JR, Do you have any interest in posters at all or just in the workings of Heritage? If you've ever seen their auctions you will know that when they go live they will either say "no reserve" or "reserve not yet posted/met", so you know immediately if there is a reserve or not. Then as Grey and John explained, with a week to go if the reserve is not met, the price is raised to the bid immediately below the reserve so that if anyone bids they can win the item. This is the same price John will open the item up for at the live auction (instead of wasting time asking for bids that could not possibly win the item).
Heritage does not place any bids during the live auction. If in fact they bid on item (either by an employee collector, or by a buyer acting to purchase for their inventory), it is done prior to the auction going live. Many times during the break at the auction John has told me that his bids on two or three items had been outbid and he wished he had either focused on a single item or had placed a higher bid. Example: John wished to buy item #4 and item #5, he has a total of $500 he can spend in the auction, so he bids $250 on each one before the live session starts. During the session, Item #4 sells for $100 and item #5 sells for $275. Now John is sad that he could not bid again on Item #5 as he still had room below his budget, but Heritage does not allow this. This policy is fair to all, is it allows people like John to still be collectors and yet places bidders like us (or I should say like me as it it obvious you have never bid at Heritage) at an advantage over Heritage during the auction process. Heritage does not push the price above the reserve when there is no action on an item to make a single interested buyer pay more for the item than the opening or reserve, but that does not mean they (again either collector employees or purchasing employees) do not place proxy bids. It would be silly if collector A has a poster/coin/comic/whatever "worth" $5K and Heritage would be a willing buyer for that item at say $3K, but it sells for $185 at the auction because they would not be allowed to bid (or there is a reserve of $2500 on the item, but it again is unsold because Heritage can't buy it for themselves). While possibly an extreme example, you can't remove one of the largest buyers from the playing field. Consignments would dry up and it would not be a good situation for anyone. ----- Original Message ----- From: "James Richard" <[email protected]> To: [email protected] Sent: Wednesday, September 16, 2009 5:12:55 PM GMT -05:00 US/Canada Eastern Subject: Re: [MOPO] Heritage Response John, Apparently I was under a misapprehension as well because I thought Heritage still used hidden reserves. If not and, as you say, no one at Heritage ever pushes the price above the reserve, then what was N.P. Gresham doing? I realize you probably can't comment on that because of the lawsuit, but now I'm just confused. Both the President and the CEO have admitted to using a fictitious bidder who was not a real person to bid on and even win auctions. -- JR Petty, John - PG wrote: Hi Jeff: I think you’re laboring under some misapprehensions concerning the way the Heritage bidding system works. As the auctioneer of record for most of Grey’s auctions, let me address a couple of your concerns. You’ve mentioned reserves in this post and several others, and seem to be suggesting that auction houses should disclose reserves to their bidders prior to bidding. You’re absolutely right on this, which is why Heritage fully discloses all reserves at least one week prior to the actual auction date for Signature Auctions (items in the Weekly auctions are typically offered without reserve). Remember, reserves are set by the consignor, so if there’s a reserve price you feel is too high, that’s a consignor issue. IMO, it’s not in anyone’s best interest to set a reserve that’s unreasonably high. That’s why Grey takes so much time and care in working with consignors to set reserves that both protect their interests while at the same time offering a reasonable chance to sell. To address another of your points, when an item fails to meet the reserve prior to bidding, Heritage will increase the bid to one bidding increment below the reserve, and start the live bidding there. For example, if the reserve on an item is $1,000, Heritage will typically open the bidding at about $950 if the reserve has not been met during online and remote bidding. The next actual bid will take the item. Heritage’s reason for doing this is simple: they feel that their bidder’s time is valuable, and don’t want people wasting their time bidding against a reserve. In the case above, if the reserve is $1,000, and the highest maximum bid prior to live bidding is $200, whose interest is served by forcing the auctioneer – and the audience – to go through bids of $220, $240, $260, $280, etc? Even if live bidding tops out at, say, $750, the piece won’t sell and everyone’s time has been wasted. Surely you’re not suggesting that that would be a better system? With Heritage’s method, everyone knows the reserve, and they know that, if they bid, they’re in the running to win the piece. If, as you suggest, the market doesn’t want to pay the price set by the consignor, than the item doesn’t sell It’s as simple as that (items not sold are clearly marked in the Heritage Permanent Auction Archives). As for other dealers using Heritage prices as benchmarks for their own material, that is certainly their prerogative, as it is yours to refuse to buy a poster at a price you feel is unfair. I hope this addresses your concerns regarding these issues. It’s really very simple once you see it in action, and in that spirit I’d invite you to personally attend one of Heritage’s auctions and see the process in action for yourself. Once you actually see an auction in person, I’m confident that you’ll have a much greater understanding of the way Heritage does business. Best, John Petty From: MoPo List [ mailto:[email protected] ] On Behalf Of Jeff Potokar Sent: Wednesday, September 16, 2009 1:06 PM To: [email protected] Subject: Re: [MOPO] Heritage Response This sort of pricing happens all the time. All one needs to do, as an example, is go to ebay, and find an expensive poster up for sale or auction. Somewhere in the description, one will often find a Heritage data base reference, for what this same poster sold for 6, 8, 12 months prior, for hundreds or THOUSANDS more-- and what a great deal the copy being looked at on ebay is. Is this really true? So many questions