Still Haven't Received Full Payments From My Consignment With Zurich Asia Hk046 Auction

Yes, I'm not joking. Six months have passed and still I haven't received full payments from my consignment with Zurich Asia HK046 auction ....

In fact, I have only received about 40% of the amount from the auction house.

The most annoying part is ... they have "conveniently" forgotten about me and have not sent me any updates about the payment and completely kept me in the dark for many months.

Can't imagine such irresponsible act and a lousy experience from a reputable auction house.

I am wondering : am I the only one with such experience?

I don't have experience with Zurich but I have chased other auction houses for up to a year for my money. Usually they claim that they have non-paying bidders. Just another thing that has soured me on actually owning stamps as opposed to enjoying philately for the study and fellowship.

This auction house will be holding its next auction some six months ago.

http://www.zurichasia.com/eng/home/

I do not have any experience with Zurich, but it took Spink more than a year to hand me my money. Same old reason - non-paying bidders.

Having worked FOR a few auction houses many years ago (35-ish), from the inside, this stuff happens (non-payment from customers) and it is, frankly, quite often big buyers - dealers that buy up a quarter of the lots in an auction and THEY don't pay until THEY have sold them and made THEIR $$$. It IS frustrating and I cannot excuse the auction houses' actions. Generally, slow paying bidders get dumped from client lists IF they are small fish, but if they are Big Fish, there seems to be an unspoken understanding between all involved. It takes quite a bit to (a) get paid by these guys, and (b) get the motivation to kick these guys off a mailing list. If you are owes money, you may assume that the outstanding payments to the auction house, then to you, would at least trickle in over some period of months, but usually the non-payment of many lots is by one or two large buyers. If you haven't seen ANY payment in a while, it is probably non-payment by ONE customer. That doesn't do YOU a lot of good, but that's probably the case. If it is a significant amount, perhaps have a lawyer send the auction house a strongly worded letter threatening a lawsuit. LEGALLY, they have probably not broken any laws (payment due on lots bought by non-paying customers is probably addressed in SOME way in the house's terms of consignment - or even addressed by omission of some sort), but nobody wants to be under THREAT of lawsuit, even if they know there is no case - the squeaky wheel gets the grease. This exact issue (non/late payment to consignors) has always been a big issue and many people have lost sleep over it over the years.

FWIW, when I consigned some of my OWN stamps to my employer's auctions, I often got delayed payment as well. AND, I could go into the computer system and see what the story was. AND, the story was that my employer had NOT received payment. It is a common thing.

Most businesses use a line of credit to manage their payables and receivables, and they don't use their customers as a bank. Many auction houses have in their T's and C's that late paying bidders pay a certain percentage each month in interest. The auction houses should hold themselves to those same rules.

A policy of not paying suppliers would SO* not be acceptable in just about any other American industry.

I know one auction house that did operate the way shermae describes, but I don't know how common it is.

You sell my stuff, you owe me money. Your buyer doesn't pay you, your problem.

I suspect you are right, eyeonwall. So, if it gets truly ridiculous, like no payment for a couple of years, what is the consignor to do? He can't sue the non-paying buyer from the auction - heck, he most likely can't even IDENTIFY the buyer. T's & C's, or not, at some point the auction house is subject to a lawsuit. You sue them, they sue the buyer. After all, your contract was with the auction house, not their customer.

The problem with all this I'm-gonna-sue-you talk is that lawyers are pretty darned expensive. Unless, of course, YOU are a lawyer and you want a new hobby (suing the shysters that crapped all over your enjoyment of your previous hobby). Other than threatening to sue, or carrying through with it, it seems that there is not much you can do except wait. You can try calling up and speaking to the owner, but I would expect that he has had lots of experience with worse conversations than that.

When I sold my collection in 2005, it was a pretty good time for the classic US stamp market. I was very fortunate in that all of my material sold and I was paid promptly, with three categories of exceptions -

1) A couple items were bought on extension and came back with a flaw noted and were returned to me.

2) A group of 12-13 mostly very nice items was returned to me, as it was explained to me that a single buyer won those lots, and then asked to be "let out" of his obligation to purchase them, which the auctioneer did. I was actually happy to get these back.

