Discussion - Member to Member Sales - Research Center
Discussion - Member to Member Sales - Research Center
Okay, I still have a problem with that in that when an auction house has a sale and the stamps sell for $2 million, that would mean that the auctioneer gets $300,000 (based on a 15% buyer's premium), and the house gets $600,000 (based on a 30% commission). There's no way that the auctioneer is getting paid $300,000, so this is just added profit for the auction house. Isn't the auctioneer often an employee of the auction house? If the auctioneer truly gets that kind of payment, then I am changing jobs. I only need to work one auction a year to live quite nicely. I have never liked the buyer's premium, and I (except for one time) do not buy at auctions where a buyer's fee is charged.
The other problem I have with the buyer's fee is that the fee is added to the total selling price of the stamp (for catalog purposes). If a stamp sells for $10,000, at 15%, the stamp is reported to have sold for $11,500. I think this practice is wrong. The stamp sold for $10,000, not $11,500. The $1,500 buyer's fee is a fee just like the exorbitant shipping and handling fees some of these houses charge to get even more money out of the buyers.
I do think that this has become a big rip off scheme that collectors have allowed the auction houses to get away with, just like the grading of common minimal valued stamps that some expertizing services do.
I understand that auction houses are where the top-notch and rarest stamps appear, but collectors complain when someone sells a 25 cent stamps for 20 cents. Why no outcry over this?
What are your thoughts on this?
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Well I always wondered what the buyers premium was supposed to cover. Now that I know, I like it even less. Have never bought anything at an auction big enough to have extra fees like this, but it just seems like "they get you coming and going". I'll never be spending a million bucks but maybe those that can don't even notice the add on fees.....
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My wife won something from Regency Auctions long ago..and they still send this 3 1/2 pound auction catalog..somebody has to pay for that...i get a laugh out of their prices... a hundred dollar estimate on a cover i paid 8.00 for...and yet they are still in business..so somebody must be buying !!!
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07:17:15pm
I have often noticed the vastly overly optimistic "estimates" provided by auction houses. One on-line auction that I occasionally use seldom realizes anywhere near 30% of these estimates.
Therefore unless a lot is one of the few that routinely sell at or near the estimates i start with a bid at 25%, and on occasion I win the lot. I guess they hope that someone less careful will make the higher bid and they will receive a windfall.
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I find catalogue values useful for stamp trades.
Auction prices? I'm not a high-roller (outbid on over 50% of my Stamporama bids) but, occasionally,
the stamps I want are not available elsewhere.
Agreed, auction add-ons are pricey and I do what I can by my irreducible minimum participation.
John Derry
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The one item I got at an auction was a $200 set. I knew that I had a 20% buyer's fee to pay, that made it $240. Then, and this was not mentioned, I had to pay $30 for shipping and handling making the total cost $270. I called them up and blasted them for it (same auction house someone else mentioned in this thread). Total rip off. Never again have I purchased anything at an auction with fees for buyers. Never will again either.
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Michael, I had the same thing happen to me with an auction house; I saw a set of stamps that was reasonably priced to start, even with the buyer's premium. I bid, and won it! I was happy ... until I got the shipping fee AND an insurance fee! Interestingly, at some point months later I got an email saying that if there were items I no longer wanted from that lot, to contact them to resell it for me! Ha! So let's say I wanted to sell part of it and went through them, so I'd pay a 30% or higher seller's commission on that lot I already paid them a buyer's premium for? Yeah, and throw in some ocean front property in Arizona, as the song goes.
Peter
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We could also talk about the difference between truly rare and valuable stamps and those stamps for which there is simply a high demand.
I am always seeing US White Plains minisheets for sale. The same goes for the Zeppelin stamps, Columbian stamps, etc. These are not particularly rare, and can be found in most auctions. I really see these as high-demand items rather than rare items.
