What Is The Best Way To Buy At Auction? #33 Example

I used to work for a few auction houses about 30 years ago. It was quite common to call a few dealers and ask them if they had anything that they would like to consign. We often got packages of potential lots. We could go through each package, pick and choose what we felt would be a good fit in the sale, and return the rest. Often, there was a minimum amount that would be acceptable to the consignor (think of it as a reserve), and our decision on whether to accept a lot for an upcoming sale was contingent upon whether we thought the minimum was reasonable or not. Frankly, these lots often went unsold. Many of them were accepted simply to enhance the appearance of the sale. We would accept rare/spectacular items knowing full well that we would not reach the owner's reserve. A set of 1869 Inverts, or dollar-value Columbian blocks always look good and probably attract people to the sale. We often saw the same material in other companies' auctions. Many dealers simply had a bunch of impressive stamps that always seemed to make the rounds from auction house to auction house - I suspect they had 'a packet' always ready to go, and it would be sent to whomever asked for it.

In the age of the internet, with these dealers just putting their stuff up on ebay with a price, I don't know if this practice still happens, but I expect it does.

Also bear in mind that every auction house has their own 'stock' that ends up in their own auctions, and I guarantee that they also have a 'reserve'. Where I worked, if one of our items went unsold, we would put it away for a year or so before re-running it, to give the appearance that it sold and came back up on the market a year later.

Good information provided by mootermutt—he just confirms what we already expected.

Having participated both as a seller and buyer in antique auctions for 30+ years, I've seen the good and the bad with auctioneers. The good usually have merchandise that will generally sell itself without any tomfoolery. If an item isn't receiving bids it should bring, they will plainly announce they are withdrawing the item for that reason, first asking the owner, if present at the auction what they desire to do, and if not present using their judgement about protecting the seller. Sometimes that will stimulate the bidding for those who were holding back. They will announce reserves, if there are any, and start the bid at the reserve. They will announce when they are bidding a "left bid" by phone/or by written bidding whenever/as they are raising a floor bid. And, I've seen them shut off floor bidders that they know are shilling or just running up a competitor in the retail business. On the other hand, I know of auctioneers that use "house numbers", up to
three or more, during bidding to drive up bids. Often on their own merchandise and sometimes on consigned merchandise from sellers who will "work with them" on that practice. If it doesn't sell to a "real" bidder/buyer, it usually holds over until a later auction. I've also known them to use "shill" bidders (at their auctions and competing auctions). They are also not bashful about prodding bidders unabashedly. If they have an item with a reserve, they will rarely announce it unless they fail to get to and beyond the reserve by whatever method they may try. Inexperienced buyers can easily end up over-paying from unscrupulous auction houses. These houses don't usually survive for long. Now, for both types, there can be the non-paying buyer and the buyer who wants out of a bid for undiscovered flaws, even though they have had time to examine items, sometimes the flaws aren't discovered until after items have been brought out away from tight packing (think furniture), and other reasons. Good auction houses are pretty good about working with you on that; their reputations is important. The bad houses; it just depends on what the issue is and the argument as to the outcome.

I've not been to a stamp auction and am not trying to "paint" any as being anything other than "above-board" in their dealings; just throwing out some things I know about auctioneering in antiques that might apply--or might not. I would think that the stamp auction business, especially with the more national houses, would be trustworthy, but "experienta docet".

"One reason for this can be a non-paying bidder. Talk to any large auction house principal and they will tell you that it is one of the most unpleasant things that they have do deal with and it is not a rare occurrence."

The % of items that are not paid for is very small.

Another reason an item might reappear at the next auction is it was returned because the bidder (or their agent) bid on the wrong lot. Being humans it does happen, but again this is a very small %.

If you see a significant number of items reappearing, something manipulative is going on.