Rich,
I gotta disagree on the idea that it is OK to "only shill up to the
reserve and thus insure the item sells". For one thing, it encourages
the placing of unrealistically high reserves. But I never approved of
hidden reserves in any case. It seems to me the proper way for an
auction house to handle reserves is to publish them clearly as part of
the auction description and then see if anyone bids that amount or
higher. Or, better still, simply take whatever the consigner wants the
reserve to be and set that amount as the "minimum starting bid" for the
auction and quit pretending that an items starts with a minimum bid of
$59 bucks when there is no possibililty that the item will sell to
anyone unless the subsequent bids reach the $400 reserve. I understand
low starting bids coupled with hidden reserves has been a common
publicity and interest-piquing technique, leading people to believe they
can get a great bargain when in fact they can't, but it's a technique
I've never liked and I never participate in auctions like that.
But even if it has been "common practice" and somehow socially
acceptable for auction houses to use house shills to bid up to the
reserve, it is still "shilling". Sure, you can say "but no one gets hurt
if the shill stops at the reserve because no one was going to win the
item anyway if the reserve was not reached" -- but that doesn't change
the fact that the bid is being artifically pushed up by someone who
knows what the reserve is (and possibly what the maximum bids of the
other bidders are). Besides which, there is no way to be certain the
house shill stops at that point. As you have said about the fake
posters, it's the Bernie Madoff syndrome: Maybe it starts out with the
shills quitting at the reserve, but at some point the temptation to keep
on shilling past that point is going to be very strong -- and, hey,
who's to know?
I'm kinda surprised to see you taking the position that there's nothing
wrong with "shilling up to the reserve", since you don't do anything
like that on MoviePosterBid. You simply set the starting price without
any hidden reserves, let the auction commence and what the final bid
ends up being, that's what the item sells for. Simple and straight
forward. Bruce's auctions run the same way. What you two do is the way
it should be done.
-- JR
Richard Halegua Comic Art wrote:
Folks
I think the news article is a little bit of a red herring, in part for
the reasons he mentions (disgruntled employee) and in part because we
all know that the house does bid against reserve prices, and this info
is posted to their catalogs.
House bidding is nothing new. It's purpose is to bid against the
reserve so that an item sells, creating a happy buyer, seller and
auction house.
This is how it's supposed to work:
the reserve is $400, but the item starts at $200. It is Heritage's
fiduciary duty to the seller to bid up to something just under the
reserve. So Heritage might bid $390 to get the $400 bid from a buyer.
When the $390 bid is the top bid, Heritage does state "still available
at HA.com" indicating that the $390 bid did not win the item, that it
fell below reserve.
as long as that's what's going on, it doesn't seem that anything
nefarious is happening.
Here is where it would step in negative territory:
If Heritage were to continue bidding in order to drive up a price past
the reserve, without the intention of buying it themselves, that would
be a bad thing. I haven't seen or read anything that indicates this is
so. Though to be fair, I have had friends tell me anecdotally that
they feel this is the case, but they have not given me any examples to
prove that claim.
Also, Heritage does indeed sell material they own in all fields from
posters to coins to comics and this may be a sticking point to some,
however as long as they treat Heritage-owned merchandise just as any
other consignor, they do not drive up prices beyond a reserve and they
do not raise the reserve after introduction of the auction, well, they
would not be doing anything wrong.
I can say that I do alot of digging in Heritage archives and I do see
items that "repeat"
for instance, they sold an Australian Lady in the Lake poster in 2007
in a signature auction and it ended just under $300, with myself being
the underbidder. The item resold last year and I won it for under
$200. If they owned the item, it did not meet a reserve and they
resold it or if it was re-consigned, or even an unpaid item - I do not
know.
But in the comics area I see considerably more repeat than I do in
posters. There are some CGC encapsulated comics where Heritage has
sold the same copy 3 times, with a year or less in between. here is a
copy of Superworld Comics that has sold 3 times
http://comics.ha.com/common/view_item.php?Sale_No=7007&Lot_No=93195&src=pr
http://comics.ha.com/common/view_item.php?Sale_No=830&Lot_No=93164&src=pr
http://comics.ha.com/common/view_item.php?Sale_No=826&Lot_No=41513&src=pr
there is no doubt it is the same copy as CGC has a serial number on
the capsule #0079833010 which is clearly visible
the prices on the first two times are exactly the same which may be
saying "did not meet reserve"
however, if the item did not meet reserve, it shouldn't be in the
archive as a sold item so on this I am puzzled as it can be construed
as "suspect"
I'm guessing the person who should be queried on that is Ed Jaster
(comics guy)
this is not the same as Babe Comes Home 1sheet which was sold, but the
buyer could not complete the purchase and the poster was resold at a
much lower price 2 years later
Texas law of course is different than NYC law for auctions. It does
allow for more latitude on the auction house's side which though I may
think are dubious laws, are still the laws. (does anyone know if it's
still against the law to pick your feet in Poughkeepsie??)
to me, I can't find a smoking gun against Heritage in this area. If I
could, I may have a different feeling about it, but as it stands, all
I am hearing is innuendo and lacking empirical evidence, I just "can't
get there" on this issue
Rich
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