On the other hand, when I see an auction and I look for a few stamps I have been looking for for years, I never see them. For me, there is little challenge in paying big bucks for a high-demand item. There are a few dozen stamps cataloging at $25 or less that are proving impossible to find. I can be patient.
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I agree with smauggie. There is no point looking to an auction house for expensive items that are plentiful (e.g. Zeps). That would likely be a waste of money. However, there are a few rarities that I rarely see available anywhere. Three examples would be the three main stamps missing from my collection:
356 10c Washington 3rd Bureau coil single MH w/ cert
O69 $5 State Department Official (MNG)
070 $10 State Department Official (MNG)
It's easy to find a MNH coil line pair of 356 for a BUY-IT-NOW price of $5000+, or a single without a cert that was in "grandpa's collection" - aka fake. A certified MH 356 with a cert is a rarity (in my world). For me there is no difference between these two scenarios for identical stamps:
Auction house: $800 winning bid + $240 buyer's fee + $60 shipping and insurance = $1100
Online auction: $1100 winning bid - free shipping and insurance
If the price is competitive, I will participate. If not, I will go elsewhere.
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"Lars said: If the price is competitive, I will participate. If not, I will go elsewhere. "
That is the bottom line. Buyers who do not factor in the premium, insurance, and shipping into their bid really have no basis to complain once the transaction is complete. So actually, I have no problem with the auction houses listing whatever they want at however they price them, as it is the market (buyers) who will decide what is reasonable.
However as I read his original post, Michael numbers appears to bring up a related point: That when the major auction houses report the price of sold item to include all the extra fees, this will inflate the value of that stamp as reported by the major catalogues. It is also arbitrary because each auction house uses different rules for their buyers' premium, insurance, and shipping. Am I correct Michael?
Peter
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"However as I read his original post, Michael numbers appears to bring up a related point: That when the major auction houses report the price of sold item to include all the extra fees, this will inflate the value of that stamp as reported by the major catalogues. It is also arbitrary because each auction house uses different rules for their buyers' premium, insurance, and shipping. Am I correct Michael?"
Yes, that is one of my points. The latest issue of Linns has an article on an auction and does just that. In my opinion, fees are just that, fees, like the shipping and handling fee, and should not be made a part on the hammer price for the stamp.
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I bid occasionally at big stamp auction houses for items I want and have not found anywhere else, I've actually bid more than catalog a few times because I wanted to fill a hole in my book, the 15-20% surcharge is just a fee to stay in business. My connection here is the Stamporama auction. If you add up the time required to scan, research, and insert into the Stamporama auction then a few pennies needs to be added to the open bid price to cover your time to present it into the auction. To me there is no such thing as a penny stamp, yes most are not worth a penny but puttin them in the auction is a time consumming project and worthy of some compencence. If the catalog value says is 40 cents and you spend 15 minutes preparing it for auction then asking 20 cents for the item does not seem unrealistic. The potential buyer will let you know if their willing to pay.
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I have to disagree, Michael. The CV should be based on the TOTAL PRICE paid by the buyer. The only exception could be taxes if only residents of one state has to pay them. I don't care if it's eBay fees, PayPal fees, auction fees, shipping, handling, insurance - whatever. I also don't care if the money comes from the buyer or out of the seller's funds. The only number that matters is the TOTAL amount the buyer is willing to pay. CV is an estimate of RETAIL price and should be based on the TOTAL PRICE paid by the buyer.
From Scott: "The Scott Catalog value is a retail vale; that is, an amount you could expect to pay for a stamp in the grade of Very Fine with no faults."
Lars
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All right, I see your point. However, for argument's sake, if you buy a $200 stamp at auction, you'll pay $200, plus $35 buyer fee, plus $25 shipping and handling, for $260. If I buy the same stamp in a dealer's shop, I pay $200. What is your catalog/retail value that you publish if you were issuing a catalog?
