Increasingly, auction houses selling via online portals like Proxibid are facing the three “C”s of Proxiblog: consignments, coins and competition.
- CONSIGNMENTS. To attract continuing customers, auctioneers have to attract worthy consignments. Some houses charge consignors 15% on the hammer price. Others charge as little as 5% or, like Leonard Auction, nothing at all for high-price coins, letting the coins speak for themselves.
- COINS. Once the house procures the coins, the next step is how they will describe and depict them. Here the advantage goes to houses that also are coin dealers, such as Silvertowne, with partner Rick Howard as a top numismatist and auctioneer. Howard does coin business through his shop in Leipsic, Ohio. Silvertowne’s descriptions of coins are reliable, as are ones by Weaver Auction, which has been selling coins for 16 years. They will identify weaknesses such as dipping, cleaning, and even possible alterations. They always provide clear photos of coins to back up their claims.
Conventional Practice: Houses that use the Proxibid boilerplate about sales being final–or that claim consignors wrote the descriptions–will be at a disadvantage over time as buyers come to patronize knowledgeable auctioneers.
Competitive Practice: If you are going to sell coins, you need to know about them, because federal law requires that you do. Coins are often exempt from taxes. Replicas may violate the U.S. Hobby Protection Act. You owe it to your business to learn more about numismatics or to engage the services of experts who do. Otherwise, over time, buyers will seek wares elsewhere.
- COMPETITION. Because of U.S. debt and the uncertain economy, many houses realize the profit to be made by selling coins. The down economy is expected to last for the long term. That means more houses will be signing up on Proxibid, giving longtime clients a run for their money–literally.
Conventional Practice: Too many auctioneers have become complaisant with how they do business, unaware of the emerging competition and unwilling to try new approaches. They complain about Proxibid fees without assessing their own, which include fees from consignors as well as onsite and online buyers.
Competitive Practice: Auctioneers who own real rather than online houses again have the advantage. They can charge the onsite audience buyers’ fees, solicit telephone bids for more fees and charge 15% or lower to online clients–in addition to charging consignors. That’s the caliber of competition emerging now on Proxibid. Several auctioneers are also Internet savvy, soliciting buyers with Facebook and Twitter accounts.
Conventional Practice: Consignors routinely contact auctioneers who sell successfully on Proxibid, asking if they will handle their wares (especially Honor Roll houses as profiled on Proxiblog). Other times, auctioneers attend estate auctions themselves or purchase from coin shows.
Competitive Practice: Auctioneers without real houses–places of business where customers routinely bring coins–will have a harder time competing. They’ll have to devise policies that attract consignments while bidding themselves on coins everywhere from estate auctions to eBay and Proxibid itself.
If you disagree with the above analysis, factor this. Teletrade, one of top two auction houses in the business–so large that it does not need a Proxibid as it boasts 100,000-plus registered buyers–has been conducting no-reserve, 0% buyer fee auctions every Tuesday. Buyers don’t have to worry about counterfeit, altered or problem coins. They don’t have to take risks due to poor photography. The coins already are slabbed by top grading companies. And though the competition for coins every Tuesday is intense, often sales are lower than on Proxibid auctions … without the risk, harsh policies and non-competitive practices.
Proxiblog was created to maintain a healthy competition that helps the hobby. Days of business as usual have ended. Some auction houses now on Proxibid will not be there in a year unless they adopt proactive policies and deal with the competition by maintaining minimum standards, as outlined here.