Teletrade auction scheme

Discussion in 'Coin Chat' started by Collect89, May 5, 2011.

  1. Collect89

    Collect89 Coin Collector

    Yesterday, there were a couple posts between CamaroDMD & Collect89 regarding a Teletrade auction lot. Rather than hijacking yesterday’s thread, I’ll post the subject conversation here in this new thread.

    Collect89 Wednesday at 4:30 EST
    Here is a proof 63 CAM on Teletrade. Right now the bid is $2,300.
    http://www.teletrade.com/coins/lot.a...9&imagetype=j2
    Wouldn’t it be interesting if the Teletrade computer bids it up to $3,000 & then lists it as "not sold" tomorrow.

    Collect89 Wednesday at 9:18 EST
    It is after 9:00 EST. The bid is now up to $2,800 and the next bid will be $2,900.

    CamaroDMD Wednesday at 10:15
    How exactly does this work? Does the computer run up the bids?

    Collect89 Thursday at 8:08
    They say somewhere in their rules that they have the option to bid on their own coins & on behalf of their consignors (or something like that). I think I'll post a new thread so the CT folks can all comment.

    This particular Teletrade lot was bid upwards all day yesterday (apparently by the Teletrade computer). If you had bid $2,300 or $2,400 or $2,500 or $2,600 or ..., I believe you would have been incrementally outbid by the Teletrade computer later in the day. It gives a bidder the appearance that people are bidding on the coin when in fact; it is the computer raising the bid to an unknown reserve. In yesterday’s example, Teletrade started bidding at an artificially low price to get buyer’s attention & interest in the coin. Today this coin is listed as not being sold.

    This is not my first experience with this Teletrade scenario. I’ve lost more than one coin to the Teletrade computer’s bid and the next day found the same coin listed as “not sold”. (I’ve also won some of the best coins in my collection from Teletrade). So do you guys have any comments?
     
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  3. GDJMSP

    GDJMSP Numismatist Moderator

    It only gives that appearance to people who don't know that is exactly what is going to happen on any lot that has a reserve. The same thing happens on every coin auction there is, including ebay.

    It's no scheme. That's how reserve auctions are supposed to work.
     
  4. BUncirculated

    BUncirculated Well-Known Member

    I would say if Teletrade mentions this happens, as you stated and is quite known to both sellers and buyers alike, there is no scheme or deception. Teletrade has had a long, well established reputation in the online business of auctioning coins and I don't think they would tarnish their reputation by engaging in deceptive practices.
     
  5. coleguy

    coleguy Coin Collector

    So, whats the difference between what they're doing, and shill bidding? If Ebay sellers bid their own items up to meet unknown reserves, everyone would call it illegal and report it. I don't use Teletrade, so either way it's irrelevant to me, I'm just curious.
    Guy
     
  6. Collect89

    Collect89 Coin Collector

    I meant no offence using the word scheme. I intended the word to mean that Teletrade simply has a cunning systematic plan of action.

    I prefer reserve auctions that actually inform you if there is a reserve & if the reserve has been met. Nowadays I now only look at Teletrade coins toward the end of the auction when the prices shown are more realistic. If I look too early, I find many bargains and just get angry for wasting my time.
     
  7. Collect89

    Collect89 Coin Collector

    Teletrade makes their policy very clear at the very beginning of their terms & conditions. Here is an excerpt:

    Consignors that bid on their own lots in the Auction Sale may pay a different fee than the buyer's fee charged to all other buyers, and may receive a rebate commission in whole or part if successful.

    Teletrade reserves the right to include in any auction sale its own material as well as material from affiliated or related companies, principals, officers or employees. Teletrade may have direct or indirect interests in any of the lots in the auction and may collect commissions. THE TWO PRECEDING SENTENCES SHALL BE DEEMED A PART OF THE DESCRIPTION OF ALL LOTS CONTAINED IN THE CATALOGUE. Where the Consignor has re-purchased a lot and the lot is either returned to the Consignor or otherwise dealt with or disposed of in accordance with the Consignor's direction, or pursuant to contractual agreement, Teletrade reserves the right to so note in the prices realized or to omit a price from the price realized. Lot(s) may carry a Reserve. A Reserve is a confidential price or bid below which the Auctioneer will not sell an item or will re-purchase it on behalf of the Consignor or for Teletrade.
     
  8. rlm's cents

    rlm's cents Numismatist

    There is no difference between what Teletrade is doing and a reserve on eBay. The bids may be handled slightly different, but the affect is the same in the end. Shill bidding is done during the auction. Both the reserves are preset before the auction begins.
     
  9. GDJMSP

    GDJMSP Numismatist Moderator

    As I said, it's not just Teletrade. It's every auction house there is - ALL of them. And the difference is pretty simple.

    You don't know that there are shill bidders and shills work by using deception. They only pretend that they are trying to buy the coin and merely drive up the price after the auction has started for others who are genuinely interested.

    Reserve prices work differently and they are set by the owners before the auction ever starts.

    Say you're the owner of a coin and you place it in an auction. But you have a minimum price that you are willing to accept before you will agree to sell the coin. You decide on what that price is before the auction ever starts - that's your Reserve Price.

