Why do auction houses realize higher prices?

[kingjammy24]

auction houses typically realize higher sales prices than ebay and most dealers. apparently, the sales prices are so much higher that consigners are willing to pay a 15% sellers fee and many therefore choose auction houses over ebay or selling their item directly. also for this reason, many make a fast buck by flipping ebay items directly into auction houses.

i'd like to hear some theories as to why buyers will pay more for an item from an auction house than if that same item were available on ebay or from a dealer.

rudy.

[sammy]

Shill bidding.

[otismalibu]

I won an item that was offered by Philip Weiss Auctions a few months back. When I called to pay by CC I told him that it seemed odd that I won the auction yet never reached my max bid. The guy just started laughing and said they like to have repeat customers.

Can't disagree with Sammy. You just know it's going on. When you see the stuff that people in this hobby pull in plain sight, why not shill when it's basically hidden & impossible to prove.

When I see an item end for $1500 at one auction house, then end for twice that three months later at another, one has to wonder.

But now eBay is set up for easier shilling as well. Bidder 1, 2, 3...

[harpt]

The major difference being that the ebay seller does not know the bidder's max.

[David]

In defense of the big auction houses, if you send a $10,000 check to Mastro, Sotheby's, Lelands, etc, you know the money won't be disappear. You can't be so sure when buying on eBay. I think that alone is enough for many to bid in the big auctions.

[David]

Also, I know the major auction house aren't perfect, but authenticity and grading-wise, they're about 20x better the average eBay seller.

I tend to believe that there are a good number of wealthy collectors/investors who don't want to deal with eBay, and who put their money into the Mastros of the world.

[kingjammy24]

shill bidding wouldn't explain why buyers seem willing to pay more for items at auction houses. a shill bid can only go as high as a bidders' legit max bid. the question is why are bidders' max bids higher at auction houses than on ebay or elsewhere? if you've got a pujols jersey on ebay that doesn't budge at $2k, why does it get $3k when someone simply moves it to an auction house?

david: you're saying the big draw that buyers/sellers will pay a combined 30% for is nothing more than a simple escrow service? typical escrow fees for six-figure mortgages are a few hundred dollars. when an auction house sells a $100k item, they pocket $30k.

"I know the major auction house aren't perfect, but authenticity and grading-wise, they're about 20x better the average eBay seller."

i'm not sure i'd agree. i regularly see some auction houses stuffed full of junk. you might be surprised how many auction house items came from ebay or were dumped there by dealers you wouldn't ordinarily trust. they do it because they know they can't sell it on their bad rep. i see many garbage items ping-ponged amongst ebay and between various auction houses. the only difference is that they don't tend to sell on ebay whereas they do at the auction houses. it's the same garbage items though.

"I tend to believe that there are a good number of wealthy collectors/investors who don't want to deal with eBay, and who put their money into the Mastros of the world."

i agree but i'm curious as to why you feel they don't want to deal with ebay. what's the difference between lampson and an ebay con artist?
what do these wealthy collectors see as being better about auction houses? is it simply the escrow feature or is there more to it? is it that these wealthy collectors have more money than knowledge and feel like at auction houses, unlike on ebay, someone's done the work for them (when in fact the work hasn't really been done)?

you've got gfc's richie russek selling a meigray game-issued palmeiro as "game used" twice, mastro's doug allen putting his own items into his auctions against his company's policies (and trying to get away with swapping a facemask), historic's james brown caught buying game-issued items off ebay and putting them into his auctions as "game used", ad nauseum. not to mention all the stories about how it takes months for consigners to get paid. how is this any different than the chicanery that goes on on ebay? the letterhead is fancier, the suits are more expensive, but ultimately it's the same old BS isn't it?

there's a lot of rabble on ebay but there are also many great sellers like kim stigall, jim yackel, splinters, etc. i'd take those guys over the james browns, doug allens, and richie russeks any day.

this forum regularly brings up laughable pieces at many auction houses. when was the last time someone exposed rubbish at ball park heroes, jim's jerseys, vintage bats, birdbats.com, ? i don't believe any of the ebay sellers i mentioned would ever be stupid enough to sell a 1994 single-color nob mcgwire: http://www.americanmemorabilia.com/A...ction_ID=22278

or a 1994 griffey without a nameplate: http://www.americanmemorabilia.com/A...ction_ID=22278

and then have the gall to call themselves a "top dog". those two jerseys never would've sold on ebay, yet on AMI they sold for a decent amount. why is that?

"Other collectors are leery of A-Rod gloves. The All-Star infielder has long favored the Rawlings Pro-6HF model, a tan mitt with an H-shaped web, but other models have flooded the market, raising eyebrows. ASI consigns some of its memorabilia to American Memorabilia.com, and earlier this month, the auction house sold a Rawlings Pro-AR3, autographed and signed "game-used" by Rodriguez, for $7,200. American Memorabilia advertised the mitt as A-Rod's "first game-used glove as a Yankee," but sophisticated collectors suspect Rodriguez may simply have used it for a few innings in spring training, then passed it on to his reps.
"That's just manufacturing memorabilia," says glove expert Dennis Esken. "Game-used means it was used in a Major League game. It doesn't mean A-Rod played catch with it." American Memorabilia president Victor Moreno said he did not know when Rodriguez used the glove, or how long he used it. "I'm not going to question A-Rod," he says. http://www.americanmemorabilia.com/A...uction_ID=6602 "

you have to wonder why a full-time sales outfit like ASI would dump its stuff into AMI and pay a 15% fee. that is, why can't ASI realize the same prices as AMI? for some reason, buyers aren't willing to pay as much when ASI is selling its stuff directly on ebay as they are when it's on AMI. it doesn't make any sense, does it david? moreno's clearly clueless when it comes to this stuff so what exactly are AMI customers truly paying for?

i guess i don't really see much of a difference from the scamsters on ebay and those at many auction houses, except that the latter charge more for pulling the same BS.

rudy.

[otismalibu]

Why do people bid thru eBay's Live Auctions when they can simply call the auction house and bid that way, saving themselves the extra eBay added hammer fees?

Maybe it's too much work to register. Maybe it's too much work to research an item.

Would someone start this orange for me?

[33bird]

Mastro's, Wow! That makes me curious. I've won a few items from them in the past, and both times it was bid right up to my max bid amounts and I won them. I thought it was strange, but figured that only happened on ebay. Should have known better.
Greg

[David]

Kingjammy, I agree with many of your specific points. I've seen issues with many of the big auction houses, including suspect bidding, and I agree there are many high quality individual sellers on eBay.

I just believe that there are many wealthy people who are not knowledgeable about sports memorabilia but want to invest in the area. Rather than wading into eBay, they pick the big auction houses. Reasons they pick the big auctions may houses include selection of high priced material, safe 'escrot' for their money and that the auctions are well known. Their infusion of big money can account for some of the higher prices.