Tag Archives: Maximum Bids

Auctions that Aren’t

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allthemarbles
Click the above picture to expand

We grow weary with seeing so-called auctions like this on Proxibid. Coins open at or near retail. Buyer’s fee is high. Auctioneer sees maximum bids and can shill bid at will. These aren’t auctions. They’re online coin stores.

This auction company routinely opens at or near retail, charges a higher buyer’s fee, sees maximum bids and can shill bid to raise the price higher. Why are these so-called auctions on Proxibid?

We recommend against bidding with any company that sees maximum bids and allows auctioneering or consignor bidding. There are plenty of real auctions on Proxbid, in which there are no reserves, low opening bids, low buyer’s fee and good shipping. We don’t list any auction that sees maximum bids or allows shill bidding in our top rankings in the right sidebar.

If you want to patronize auctions like the one above, we recommend against Proxibid and for Heritage, Teletrade and Great Collections. They offer superior service, especially shipping. The same coin below sold recently at Heritage very near the above company’s opening bid.

heritagesale

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.

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Should Proxibid Require Reserve Policies in Terms of Service?

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Our first installment in the series below analyzed the pros and cons of reserves. A second post looked at the issue of hidden reserves from the bidders’ perspective, and our third profiled the reserve policy of a top coin auction house. This last post asks Proxibid and our viewers to weigh in on whether reserve policies should be included in terms of service.

Why not? We routinely get news releases from auction houses soliciting us for coins and sharing their reserve policies with us, either informally via email or formally with a contract. Sometimes, as with RJ’s Auction Service, we learn about reserve policies in a news release.

Some reserves are set with opening bids. Those are transparent. In such case, the auction company had better have a consignment policy that charges sellers fees for unsold lots. Otherwise, the auction company stands to lose revenue.

Some reserves are hidden, with minimum bids set as low as $1, even though a reserve may actually be $300. The goal here is to inspire bidding so that bidder competition hits the reserve. In that case, the auction company also should have a consignment form that sets buyback fees or an agreement with sellers that the auction company has a right to sell lots at any price at its discretion.

And a few reserves are ghost-bid by auction companies that allow maximum-bid viewing. Proxibid allows those to engage in the practice, which we discourage, because of transparency notices–showcased in the terms of service, by the way (and for good ethical reason).

Some online auctions set high opening reserves on all except on 5-10% of select lots, luring viewers with bids and then, shortly before the live auction, setting equally high opening reserves, a practice that Proxibid should disallow pursuant to the Unified User Agreement. (See this post.)

A few timed auctions allow maximum-bid viewing–a combination we find suspect, by the way–because Proxibid’s technology should be running the show. Again, this is a practice that Proxibid should ban, even if the auction company believes it is harmless, because it sends a chilling message. Why view bids if your auction is timed? Just wait until it is concluded, and you’ll see how lots sold!

Finally, we understand that the auctioneer’s primary concern is pleasing the consignor. That can be done in a variety of ways, other than ceding your rights to reserve. You can advertise. You can invest in superior photography. You can learn how to write accurate numismatic descriptions. You can advertise in your local newspaper for coins, purchase them, and then offer them in Proxibid auctions, completely bypassing the consignor.

That said, we wonder how our viewers–both auctioneers and bidders–feel about reserve policies being listed in terms of service. Should Proxibid require this? Is it the bidders’ right to know?

We think it is. Proxibid’s brand functions on one word, and one word only: TRUST. Trust requires transparency.

What’s your opinion?

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.

Consignor and maximum-bid policies

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We support new transparency rules by Proxibid, posting notices on auctions that allow consignors and auctioneers to bid on lots and/or permit auctioneers to see maximum bids. These notices helped explain a few past purchases. We also have received emails from bidders asking us to remove those companies from our Honor Rolls. We have decided not to do that because Proxibid transparency notices will succeed over time.

Just as we advocated for 15% or lower online buyers’ fees, we will continue promoting competition in the auctioneer tradition. This post explains our position on consignor bidding and maximum bid viewing.

Overall, it is better for the portal to allow consignor bidding than high reserves because presumably those buyback bids indicate a sale, meaning the auctioneer has to pay Proxibid fees. We applaud Proxibid for setting rules for timed auctions, so that high reserves cost the auction company fees; but the problem never has been timed auctions. The problem has to do with so-called live auctions that in reality are only Internet-based with high reserves week after week in the hope that some newbie bidder will pay over retail. We hope that Proxibid’s control officer will investigate that issue with select houses and put them on notice, the same way the company puts bidders on notice for too many retractions.