    But because of human nature if people (other bidders) know what the Reserve Price is before that auction starts and they think it is too high, nobody will bid on the coin. So reserve Prices are kept secret and that allows the bidders to enter into competition for the coin with each one bidding and then outbidding the others. That is the nature of auctions.

    Now if during the auction the price rises but it is yet still below the Reserve then the auctioneer, or the software as the case may be, increases the bid by the next bid increment. But you as a bidder don't know if it is really another bidder or just the Reserve kicking in. And it really doesn't make any difference because if it is another bidder then you either have to increase your bid or give up and move on. So either way it's the same thing.

    Once the Reserve is met and or exceeded then it is up to the bidders to decide what the top price will be - who want's the coin the most. Eventually everybody gives up because they are not willing to pay that much.

    It's no different than if you as an owner walk into a coin shop or a coin show and try to sell your coins to the dealer there. You have in your mind a minimum price that you are willing to accept - that's your Reserve. And if the dealers offers less than that then you walk away. If he offers that much or more, then you accept his offer and sell him the coin. It's no different at an auction for in both cases you as the owner have a minimum price in mind that you will accept.

    Now you can say that that is no different than shill bidding if you want. But it isn't.
     
  10. KoinJester

    KoinJester Well-Known Member

    Just food for thought, send Ian (greatcollections) a msg he knows the intrnal workings of TT and see if he will comment
     
  11. Owle

    Owle Junior Member

    Teletrade Auctions

    Their Tuesday auction is a true auction--as far as I know no reserves are accepted. Other auctions have automatic bid raising until 7pm. and then after that only bids as placed. A representative from Teletrade told me it is against the rules for consignors to bid on their own lots, but if they do they have to pay on both ends.

    I have been consigning to them for many years. Items worth selling are either ugly coins in a good holder or those with a strong numismatic premium that Heritage or Spectrum will not make good cash offers for. Semi-numismatics are a loser in many cases--the consignor fees will eat up any profit. You would do better to sell to the major buyers.
     
  12. Collect89

    Collect89 Coin Collector

    It is nice to learn this.

    It would be nice to know if the automatic bid raising ends at 7pm PST or 7pm EST. One is at the end of the auction. The other is 3 hours before the end of the auction.
     
  13. 19Lyds

    19Lyds Member of the United States of Confusion

    I assume you are referring to Heritage or some other venue that conducts an auction or several days or a week. Teletrade's auctions only run for 7 hours.

    I personally do not have a problem with Teletrades method since the only thing that really matters is what the piece hammers at. If a seller places an exhorbitant buy back bid and the coin never sells, Teletrade gets a piece of that action to the tune of 5% upto a maximum of $100.
     
  14. 19Lyds

    19Lyds Member of the United States of Confusion

    7pm PST which is 10pm EST. Generally speaking, if you watch the auction, the sellers maximum buyback bid (reserve) is usually the amount showing at around one or two hours before the auction closes. I've seen my own personal coins displaying that information a couple of hours before the bidding ended.
     
  15. coleguy

    coleguy Coin Collector

    Ok, that explains it a lot better.

    Though I have to mention that thats not how all auctions work, at least those not electronically, as I've been to some large live auctions where this wasn't done. If there was a reserve and it wasn't met, it just went unsold, and the house specifically mentioned they could not bid on the auctions themselves. This is where my confusion came from.
    Guy
     
  16. Owle

    Owle Junior Member

    Teletrade

    Actually I think that 7pm EST is when the automatic bid raising ends--that has been my experience.

    If you do not put a reserve in, the coin will likely go too cheap.
     
  17. mark_h

    mark_h Somewhere over the rainbow

    I always wondered how it worked at teletrade. Interesting - I have no problem with it, cause I usually bid once and then forget it. I do not win many at teletrade - or heritage here lately.
     
  18. Duke Kavanaugh

    Duke Kavanaugh The Big Coin Hunter

    Good info.
    Thanks for sharing.
     
  19. GDJMSP

    GDJMSP Numismatist Moderator

    Then you must go to the auctions of some house I have never heard of because all major auction houses can and do bid on items in their own auctions. That is not to say that they bid on all of them though, they only bid on the ones they want.
     
  20. Owle

    Owle Junior Member

    Auctions

    I have seen Spectrum's coins end up at Teletrade--same parent company so I guess it's not surprising. Heritage always has the option to run its coins in its auctions if it doesn't have a ready client to sell the coin to. I wonder what percentage of their auction coins are theirs and what percentage are consignors?

    The personnel at these companies has changed over the years. I remember when Teletrade was near Kingston, NY. I'm sure the California weather is a little nicer for the workers.

    Looks like they have a new customer service person, Sydney McGregor. Check out her Myspace or Facebook glam-girl pages!:smile
     
  21. I have lost out on several coins in which I was high bidder at exactly 10:00pm when the bidding ends on the east coast. Not sure what exactly happens. Some have not sold and were put up for bid later on, and at other times someone with very quick fingers simply outbids me in the final seconds. When this happens, I just think it wasn't meant to be and move on. TC
     
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