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I look forward to Lars' answer but IMHO Michael, it would be $230 (the average of all prices I have on hand; in this case, two of them). Supposedly, the dealer's store price includes a mark up that accommodates handling, expenses, etc.; just good business practice. The auction house does not build these into the price since the asking price is (relatively) low so they build it in at the end. As someone pointed out, for the buyer it is really up to them what they consider a bargain; for the catalogue makers, it would be too hard to separate out "business costs" from the final price.
Peter
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i'm with Lars on this one, because that IS the cost, and that cost is understood going in. Things like taxes and shipping can easily be dependent upon other factors, but house's fee is a constant at that house.
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My answer is the same as Peter's: $230. That, of course, assumes they were BOTH in the grade of VF. I could see an argument to not include shipping fees, especially if there is a shipping discount for multiple items, so then CV would be $217.50, but I like CV to represent the TOTAL of what I would expect to pay before taxes (which are generally zero until I file my State tax return and report my untaxed purchases). If S+H is ALWAYS $25 for each item purchased, I would include it in the CV.
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Yes, my hypothetical example presumed that all things were equal with the condition of the stamp.
I think that's fair, and I can accept that if it is consistent how the catalogs arrive at the "retail" value of a stamp.
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"... for argument's sake, if you buy a $200 stamp at auction, you'll pay $200, plus $35 buyer fee, plus $25 shipping and handling, for $260. If I buy the same stamp in a dealer's shop, I pay $200. What is your catalog/retail value that you publish if you were issuing a catalog?"
Michael,
This is a chicken and egg problem. In an ideal world, with Scott editors annually adjusting prices based on actual transaction data: If the stamps regularly sells for a total price of $260 (bid+fees+commissions), the catalog value should be $260, not $200. On the other hand, if the stamp truly is worth $200, buyers will bid no more than $140 to get to a total cost of $200 (including fees etc.) -- otherwise they'd rather buy from the dealer.
Economics is a weak spot, but your questions roughly translates into: There is a gas station selling gas at $3.80 (stamp from auction house at total cost of $260), but there is another gas station that sells gas at $3.50 (stamp from dealer at $200). What is the price of gas? -- The answer is, $3.50. It is unlikely that someone will pay $3.80 per gallon if gas can be had at $3.50. In other words, if a dealer sells the stamp for $200, nobody will pay $260 to get the same stamp from an auction house.
Obviously, the market for stamps is scattered (geographically etc.), opaque (due to the impact of condition), and lacks liquidity. It is the nature of collecting that stamps are stashed away in collections, and will not be available on the market again until decades later. With these constraints, the catalog price should reflect the average price of a number of sales, excluding outliers (the lucky ebay purchase; the fluke underbid, that should have never gone through; or two competitors bidding each other up for no reason other than "winning").
Arno
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Here is why the buyers premium was initiated quite a few years ago: It used to be standard practice, to charge consignors 10%,on sold items in Public Auctions. Auction houses felt this was not enough profit for them, so they were going to raise that fee, to let's say 15-20%. But after thinking about it , they were afraid to raise the selling fees, becuase they felt that there would be less material consigned to them.They started with a 10% - 10% policy , with buyer & seller equally. They then started to increase the buyer's fees, to now they are, about 12-20% depending on House. I believe, that most still charge only 10% seller's fees,but perhap's I may be wrong about that.Ted.
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Michael,
I understand the point you are making, but for stamps that are expensive but plentiful, there is going to be lot of variability. I've seen auctions close for way below what it should and all the bidders have thousands of feedback so the only bidders were dealers. The closing price was really the wholesale price. Then you get two goofballs with feedback of 10 getting into a bidding war.
For true rarities where there are limited auction results, I think the buyers will usually be a bit more sophisticated, but there is always the chance of only one interested collector or two people in a bidding war. I think you will see more of that than buyers who don't factor in the premium and other fees.
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06:24:29pm
" .... It is unlikely that someone will pay $3.80 per gallon if gas can be had at $3.50. ...."