about this practice. And one other thing that was mentioned. If a certain item has a reserve, of say, 500.00, why does the bidding start at 200? That makes no sense. Wouldn't it be better for consignor as well as the auction house to simply make the reserve price of 500.00 the opening bid? Even on ebay, this appears so silly.. an item has an opening bid of 2.00, yet the reserve may be 200.00. And if these shill bidders are there to get jump the bids, so that the reserve is at least met, this, at least appears, to be tampering with what buyers and the market want. If a poster with a 500.00 reserve comes up on the block, and no one bids anything close to the reserve for an opening bid, doesnt that say something about the reserve placed and what the market may feel it is worth? For a shill bidder to present a bid, of say, 400 to get the item going, is a false way of getting others to bid, since the shill has no intention of actually buying the piece. Just some thoughts.. cheers. jeff On Sep 16, 2009, at 9:03 AM, Walton, Jeffrey wrote: Yeah, I’ve seen this as well…but what ticks me off – the new price for that poster across the board is this over inflated cost thanks not to the bidders who drove up the price but to the news of it’s sale….so now everyone who has this $5000 poster in stock and if sold for 5k would probably make some sort of profit, now raises the price…they can even raise it double and state – “this just sold for $25,000” a real bargin. And don’t tell me it does happen….because I’ve seen this too….the power of perception is great From: MoPo List [ mailto:[email protected] ] On Behalf Of Franc Sent: Wednesday, September 16, 2009 10:49 AM To: [email protected] Subject: Re: [MOPO] Heritage Response I've actually seen this happen and not at the big auction houses you mentioned. Two bidders on the floor got into a pissing match and each attempting to top the other, sometimes upping the bidding price by as much as $5K in one bid for a poster(s) that was clearly not worth the astonishing levels it had suddenly risen to. I did question people at the auction who knew the two bidders and was told that they were bidding for clients who really wanted the poster(s) in question. I also interpreted that to mean that they each may be working on a commission based on the selling price and hence didn't care about how high they bid, especially since they weren't working with their own dollars. FRANC -----Original Message----- From: MoPo List [ mailto:[email protected] ] On Behalf Of Bruce Hershenson Sent: Wednesday, September 16, 2009 10:34 AM To: [email protected] Subject: Re: [MOPO] Heritage Response Incidentally, I am not saying that only one auction house likely does this. I have seen many many results at Christie's and Sotheby's that fit this profile. When I left Christie's in 1997, and was looking for another auction house, I made it very clear to Howard Lowery (who I then did three auctions with) that I wanted NO tricks played with the bidders, and we did not have ANY of those crazy results. And in my own auctions since 2000 I have almost never had crazy high results (out of 400,000+ auctions). It may not be proof in a court of law, but it sure seems astoundingly coincidental that these crazy bidders (who love to show up in twos!) ONLY patronize certain exact auction houses. Bruce On Wed, Sep 16, 2009 at 6:49 AM, Bruce Hershenson < [email protected] > wrote: I think a concern a lot of people are expressing is that we have all seen how a poster that used to always be around say $5,000 suddenly sells for $25,000, and we have all wondered how it is that TWO totally separate people suddenly took it into their head to bid five times what previous people had bid. I mean, one person can decide to do that because they feel they HAVE to have that poster, but TWO of them seems to defy the odds. And now some of us, in the light of these revelations, are wondering if there really WERE two different bidders. And if a "house account" were used to get someone to pay five times the former "going rate" is THAT alright (and is it excused because the person chose to enter a very high bid)? Is that the punishment proscribed for placing a high bid, and even if it were legal in the past, should this practice not be stopped in the future? Bruce On Wed, Sep 16, 2009 at 5:10 AM, Richard Halegua Comic Art < [email protected] > wrote: At 02:57 AM 9/16/2009, Neil Jaworski wrote: I agree with all James Richard's comments on this issue. Those who feel that Heritage have an obligation to get the "fair market price" for their consignors (and, by a happy coincidence, for themselves) should reflect upon how these practices might have pumped up these "fair market prices" in the first place. Indeed, if this N.P Gresham device has been used as widely as some people are suggesting, what extra padding is in the hobby as a whole? Those MOPOers who claim that this is all just a playful bit of showmanship (wedded to a fiduciary duty to poor sellers who are too nervous to set a realistic and honest reserve) should enrol in their nearest high school ethics class. Neil I said this: 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 so please don't mis-characterize what I said If N.P. Gresham is acting improperly, that is a bad thing, but I might need more information before I can come to that conclusion and determine that Heritage was or was not acting improperly concerning whether or not a consignor has a realistic perception is immaterial to the debate because it has nothing to do with any of the allegations against Heritage. Rich Visit the MoPo Mailing List Web Site at www.filmfan.com ___________________________________________________________________ How to UNSUBSCRIBE from the MoPo Mailing List Send a message addressed to: [email protected] In the BODY of your message type: SIGNOFF MOPO-L The author of this message is solely responsible for its content. Visit the MoPo Mailing List Web Site at www.filmfan.com ___________________________________________________________________ How to UNSUBSCRIBE from the MoPo Mailing List Send a message addressed to: [email protected] In the BODY of your message type: SIGNOFF MOPO-L The author of this message is solely responsible for its content. _____________ The information contained in this message is proprietary and/or confidential. If you are not the intended recipient, please: (i) delete the message and all copies; (ii) do not disclose, distribute or use the message in any manner; and (iii) notify the sender immediately. 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