Our first installment in the series on reserves analyzed the pros and cons of reserves. A second post looked at the issue of hidden reserves from the bidders’ perspective. This post looks at a Proxibid auction house’s reserve policy, and our final post speculates whether reserve policies should be included in terms of service.
One of our top-ranked coin auction houses, RJ’s, recently sent us a news release explaining reserve policies, one of Proxiblog’s main concerns during the past year. Some reserves are set with opening bids. Some are hidden. And some are ghost-bid by auction companies that allow maximum-bid viewing.
Reserves come with risks to the auction company. That is what this series of posts is about.
As we always recommend, RJ’s makes clear that sellers must pay for reserves. Nothing can be more discouraging to bidders than winning a lot only to learn that the auctioneer has passed on the coin.
Some auction companies, like RJ’s, have set policies on reserves. Here is RJ’s as shared by Richard H. Garvin, Manager and Senior Auctioneer:
Reserves will be allowed on any item under the following condition. The number of lots with reserves will be restricted to twenty percent of the total number of lots in your consignment (no exceptions). Please note that if you place a reserve on a lot there will be a seven-dollar ($7.00) “Marketing Fee” per lot that does not sell or sells at your reserve.
We like the policy on limiting the number of reserves to 20% of the consignment because it assures that the majority of lots have the potential to spark bidder competition and inspire return customers. We think the $7 fee is lenient and recommend that reserve-buybacks be the same percentage as Internet buyers’ fees, or 15% in RJ’s case.
We understand that policies like the one we suggest above might discourage consignments. But in those cases, auctioneers can compensate by lowering consignment fees to less than 10% in a tiered system based on the total of sales in any auctions. We know many top-ranked Proxibid auctions that feature tiered systems of 5-8% and a few that even waive seller fees for premium coins.
RJ’s tiered system is as follows: Commission rates for selling coins and related items (non-gold, non-platinum) are $1 up to and including $400, 10%; $400.01-$600, 9%; $600.01 and up, 8%. Gold, platinum and bullion coins have a 4% commission fee.
The policies seem to be working.
RJ’s Auction remains one of the top houses as evidenced by these statistics:
We recently completed our July Coin and Currency Auction. … We had 27 registered bidders that came to our auction facility and another 116 bidders that registered with Proxibid – our on-line Internet hosting partner since October 2008. Of the 301 lots consigned 299 of them sold during the auction. The remaining 2 lots were sold later that night to an on-site buyer. [S]ince January of this year 43.99 % of the lots sold have sold online and 37.1% of the total dollar volume sold has sold online.
Stats like this only underscore RJ’s Auction’s commitment to the online as well as onsite audience. Its next Proxibid auction is slated for Friday, August 17, 2012.
Proxiblog is an independent entity with no connection to the auction portal Proxibid. Our intent is to uphold basic numismatic standards as established by the American Numismatic Association and the National Auctioneer Association and to ensure a pleasurable bidding experience not only on Proxibid but also on similar portals such as iCollector and AuctionZip.