During the 1970s I operated a Shell Servicenter and there were times when people would drive across town to the Hess station because they were selling a gallon for "29 9/10¢" while I and the Texaco dealer were selling at "30.9/10¢" per gallon
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Mdroth,
If you re-read Michael's original post you will see that point two is about how auction fees affect CV. CV is based on a specific grade so results of auctions at other grades may be factored in if adjusted accordingly. My point is that the variability caused by auction house fees versus brick and mortar sales versus online sales is likely to be smaller than the variability caused when there is only one, or zero, retail buyers. That's why a comparison to a fungible commodity like gasoline doesn't hold up.
Let's go back to Michael's example and say CV is $230 for the sake of argument. If a seller lists that item with a 99 cent start and there are multiple RETAIL buyers out there, you might expect it to close at 75% or more of CV. If only dealers are bidding on it, you would expect it to close at 50% or less of CV. When I buy, I want to be the only non-dealer bidding and get it for 51% of CV. Of course, all these numbers are gross simplifications, but there are many transactions that are not true retail transactions and may artificially DEFLATE CV a bit. But that's OK. It's indicative of more supply than retail demand.
CV works fairly well for me since I know at about what % of CV is a good deal. For anything with a CV of $50 or more, I track auctions for several weeks to see what the item typically goes for. I'm always tracking the next target group while I'm bidding on the ones previously tracked.
Cheers!
Lars
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03:26:09pm
Stamp auction houses charge buyers various percentages to the sale price of an auction lot as a "buyer's premium". These can range from 10%, climbing up to 30% or more now. I once discussed this with a large auction house, and I was told that the buyer's premium was used to pay for the auctioneer. The commission that they charge the consignee (which can run up to 40% or more) was used to pay for the auction house expenses and profit for the house.
Okay, I still have a problem with that in that when an auction house has a sale and the stamps sell for $2 million, that would mean that the auctioneer gets $300,000 (based on a 15% buyer's premium), and the house gets $600,000 (based on a 30% commission). There's no way that the auctioneer is getting paid $300,000, so this is just added profit for the auction house. Isn't the auctioneer often an employee of the auction house? If the auctioneer truly gets that kind of payment, then I am changing jobs. I only need to work one auction a year to live quite nicely. I have never liked the buyer's premium, and I (except for one time) do not buy at auctions where a buyer's fee is charged.
The other problem I have with the buyer's fee is that the fee is added to the total selling price of the stamp (for catalog purposes). If a stamp sells for $10,000, at 15%, the stamp is reported to have sold for $11,500. I think this practice is wrong. The stamp sold for $10,000, not $11,500. The $1,500 buyer's fee is a fee just like the exorbitant shipping and handling fees some of these houses charge to get even more money out of the buyers.
I do think that this has become a big rip off scheme that collectors have allowed the auction houses to get away with, just like the grading of common minimal valued stamps that some expertizing services do.
I understand that auction houses are where the top-notch and rarest stamps appear, but collectors complain when someone sells a 25 cent stamps for 20 cents. Why no outcry over this?
What are your thoughts on this?
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re: Auction Prices
Well I always wondered what the buyers premium was supposed to cover. Now that I know, I like it even less. Have never bought anything at an auction big enough to have extra fees like this, but it just seems like "they get you coming and going". I'll never be spending a million bucks but maybe those that can don't even notice the add on fees.....
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re: Auction Prices
My wife won something from Regency Auctions long ago..and they still send this 3 1/2 pound auction catalog..somebody has to pay for that...i get a laugh out of their prices... a hundred dollar estimate on a cover i paid 8.00 for...and yet they are still in business..so somebody must be buying !!!
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Silence in the face of adversity is the father of complicity and collusion, the first cousins of conspiracy..
20 Jul 2013
07:17:15pm
re: Auction Prices
I have often noticed the vastly overly optimistic "estimates" provided by auction houses. One on-line auction that I occasionally use seldom realizes anywhere near 30% of these estimates.
