Which Auction site would you rank #1 for Ancients?

I agree that the user interface to an auction can be improved in most cases. Most user interfaces are abominably badly implemented, usually by programmers and designers who have no concept of the features that will make the user experience better and easier.

I'm puzzled as to how customs fees and shipping fees can be estimated if you (1) don't know the country of the bidder (or if he's bidding from one country but shipping to a different one), and (2) don't know how the bidder plans to ship the coins. Maybe I'm just ignorant here since my dealer handles all these issues for me, but I'd like to be enlightened as to how you would have the auction house estimate these two items for you. Or maybe they just display the customs and shipping fees for the top ten countries from which there are bidders present?

But these are user interface issues, and are different from whether or not the fundamental structure of coin auctions can be improved.

The only fundamental structure issue I glean from your posts is: Who pays the auction house's fees -- the buyer or seller?

In most but not all coin auctions with which I'm familiar, the buyer pays most of the fees. In some instances I realize that the seller pays a fee also, but for many high-end collections (e.g., NAC's auction of Mike Gasvoda's 12 Caesars collection), I suspect that the auction house actually returns part of the buyer's fee to the seller. The prestige and value of auctioning a $5M - $10M collection make it worthwhile to pay the seller some of the fees collected.

Is this the structural issue you think should be changed? If so, how? One way or another, if an auction house needs 20% of the hammer price to make a profit and stay in business, they'll collect it from the buyer, seller, or both, and the buyer will end up paying this premium since the seller will factor any seller's fee into his minimum/reserve price for the coin.

 

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All good points. In terms of interface - if bidder’s shipping country is known, then applicable customs fee is known.

As for shipping method - usually places like CNG don’t give me a choice. It’s insured/registered international courier and I don’t find out the price until I get my invoice. The prices aren’t listed on the site. It should be very clear how much shipping is - as it is on eBay. This one should be a quick-win fix.

In terms of structure - simplicity is the best experience. If the auction house’s cut is 20%, then so it is, but the buyer doesn’t need to know that. The hammer price should be the buyer’s price: with the shipping price - transparent and clear - added, same as everywhere else.

Is this a viable business? Well, it needs research. My assumption is people will bid more money if there is no buyer fee, and all the costs are clear. People will participate more if there are fewer barriers to participation - ie, once CNG or Roma have accepted you and your references, this should be good enough for everyone.

 

For my major auction bidding and purchases, I have excel spreadsheets that I have built. I review the Terms and Conditions, and impute ALL of the costs and overheads associated for a Fully Loaded Landed Cost for me should I win it. As the auction progresses, I can quickly update this Fully Loaded Cost so I know EXACTLY to the cent (I round to a dollar or $5, dependent on significance.) Purdy simple stuff that Greg is suggesting as an Universal Auction interface. If the Buyer is registered, as he suggests, then the interface would have all the personal attributes of the Buyer to calculate the Hammer Price (Country shipped to, shipping costs, Seller profit, duties inbound to that country, etc. etc .) Honestly, purdy easy stuff for an astute programmer to develop. Hey, wait: I want my Royalties and Commissions for this suggestion... I will share with Greg... This is the re-thinking approach that I have been involved with years. Too many times I have heard "It can't be done" or "It is too complicated", etc. Break-throughs are created by rethinking from the END-USER's / CONSUMER's perspective...

Random Coin to keep this legal:

Carthage Zeugitania after 241 DIshekel AE 27 10.8g Libyan Revolt Tanit - Horse r palm MAA 45 SNG Cop 253 scarce

 

Conceptually, this is a pretty interesting idea. A 20% buyer's fee calculates to a 16 2/3% seller's fee on the hammer price. I wonder if any auction house (not just coins) has ever tried this?

If I'm a seller in this type of auction, I would need to set my reserve/minimum prices accordingly. E.g., if I have a coin that I believe is worth $100, then the reserve price is $120 since the auction house will take $20 of that final price. Would the opening/minimum prices reflect this by being increased? Lots of thoughts to ponder about this type of auction.

