely what happens for many who consign to the largest auction houses: Even for the smaller players they end-up with more on truly scarce items than they would selling any other way. The real key is collecting the right material. It doesn't have to be a 6-digit coin to make a nice return at a conventional auction. But collecting ABT silver 5 ounces pieces is never likely going to be the road to riches for anyone, even if graded MS71 or PF71. It has to be rare and desirable, and there has to be at least two people out there who want it badly enough to ignore the prevailing wisdom regarding valuations.

 

There is some of that, there is just a lot of it too that only the elite houses have been able to get the elite prices. They have the ability to reach a lot of big money buyers and when talking about the upper end of collectors where the houses really make their money the consignors are negotiating the majority of the fee percentage away anyway.

You certainly don't have to have six figure coins to do well, the problem for the majority of us is that we just wouldn't have any bargaining power. Two of the three elite houses are basically unusable for most collectors as a seller due to the fees they would take without that bargaining power. If you have the bargaining power or can meet Legends requirements the elite houses are clearly the way to go, if not other options need to be made for selling. Regardless though I completely agree that the big boys are in no danger of going out of business at this time

 

I don't see any "demise" in the future for auction houses, just the erasure of profit margin for the smaller players who use them.

 

Well looks like I'm,



Along with a few trusted dealers. BP be hanged.