Therefore unless a lot is one of the few that routinely sell at or near the estimates i start with a bid at 25%, and on occasion I win the lot. I guess they hope that someone less careful will make the higher bid and they will receive a windfall.
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The past is a foreign country, they do things different there.
20 Jul 2013
10:47:44pm
re: Auction Prices
I find catalogue values useful for stamp trades.
Auction prices? I'm not a high-roller (outbid on over 50% of my Stamporama bids) but, occasionally,
the stamps I want are not available elsewhere.
Agreed, auction add-ons are pricey and I do what I can by my irreducible minimum participation.
John Derry
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03:29:15am
re: Auction Prices
The one item I got at an auction was a $200 set. I knew that I had a 20% buyer's fee to pay, that made it $240. Then, and this was not mentioned, I had to pay $30 for shipping and handling making the total cost $270. I called them up and blasted them for it (same auction house someone else mentioned in this thread). Total rip off. Never again have I purchased anything at an auction with fees for buyers. Never will again either.
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06:08:02am
re: Auction Prices
Michael, I had the same thing happen to me with an auction house; I saw a set of stamps that was reasonably priced to start, even with the buyer's premium. I bid, and won it! I was happy ... until I got the shipping fee AND an insurance fee! Interestingly, at some point months later I got an email saying that if there were items I no longer wanted from that lot, to contact them to resell it for me! Ha! So let's say I wanted to sell part of it and went through them, so I'd pay a 30% or higher seller's commission on that lot I already paid them a buyer's premium for? Yeah, and throw in some ocean front property in Arizona, as the song goes.
Peter
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re: Auction Prices
We could also talk about the difference between truly rare and valuable stamps and those stamps for which there is simply a high demand.
I am always seeing US White Plains minisheets for sale. The same goes for the Zeppelin stamps, Columbian stamps, etc. These are not particularly rare, and can be found in most auctions. I really see these as high-demand items rather than rare items.
On the other hand, when I see an auction and I look for a few stamps I have been looking for for years, I never see them. For me, there is little challenge in paying big bucks for a high-demand item. There are a few dozen stamps cataloging at $25 or less that are proving impossible to find. I can be patient.
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re: Auction Prices
I agree with smauggie. There is no point looking to an auction house for expensive items that are plentiful (e.g. Zeps). That would likely be a waste of money. However, there are a few rarities that I rarely see available anywhere. Three examples would be the three main stamps missing from my collection:
356 10c Washington 3rd Bureau coil single MH w/ cert
O69 $5 State Department Official (MNG)
070 $10 State Department Official (MNG)
It's easy to find a MNH coil line pair of 356 for a BUY-IT-NOW price of $5000+, or a single without a cert that was in "grandpa's collection" - aka fake. A certified MH 356 with a cert is a rarity (in my world). For me there is no difference between these two scenarios for identical stamps:
Auction house: $800 winning bid + $240 buyer's fee + $60 shipping and insurance = $1100
Online auction: $1100 winning bid - free shipping and insurance
If the price is competitive, I will participate. If not, I will go elsewhere.
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07:51:21am
re: Auction Prices
"Lars said: If the price is competitive, I will participate. If not, I will go elsewhere. "
That is the bottom line. Buyers who do not factor in the premium, insurance, and shipping into their bid really have no basis to complain once the transaction is complete. So actually, I have no problem with the auction houses listing whatever they want at however they price them, as it is the market (buyers) who will decide what is reasonable.
However as I read his original post, Michael numbers appears to bring up a related point: That when the major auction houses report the price of sold item to include all the extra fees, this will inflate the value of that stamp as reported by the major catalogues. It is also arbitrary because each auction house uses different rules for their buyers' premium, insurance, and shipping. Am I correct Michael?
Peter
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09:22:32am
re: Auction Prices
"However as I read his original post, Michael numbers appears to bring up a related point: That when the major auction houses report the price of sold item to include all the extra fees, this will inflate the value of that stamp as reported by the major catalogues. It is also arbitrary because each auction house uses different rules for their buyers' premium, insurance, and shipping. Am I correct Michael?"