It also occurs to me that if a bidder is bidding online, it would be pretty simple to create a gadget that calculates all the fees in the bidder's particular browser to show the fully loaded costs whenever the bidder enters a new bid. I wonder why no one has ever done this?

 

This could indeed be done. I know there are programmers who make "mods" for sophisticated video games (for fun) so I'm sure something like this would be easy for them.

 

I think that if for example Kunker charged a 10% buyer's fee and a 10% seller's fee/ that would be way more reasonable to both parties. Think of it this way, Kunker Auctions realize on average 6 million euros or more. So add up the buyer's/seller's fee=20%. Twenty percent of 6 million euros=1.2million(a pretty tidy profit) for Kunker> St. James/Baldwins charge NO seller's fee/ but a 20% buyer's fee.

 

This can all be done in a simple Excel spreadsheet. If you want to collaborate on making a killer tool to distribute for free, I'd be willing to jump in.

 

Depends on what you mean. IE is Id Est "that is". EG is Exempli Gratia roughly "For example". Many of my students have a hard time with this distinction.

 

Correct. I was giving 2 examples, since I have many collecting foci.

 

I always use "in effect" for i.e. and "egxample" for e.g. to remind myself which means which. A mental shortcut for a cluttered mind.

Tonight you re-taught me the details I had long forgotten.

 

I agree fully with this idea. It would seem reasonable to have a routine where you input a few details like where you live and how you will pay so at least a close estimate of the final cost could be figured. Buying more than one lot will reduce postage costs but might trigger a different tax status for some so writing this routine might prove more complex than you wished. There is one other factor to consider we have not covered. Some sales charge a different buyers' fee according to some factor of the bid. The new Triton XXI sale catalog clearly lists a 20% fee for bids placed electronically and in person at the sale but 22.5% for bids placed by snail-mail on the enclosed paper form. Let's see, Lot 1127 might sell for the estimate of $2 million but mailing in the form to avoid placing the bid online would cost an extra $50,000 plus a stamp for the envelope. I somehow doubt that this coin will sell to a mail bidder. If I were bidding on it, I would send an agent to the sale and cover his fee and expenses (at least partly) with the 2.5% savings. That would be really hard to write into our Excel.

This is just another example of how we have progressed since the time some college friends of mine were teaching the school's computer to play checkers back in the 1960's. We laughed at them but history geeks and computer geeks could still be friends back then.

 

There was a time, back in the 1980s and earlier, that auction houses did not charge buyers fees. Back then a seller would consign material to a house who would lot it, write up descriptions, photo some of it, print up a catalog, mail it to their usual client list, run the sale (in their showroom), invoice the winning bidders, and ship the material after payment. To cover this cost the house charged the SELLER a fixed percentage for every lot sold, usually about 20%. Unsold material was returned to the seller, minus lotting charges, and the house was free and clear. But then sellers began to rebel and withhold material. So the houses began to split up the fee; half from the seller and half from the buyer. That is how buyer's fees got started, and in the world of collectibles, you can rest assured they will not go away. However, over time, many houses took the expedient of buying out the seller and running the material with full freight buyer's fees. They are stuck for the cost of unsolds, but do better on the sales. Online costs are lower than printing catalogs, though good lotting isn't cheap, and established houses can do pretty well.

The bottom line is that grousing about buyer's fees isn't going to change anything, and nothing proposed here is in the interests of those who run the sales. My advice is simple: decide what you are willing to pay for a coin, calculate your max bid from something like Doug suggested, and give it a shot. If you pay less than "normal" retail, that's a good day.

 

I have heard this claim several times before. However, when I look into old auction catalogues like Ars Classica sale of Pozzi collection from 1921 (and all the following Naville/Ars Classica sales) it says that the buyers shall pay 10% on the hammer price of the lots. Nevertheless the shift of the burden towards the buyer in later years seems clear.

 

This mirrors my thinking on this topic as well. While the user interface clearly can be improved, the fundamental auction model isn't going to change.

