First, this post does not refer to any specific past events. However, if one has a large, valuable collection, what would be the advantage in having a "private" auction as opposed to a public auction? A private auction is an invitation-only auction where the invitees are selected dealers and collectors. The advantages for the auction company are reasonably clear in that it must cost a great deal less to hold a private auction compared to a public auction. And they might acquire some of the coins at low cost for their own inventory by bidding. What about the consignor though? Consignor naiveté or laziness may enter the decision in some cases. The only potential advantages for the consignor that I can see are no seller's costs (including transport and third party grading), receiving a portion of buyers' premiums, larger cash advance payment, or guaranteed minimum hammer. Disposing of coins with questionable or disputed ownership is an unsavory possibility. I don't think any auction company would knowingly handle this sort of merchandise, but they've been fooled in the past. What am I missing? Cal
I don't get it either... The auction company makes the most money by selling items at auction (and collecting buyers and sellers premiums), not by purchasing items for their own account for some future sales. Presumably all of the likely known bidders are invited as that maximizes the bids. Of course that misses the unknown bidder (new collector with $ to burn, etc.) At a public auction, the buyers can hire agents (or have the auction house do it) to bid on their behalf w/o disclosing their identity. The identity of the consigner can similarly be hidden "from the collection of a lady" is how the brits usually do it. Thus the only benefit I can see is that with a private auction the unwashed (public) don't see the data. So nobody knows that the last 1804 dollar sold for $5m not $8m. Which assumes that nobody talks.
A private auction only serves the prerogatives of resellers who do not wish to be publicly identified.
Most means of bidding (mail, phone, internet, etc.) in a public auction allow buyers, including resellers, to remain anonymous except to the auction house. A buyer who bids in person at a private auction can't depend on other bidders who are present to keep quiet about it. Cal
All I see are disadvantages to private auctions. For one you leave the majority of potential buyers out, including all those who already have buyers waiting in the wings for specific items. And those people are the ones who bid items up. Two, advertising, potential buyers pay attention to advertising of major auction houses. Private auctions are not advertised. Auction catalogs - all major auction houses produce them, private auctions do not. The trust issue, people trust major auction houses, few if any trust private sellers. All of these things and more, this is what you pay for when you use a major auction house. They exist specifically because they have the ability to maximize realized prices. It is the business they are in and they know how to do it better than anybody else. It is what they do.
About the only thing I could see for most things would be for a very very well connected individual who can get all the right eyes on the pieces with their connections and using it as a marketing tactic to create a feeling and environment of exclusivity. That said even then there is a risk that unknown buyers who would have paid more will miss out. The one time it would be a major advantage would be something like the 1974-D aluminum cent where someone wants to sell it without drawing attention to it.