Yes, that is one of my points. The latest issue of Linns has an article on an auction and does just that. In my opinion, fees are just that, fees, like the shipping and handling fee, and should not be made a part on the hammer price for the stamp.
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re: Auction Prices
I bid occasionally at big stamp auction houses for items I want and have not found anywhere else, I've actually bid more than catalog a few times because I wanted to fill a hole in my book, the 15-20% surcharge is just a fee to stay in business. My connection here is the Stamporama auction. If you add up the time required to scan, research, and insert into the Stamporama auction then a few pennies needs to be added to the open bid price to cover your time to present it into the auction. To me there is no such thing as a penny stamp, yes most are not worth a penny but puttin them in the auction is a time consumming project and worthy of some compencence. If the catalog value says is 40 cents and you spend 15 minutes preparing it for auction then asking 20 cents for the item does not seem unrealistic. The potential buyer will let you know if their willing to pay.
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re: Auction Prices
I have to disagree, Michael. The CV should be based on the TOTAL PRICE paid by the buyer. The only exception could be taxes if only residents of one state has to pay them. I don't care if it's eBay fees, PayPal fees, auction fees, shipping, handling, insurance - whatever. I also don't care if the money comes from the buyer or out of the seller's funds. The only number that matters is the TOTAL amount the buyer is willing to pay. CV is an estimate of RETAIL price and should be based on the TOTAL PRICE paid by the buyer.
From Scott: "The Scott Catalog value is a retail vale; that is, an amount you could expect to pay for a stamp in the grade of Very Fine with no faults."
Lars
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02:32:24am
re: Auction Prices
All right, I see your point. However, for argument's sake, if you buy a $200 stamp at auction, you'll pay $200, plus $35 buyer fee, plus $25 shipping and handling, for $260. If I buy the same stamp in a dealer's shop, I pay $200. What is your catalog/retail value that you publish if you were issuing a catalog?
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07:43:13am
re: Auction Prices
I look forward to Lars' answer but IMHO Michael, it would be $230 (the average of all prices I have on hand; in this case, two of them). Supposedly, the dealer's store price includes a mark up that accommodates handling, expenses, etc.; just good business practice. The auction house does not build these into the price since the asking price is (relatively) low so they build it in at the end. As someone pointed out, for the buyer it is really up to them what they consider a bargain; for the catalogue makers, it would be too hard to separate out "business costs" from the final price.
Peter
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Auctions
re: Auction Prices
i'm with Lars on this one, because that IS the cost, and that cost is understood going in. Things like taxes and shipping can easily be dependent upon other factors, but house's fee is a constant at that house.
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re: Auction Prices
My answer is the same as Peter's: $230. That, of course, assumes they were BOTH in the grade of VF. I could see an argument to not include shipping fees, especially if there is a shipping discount for multiple items, so then CV would be $217.50, but I like CV to represent the TOTAL of what I would expect to pay before taxes (which are generally zero until I file my State tax return and report my untaxed purchases). If S+H is ALWAYS $25 for each item purchased, I would include it in the CV.
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01:07:39pm
re: Auction Prices
Yes, my hypothetical example presumed that all things were equal with the condition of the stamp.
I think that's fair, and I can accept that if it is consistent how the catalogs arrive at the "retail" value of a stamp.
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re: Auction Prices
"... for argument's sake, if you buy a $200 stamp at auction, you'll pay $200, plus $35 buyer fee, plus $25 shipping and handling, for $260. If I buy the same stamp in a dealer's shop, I pay $200. What is your catalog/retail value that you publish if you were issuing a catalog?"