 

Auctions are fundamentally different than retail, in that auction houses serve both client and customer. The client is the consigner, the customer is the bidder. By law, auctioneers have a fiduciary duty to maximize the return for the seller (the client), not to convenience the bidder (the customer). Any auctioneer that is found to be negligent of this responsibility will face legal consequences, which can be as severe as the loss of their auctioneer's license, fines, and even prison.

Their legal obligation to the buyer involves posting and upholding the terms of the sale, as well as to transfer the property once payment is collected. They have an ethical duty to treat the customer courteously and fairly. But there is no fiduciary responsibility to the bidder. People who complain about hidden fees with auctions simply haven't done their due diligence. There are no hidden fees. The terms of sale and all associated fees are clearly stated. It is up to the bidders to familiarize themselves with the terms, then bid accordingly, or refrain from bidding.

To gripe about auction fees or the auction "business model" is to misunderstand auctions. With auctions, prices are bid up from a low point, whereas with retail prices start high and are negotiated down. In an auction, a customer must be vetted and approved. It is a privilege to bid. The customer willing to pay the most has the privilege of winning. Participating in and winning an auction is an elitist privilege. It is a function of class and status. Cheerfully paying the buyer's fee, shipping, ad nauseum above hammer price is a way to demonstrate elite status. Of course, there are countless low-end junk auctions where any manner of flotsam and jetsam can be purchased for a dollar. But I'm mainly referring to the international art and collectibles market.

Auctions are generally not a good fit for people who are on a tight budget, and it does not fit with the contemporary retail business model within which "the customer is always right." But auctions are not retail; they are an alternative to retail and in many ways opposed to it. One of their main functions is to establish the market price of chattel through offers obtained from bidding. With retail the market price has already been determined.

The auction format is designed to encourage robust bidding by creating a feeling of excitement, immediacy, and exclusivity. It is therefore not in the best interest of most traditional auction houses to remind people of the buyer's fee during bidding, as this may suppress hammer prices. Buyer's fees are never going away, and I doubt most major auction houses will do much to make it more convenient for bidders to calculate it into the total cost of items during bidding. If bidders don't want to calculate buyer's fees — if bidding in auctions is too inconvenient — then they are better off buying coins at retail. Understand that an auction is more akin to a gambling table than to a retail store: it is a game with well-established rules, and is heavily regulated by the government. Most important, the odds are with the house.

Heritage seems to be an exception. They have done a good job of developing online bidding software that calculates buyer's fees for you, and does so during online bidding. But they are positioning themselves as more of a "populist" auctioneer. This is why they unnecessarily slab most of the ancient coins they sell. They position themselves as friendly to novices and first-time auction participants.

A personal anecdote to illustrate auction houses' attitude toward bidders:

A major European auctioneer — who has been identified as a favorite of several posters here — once allowed a third-party company accidentally to charge my credit card without my permission (through the third party's access to the auctioneer's own website). When I contacted the auction house and asked them to credit the charge, the director sent a reply to me saying it was my responsibility to contact the third party to obtain the credit.

I replied telling him to do it, since it was done through his website. He then sent me a lengthy email dressing me down for being "crass" and "rude." No head of a customer-oriented establishment would ever handle a simple error on their part by denying responsibility and then berating the customer for objecting. Of course he had them credit my account (which he should have done in the first place).

And I'm still a customer of this auction house, despite. After all, they've allowed me the continued privilege of doing business with them, despite my crassness and rudeness having been a personal affront to the director. If I want the privilege of owning a particular item that they are handling, then I have no choice but to deal with them, or else forego that privilege.

 

Part of the confusion with this thread I think perhaps might be due to an exposure only to Ebay and no other auction venue as ones first experience. I'll address a few points raised.

Fees and commissions. Some think they are too high, some appropriate. But once upon a time the consignor bore the cost of the fees entirely. Some might think it unfair if a consignor only got $70 on the $100 hammer price. At some point in time those commissions began to be spread to the buyer. At the moment (for most auction houses) fees are split between the buyer and the seller. Seems a bit more equitable to me, and it encourages people to both buy and sell, not just do one or the other.