3) Finally, to the point being discussed in this thread - one lot - and only one, took me a full year or more to get paid for. I would periodically call and ask for status on it, and the auction house told me that they were waiting to be paid. So that reinforces what is being discussed - although for me, luckily, it was only one lot. Now it gets funny - I happened to be talking with a friend one day, and he mentioned that he still hadn't paid for a lot that he purchased in my sale. He actually asked me if I wanted it back or if he should just buy it. We had a good laugh over that, after which he paid for it, and all was good.

So yes - in my case as well, I experienced the auction house holding up funds until they were paid. It wasn't an issue for me in my case, and is actually an amusing memory, but this clearly does happen.

To shermae's point...

If this way of doing business – the consignor doesn't get paid until the auctionhouse does – is common in the industry, this is a failure of the industry.

My family business is a supply warehouse. The business maintains a line of credit so they can pay their suppliers as the bills come due, regardless of whether their customers have paid on-time or not.

You don't leave your suppliers (in this case, the consignors) hanging, and if you have a buyer who won't pay on time, you take legal action to collect the debt and/or bar them from doing further business with you. Anything else is just bad business, and wouldn't be tolerated in 99% of businesses that want to stay in business.

I'm confused, am I missing something?

Both parties are obligated under the Terms and Conditions for each auction house. If the T&C's do not define the payment terms, then I would assume that you will get paid when they feel like it***. I certainly would blame myself for agreeing to such an open-ended agreement.  

If the T&Cs are defined, then both parties should abide by them. If the auction house is breaking their own T&Cs then seek recourse.
Don

***'when they feel like it' is the same as 'we'll pay you when we get paid by the buyer' since no auction house is going to open their books to you to verify the buyers payments'

Back then, the industry standard, was you'd get paid 45 days after the sale, or up to 90 days if a lot was sent out for extension.

I do not recall what language there was about non-payment for lots and the consignor. I will say that in my case, it was pretty clear to me that if I had wanted to cancel the sale and just ask for my lot back, it would have been ok. I did not choose to exercise that option as I was in no hurry. I don't recall what language, if any, in the contract, covered the consignor, for the case where the house would send out a lot to a buyer, on credit, but then the buyer didn't pay.

I get the impression that certain auction houses rely on a handful of big buyers so those buyers have leverage - they pay when they feel like it or when they flip the material since they know the auction house needs them. And with the auction house therefore living hand to mouth, they don't pay consignors for the same reason - they have leverage. It's probably not worth it for the typical consignor to pursue expensive legal action, given the smaller amounts owed and the hope that springs eternal when they hear "any day now" from the house. The house knows that and they figure that these consignors probably don't have a steady flow of good material to provide so what do they care - they may never see them again anyway. Again, the house will take care of the big consignors on whom the house relies for high value material. And what banker is going to extend a line of credit to these houses, particularly in the philatelic area, given the flaky way they do business - flouting the T and C's and not going after their debtors as any normal business would do; the uncertain future of the industry, particularly in the philatelic area; and the well-known bankruptcies such as Regency and the house in Australia that went belly up? Just a minefield for consignors - I'm glad I got rid of my high value U.S. collection a few years again in the middle of the COVID mania and I harassed the house so much, and the house was doing well enough at the time, that they paid up in strict compliance with the terms, except for a few small laggard items. The rest can go to ebay.

Having followed a couple of online Stanley Gibbons auctions, among which yesterday's Cyriax sale, I have noticed there are a few paddles that keep winning many of the expensive lots. So, yes, there may be buyers that have leverage.

As a collector, I received the invoice for my purchase yesterday evening. I had to pay within 7 days: no payment, no stamp.

In my case the worst experience I had involved a non-paying bidder that won all of my lots. It was a sum in the middle five figures. I know for a fact that the material never left the auction house so it was not about flipping it and then paying which I doubt many if any auction houses would risk now. The bidder was a very well-known regular with a large credit line who never paid on time. They were allowed to bid for years because without them many of the lots would go unsold or sell at a greatly reduced price. I do note that after my bad experience that auction house now requires a credit card on file before you are allowed to bid. I think at some point enough angry consignors owed enough money would reduce the flow of material coming in. My material was red box material. After that experience I chose to sell my main US collection through Rupp because the fee was the same but getting paid was never going to be an issue.

I will say that there are good guys out there. Raritan is the best I ever dealt with hands down. I sold my Russia collection through them and received an advance of half the estimate plus half the proceeds within a week or two after auction with the balance showing up before it was contractually due. Harmer, Rasdale, Siegel and Cherrystone paid on time.

rog - did they re-offer your material in a subsequent sale?