Michael,
This is a chicken and egg problem. In an ideal world, with Scott editors annually adjusting prices based on actual transaction data: If the stamps regularly sells for a total price of $260 (bid+fees+commissions), the catalog value should be $260, not $200. On the other hand, if the stamp truly is worth $200, buyers will bid no more than $140 to get to a total cost of $200 (including fees etc.) -- otherwise they'd rather buy from the dealer.
Economics is a weak spot, but your questions roughly translates into: There is a gas station selling gas at $3.80 (stamp from auction house at total cost of $260), but there is another gas station that sells gas at $3.50 (stamp from dealer at $200). What is the price of gas? -- The answer is, $3.50. It is unlikely that someone will pay $3.80 per gallon if gas can be had at $3.50. In other words, if a dealer sells the stamp for $200, nobody will pay $260 to get the same stamp from an auction house.
Obviously, the market for stamps is scattered (geographically etc.), opaque (due to the impact of condition), and lacks liquidity. It is the nature of collecting that stamps are stashed away in collections, and will not be available on the market again until decades later. With these constraints, the catalog price should reflect the average price of a number of sales, excluding outliers (the lucky ebay purchase; the fluke underbid, that should have never gone through; or two competitors bidding each other up for no reason other than "winning").
Arno
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04:28:23pm
re: Auction Prices
Here is why the buyers premium was initiated quite a few years ago: It used to be standard practice, to charge consignors 10%,on sold items in Public Auctions. Auction houses felt this was not enough profit for them, so they were going to raise that fee, to let's say 15-20%. But after thinking about it , they were afraid to raise the selling fees, becuase they felt that there would be less material consigned to them.They started with a 10% - 10% policy , with buyer & seller equally. They then started to increase the buyer's fees, to now they are, about 12-20% depending on House. I believe, that most still charge only 10% seller's fees,but perhap's I may be wrong about that.Ted.
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re: Auction Prices
Michael,
I understand the point you are making, but for stamps that are expensive but plentiful, there is going to be lot of variability. I've seen auctions close for way below what it should and all the bidders have thousands of feedback so the only bidders were dealers. The closing price was really the wholesale price. Then you get two goofballs with feedback of 10 getting into a bidding war.
For true rarities where there are limited auction results, I think the buyers will usually be a bit more sophisticated, but there is always the chance of only one interested collector or two people in a bidding war. I think you will see more of that than buyers who don't factor in the premium and other fees.
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Silence in the face of adversity is the father of complicity and collusion, the first cousins of conspiracy..
24 Jul 2013
06:24:29pm
re: Auction Prices
" .... It is unlikely that someone will pay $3.80 per gallon if gas can be had at $3.50. ...."
During the 1970s I operated a Shell Servicenter and there were times when people would drive across town to the Hess station because they were selling a gallon for "29 9/10¢" while I and the Texaco dealer were selling at "30.9/10¢" per gallon
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re: Auction Prices
Mdroth,
If you re-read Michael's original post you will see that point two is about how auction fees affect CV. CV is based on a specific grade so results of auctions at other grades may be factored in if adjusted accordingly. My point is that the variability caused by auction house fees versus brick and mortar sales versus online sales is likely to be smaller than the variability caused when there is only one, or zero, retail buyers. That's why a comparison to a fungible commodity like gasoline doesn't hold up.
Let's go back to Michael's example and say CV is $230 for the sake of argument. If a seller lists that item with a 99 cent start and there are multiple RETAIL buyers out there, you might expect it to close at 75% or more of CV. If only dealers are bidding on it, you would expect it to close at 50% or less of CV. When I buy, I want to be the only non-dealer bidding and get it for 51% of CV. Of course, all these numbers are gross simplifications, but there are many transactions that are not true retail transactions and may artificially DEFLATE CV a bit. But that's OK. It's indicative of more supply than retail demand.
CV works fairly well for me since I know at about what % of CV is a good deal. For anything with a CV of $50 or more, I track auctions for several weeks to see what the item typically goes for. I'm always tracking the next target group while I'm bidding on the ones previously tracked.
Cheers!
Lars
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