Have You Ever Had Problems With Getting Paid By An Auction Firm

I am having a dickens of a time getting paid for material sold by a very well known East Coast auction house. I like them overall but this is the third time in a row that this has happened. Perhaps I should have severed ties after the first time but here I am. The story is that this house has some large buyers that pay pretty much on their own time for large amounts of purchases and the consigners just have to wait. Yes, there is a contract and but as usual the Terms and Conditions are favorable to the house.

I am interested in hearing from other sellers that have had this problem or similar with any auction houses. I am curious what issues people run into and how prevalent these issues are.

PS: I will share specifics about the house and issues once my current problem is resolved and if SCF is OK with my sharing said details.

It is a very bad sign if an auction house does not pay on time (it was the first indication that things were bad with Regency). It is their responsibility to pay the consignors on time. If they are not getting paid by their buyers on time, then they ether need to obtain a loan so they can pay their consignors or stop taking bids in excess of a buyers ability to pay on time (the slow payers are well known to the auction houses).

No, but I am sure some of our Regency auction users can answer differently.

Without knowing the specifics, when a company does that, it can indicate a liquidity problem. I.e. they don't have enough (or feel they have enough) "cash in hand" to pay out to their consignors without first getting paid for the purchases in that particular auction. It would raise concerns in my mind about the financial stability of that firm.

WKUSAU --Is correct in his statement some consignors are paid right away by the stamp auction firms , this is understood as the way to do business . Regency had "PERFERRED" consignors , these sellers got paid in a week ,but the Mom and Pop had to wait 60 or 90 days , but in the end it is these one time consignors who lost when Regency closed their doors .

rogdcam....maybe you should state facts NOW!
Why wait?? Maybe it can stop someone else from consigning or even bidding if the company has preferred business practices??

Agreed.
For me, once...ok stuff happens. Twice...I am asking for reasonable justification. Three times...strike, your out.
Don

Very shortly I will be finishing organizing my paperwork related to the sales and payments and will share the following:

1) The auction firm
2) The sales dates
3) Exact dates when payments, partial and otherwise, were actually issued and received

I am having a time finding documents from 2018 but am confident that I will.

With that information people can make their own decisions and draw their own conclusions.

There will be only one auction firm listed because I have never had this happen with any other.

But the other side of the coin needs sharing also ... what did their consignment agreement/contract state about their payment schedule after a sale.

John - 45 business days. I would not have started the topic if they had met that stipulation or even come close.

My problem is a little different. I consigned several lots of various items to an auction house back East, and signed the contract last July. I have heard nothing since. I wrote about 5 weeks ago, asking for a status, and have not received a reply.

Climber Steve - has your consignment been lotted? Have they been sold? Have you received a post-sale breakdown of results? When was the sale, and how much of a settlement period is in the contract? Whenever I have experienced a delay in payment, my experience has been that the auction house has contacted me and made me aware of the reason. If there is really no contact, and the grace period has passed, I would contact the ASDA, or perhaps the APS.

I worked for as few auction houses many years ago. My insider experience is that delays in payment (from the purchaser) DO happen, but on the order of a couple percent of total buyers. My experience as a consignor is that there is a delay in payment to me (for whatever reason) closer to 10% of the time. I've never experienced a shutdown in communication - THAT would pi** me off! I have been unable to adequately justify in my mind how a delay of 2-3% on the front-end morphs into a delay of closer to 10% of the time on the back end. The problem is, as a consignor, I don't know WHICH time the delay happens due to a slow buyer (or a lot extension) or due to some other hanky-panky.

Rogdcam, we are all interested in finding out the final disposition of your dilemma!

@mootermutt987: answers to your questions: 1) consignment been lotted? No (I've watched the on-line auction catalogs) 2) have they been sold? I don't think so as they haven't been lotted near as I can tell. 3) have you received a post-sale breakdown of results? no, but again, haven't seen them lotted. 4) when was the sale? N/A. 5) how much of a settlement period in the contract? Again, N/A.

This is not rare, unfortunately and is as noted, often due to deep pockets buyers not paying on time or due to expertising extensions. Still, I wouldn't have put up with it for a third auction, since that type of buyer usually magically turns up with the payment before the next auction that has something they want. This is very true when Sotheby's or someone of that level auctions a multimillion dollar painting and an individual buys it rather than a museum. So, is this actually due to expertizing extensions? Otherwise, it's a bad sign and you should go to the state auction commission and the Better Business Bureau (neither side has to be a member) and file a complaint. ASDA will merely pass on the complaint, basically.

As for obtaining a loan to pay customers on time, on what basis does a bank offer credit terms to an stamp or other auctioneer unless its owner is personally wealthy? An auction house typically has no assets to speak of. Sotheby's had been up for sale for decades, but there are no takers because its only moneymaker is its commissions that are used to pay staff, advertising, etc., like any auction house, with little left over. The owner gets prestige and a decent personal income, but that's about it.

Even if a stamp auction house has a retail arm or their own stamp purchases, bankers usually have no experience with little pieces of paper or the stamp business and therefore have no confidence in loaning money or giving credit based on that, particularly in recessionary times. In the house I worked at, the manager just before I arrived cultivated a customer that was a local bank branch manager and was able to prove the value of the business to him, which also had a large retail stock at the time. The business was given a line of credit. When that stamp business manager left to go into business on his own and the bank manager retired a couple of years later, the line of credit was withdrawn. Attempts were made to get it back, but it was never restored, for various reasons.

Happened to me once, and it was only a few hundred. I waited two auctions, then realized they were not taking a long-term view to business. I then bought a few better items in their next sale, at a good price. When I told them to offset the invoice with the proceeds owed to me, there was a pause but I got my purchases and exit strategy.

Climber Stave - I keep asking questions because I simply don't understand the firm's motivation to sit on your consignment. Is it large enough that it could possibly be a 'name' sale and they are simply waiting for the optimal time to have it? Could they be selling it in a private treaty type of transaction? Still, 8-9 months of no news is excessive.

If you are not getting satisfactory answers from them, I would follow hy-brasil's advice and contact the state auction commission. The ASDA's only real 'teeth' is that a dealer would probably do a lot to avoid being kicked out of the ASDA. If said auction firm is in financial danger, getting kicked out f the ASDA (assuming they belong) may be the least of their worries.

Good luck!