This year Teletrade announced changes in its auction offerings, including zero fees for qualified consignments, with no buybacks or listing charges, either. Other changes include only one (rather than three auctions per week) and the end of the popular 0% no-reserve Tuesday auctions. The format now includes sellers’ determining maximum bids at 60% or 80% of their estimated values, or allowing Teletrade to set the maximums. Once set, those maximum’s come online immediately (i.e. no hidden reserves). In addition, Teletrade raised buyer’s premiums to the “industry standard” of 17.5% That standard was put into place last year in announcement by Heritage Auctions and Stacks Bowers Galleries, which raised their buyer’s premiums from 15% to 17.5%
Proxiblog decided to interview Ian Russell at GreatCollections to see if his auction house also planned to raise its buyer’s fees and change its fee structures. Before launching his own company, Russell was president of Teletrade, now a competitor. We also thought Proxibid auctioneers might be interested in the continuing debate about buyer and seller fees.
PROXIBLOG: Stacks Bowers Galleries, then Heritage and now Teletrade have announced buyer’s fees of 17.5%. You’re holding fast to 10%. Will this give you an edge competitively?
Russell: Yes – I think we continue to hold a competitive edge, because our fees are lower and our service is fast. From the fee standpoint, this means a bidder can bid an extra bid or win a coin for a bid level less. And with lower fees, the consignor realizes more money. It’s truly the best of both worlds. Another advantage, competitively, is that we don’t have long drawn out deadlines or offer teaser rates for certain consignments if you jump through hoops. We make the process simple and easy, so everyone can consign to our coin auctions whether they have $250 worth of coins or a collection valued at $250,000+.
PROXIBLOG: How does the low BP of 10% help the hobbyist who really is just looking for coins rather than making an investment?
Russell: I think collectors are put off by high fees. They want to bid in an auction because they want the security and trust aspect that full service auction houses offer like GreatCollections, but they don’t want to pay 18% on the buy side and then up to 10% on the sell side as well. Even larger buyers and dealers benefit by lower buyer’s fees.
PROXIBLOG: You often have made comments about serving the hobbyist as well as the investor. What is your philosophy of that now and how, if at all, does it tie in to your policies at GreatCollections?
Russell: Collectors are certainly our focus, even though we obviously have dealers participating both selling and buying through GreatCollections. We offer a wide variety of coins of all price ranges, which is the perfect mix for attracting collectors to bid in our auctions. This week we literally have a $150,000 rare $4 gold coin alongside plenty of lower grade $40 Morgan dollars. The $4 “Stella” is going to set the record for a single coin auction at GreatCollections.
PROXIBLOG: You also are striking deals with slabbing companies. You recently had a promotion about that. Do you plan to do this again in as much as fees at PCGS have increased and are expected to at NGC?
Russell: We offer discounted grading all year round, saving consignors 40-50% (plus return shipping costs!) and we also offer advice for which grading service is best. Despite the increase at PCGS, we have not increased our discounted grading rates (although we will likely pass on part of the increase in the future). We routinely lose money (or break even) grading coins for clients, we obviously do it to help clients with the grading process so we can auction their coins. In December 2012 alone, we have submitted several million dollars’ worth of uncertified coins to PCGS and NGC – coins that will be featured in upcoming GreatCollections auctions. The $4 Stella that we’re auctioning at the moment (bidding is currently up to $136,000) we graded for a client at the recent Las Vegas PCGS Invitational.
PROXIBLOG: You also have low consignor fees. Has that been attracting more coins in the past six months?
Russell: Yes – we’re offering the best of both worlds with fees – the absolute lowest buyer’s fees, coupled with either a small or zero seller’s fees. Our consignment process is simple – no games – no fine print (except our standard terms, I guess) – no hoops to jump through. Our listings have definitely increased at a fast pace – we routinely have more than 7,500 coins listed. As personal goal is to have this number above 10,000 before the end of 2013.
PROXIBLOG: It seems with low BP for the buyer and low seller fees, the onus then rests upon you as an entrepreneur to get out the word about GreatCollections and drum up competition. Can you tell us about how you market and advertise for coins on your site?
Russell: We’ve put a lot of money into marketing GreatCollections over the past two years – I’d say significantly more than any other auction firm as a percentage of sales. And we’re continuing to do so to further build our client base in 2013. We don’t just advertise in one place – you’ll see us in numismatic publications, coin-related websites, at coin shows etc.
PROXIBLOG: Anything else you would like to say?
Russell: I’m really looking forward to 2013 with numismatics. The U.S. Mint has a busy year, I think the gold and silver market will be strong and we just announced a major anchor consignment called the Amadeus Collection – which contains more than 1,000 U.S. gold coins.