As for a one-time signup between auction houses, well, as I mentioned Sixbid already does this, but not everyone is signed up there and the system is not perfect. There are many dealers and for various reasons many may not wish to be part of a 'consortium'.

A standardized interface for customs is simply impossible. Its not just a matter of looking up a table of taxes on a website. There is always the human factor. As a dealer of 30 years I can tell you I have been taxed only randomly, sometimes accurately, sometimes incorrectly. Thats part of the human error factor. I once came back form Europe with about 1,000 coins, properly declared. I was stopped in customs as they though I might be carrying undeclared 'cash'. Took some time, but ultimately they let me pass with no taxes or fees.

The better and more prestigious your collection (and more expensive), the less you pay as a seller. Not that the buyer pays more, but often a consignor sells without fees and sometimes will actually get a cut of the buyers fees as well.

 

They will likely bid more in the beginning, but when one wants to sell....one might not want to if they bear the burden of all the fees.

Well, this is another aspect. Auctions rarely start at retail and go up. They typically start at 60% of retail. Lots with reserves dont sell that often.

I see as I have already posted some things have been already pointed out. Sorry for the duplication.

Bottom line is that it is incredibly simple to calculate what one is willing to pay. Just dont go over that amount. The auction model we now have (overall) works out best for both buyers and sellers. I am satisfied with it.

 

Correctly stated.

For any auction in which I'm bidding, I've already calculated the additional buyer's fees, approximated the exchange rate, and added my dealer's fee. It's easy to do this with a calculator or spreadsheet, and online references to current exchange rates. I know my maximum bid based on this information, and set my budget for each coin accordingly.

 

I agree with Ken. eBay sales follow an auction-bidding model, and in this sense they can be called auctions. But eBay sales are not regulated in the same way and by the same government entities that regulate the auctioneering profession. Most states and some cities in the U.S regulate the auctioneering profession (countries in Europe have similar regulations). In most of these (at least in the U.S.), one who "holds him/herself out to be an auctioneer" or as an "auction house" to the public and who is not licensed by a government entity is committing consumer fraud through misrepresentation and will be prosecuted.

eBay sellers cannot hold themselves out to be auctioneers unless they actually are. Most do not hold an auctioneers' license and cannot legally refer to themselves as such. Similarly, in the U.S, it is illegal to use the nominal "esquire" or ".esq" unless one is licensed to practice law.

This is why eBay sellers are called "sellers" and not "auctioneers." They are not subject to the same fiduciary responsibilities and government regulations as are licensed auctioneers. Therefore, in a legal sense, eBay "auctions" are not true auctions; as stated above, they are a method of sales which follows an auction-bidding model. The exception, of course, is when the eBay auction is run by a licensed auctioneer.

With eBay, the customer is first and has many protections. In most cases the seller owns the material, rarely is it a consignment. "Buy it now" and "Make an offer" sales are common. The seller receives the lion's share of the full sales price, part of which goes to cover fees. For these reasons eBay it is more akin to retail. But with traditional auction houses run by licensed auctioneers, the client is first and has many protections. For bidders they are more akin to casinos and almost nothing like retail. A bid is a bet and buyer beware. Most items are consigned. The client receives all or most of the hammer price, and the auctioneer has to cover expenses and make a profit from buyer's fees, etc.

In short, eBay functions primarily by attracting sellers but protecting bidders. Auctioneers function primarily by attracting bidders but protecting sellers. Certainly everyone benefits if both eBay and traditional auction houses treat everyone with courtesy, respect, and fair dealing. But their ultimate loyalties are at opposite poles.

Governments have been looking to regulate eBay and other online-only auction sales for many years. Once that happens, only licensed auctioneers will be able to sell through eBay, if it survives at all. It will fundamentally change the nature of eBay. In most locales, it takes much training, expense, and time, and many hoops to jump through, before one becomes licensed. The reality is that it will probably kill eBay.

In the future, then, look for eBay — or what's left of it — to become more like a venue for traditional auction houses with a client-first, customer-second attitude. It's barking up the wrong tree to expect traditional auction houses to become more like eBay where the customer is first.

 

Good thread! I don't do a lot of auctions so some good education.