That said, allowing consignors and auctioneers to bid up lots is very close to shill bidding, illegal in some states. It also occurs to us that bid retractions also can be related to consignor shill bids, a common occurrence on eBay and other portals.

We caution bidders reading Proxiblog to exercise care with auction houses seeing maximum bids. Some auctions that see those bids do not raise them to maximum on each lot; they sell at Grey Sheet (or wholesale). Some auctions just want to know the maximums so that they also can handle floor bidding. However, a few “bad”-lot auctioneers spoil it for the rest. They routinely jump to the maximum. In as much as Proxibid is supposed to mirror the onsite competition and excitement of an auction, this detracts from the experience. Imagine if auctioneers in a live sale had the superhuman capability to view maximum bids glowing on the foreheads of buyers in the room?

In sum, here is what we advise:

  1. Bidders: Bid cautiously in auctions that allow sellers to bid on lots. Auctioneers: Sell coins to consignors at your normal buyers’ fee percentage and deduct an additional fee on the hammer price in paying funds to sellers who win back their own coins. That should stop shill bidding and also maintain portal fees.
  2. Bidders: Bid conservatively and keep records of your maximum bids to see how many of those you end up paying when you win lots. If you’re paying maximum bids on all lots, consider patronizing other houses. There are plenty of companies whose auctioneers believe in competition. Auctioneers: Keep track of your sales since the new transparency rules have gone up and see if your auction profits are lower. We think you might see a difference in the bottom line in the months ahead as more bidders become aware of questionable practices.
  3. Bidders: Think twice before patronizing auctions that allow both consignor bidding and maximum-bids viewing. Houses with more than 15% buyer’s fee–in addition to high opening bids–that also allow seller-bidding and see maximum lots may be doing themselves a disservice. Auctioneers: Nothing is more important in attracting return bidders as the integrity of the house. Do not short-sell your reputation.

Proxiblog will still keep companies on our Honor Rolls that engage in both questionable practices. We’ll monitor the situation in the months ahead and, of course, listen to our bidders’ and auctioneer views.

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.

Proxibid should conceal maximum bids

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Every now and then we offer constructive criticism, and this post concerns a bidding component that may be under reconsideration, and that is, sharing the maximum bid for a lot when that item appears on the digital block. We’re happy to have learned that Proxibid is working on this problem, which is yet another reason why we support the portal.

We believe that Proxibid is the best auction portal in the business because of the company’s technical expertise coupled with over-the-top customer and sales service. As its redesign indicates, the company’s success has to do largely with making the online auction experience as realistic as the onsite one. It does this with video, sound and nifty bidder windows.

We have had lingering concerns about sharing maximum bids with auctioneers when items come on the block. Not that we do not trust our Honor Roll companies or NAA-member firms; we do, with a few exceptions. We know the temptation to raise bids on lots that will sell below retail.

And we have posted several articles about high reserves and opening bids, such as this one.

Increasingly we have been reading terms of service like this one: The auctioneer may open bidding on any lot by placing a bid on behalf of the consignor. (That’s pretty close to shill-bidding, illegal in some states.)

Other service terms that in recent weeks have appeared more frequently allow the auctioneer to open bids at any level he sees fit.

If the auctioneer knows the maximum bid on a lot, then these service terms legally allow him to automatically raise the bid to the top level for any item.

This is not how auctions operate. Imagine if the onsite auctioneer had super-human powers, able to look at faces in the room and see maximum dollar signs glowing on their foreheads.

We know that Proxibid is aware of these issues and is working on a fix.

If changes are forthcoming, there may be some pushback from auctioneers about not viewing maximum bids. But they should be patient, because a policy like this will eventually mean more bidders for most auction houses within 3-6 months, as word spreads about the even playing field.

There are technological issues, too, in accomplishing this goal. We know the digital challenges but also feel a solution to the maximum-bid issue, which we presented here, will be a win-win-win situation for auctioneer, bidder and Proxibid.

Here’s why: The closer we can get on the Web to mirroring the real auction experience–where nothing is certain, by the way–the more trustworthy online maximum bids will become. That will dramatically increase the number of bidders at any Proxibid auction. It’s tantamount to have 200 rather than 100 bidders in the room in an onsite session.

That means more profit.

Proxibid’s unbridled success has been in mimicking technologically the online auction so that it provides the allure of the onsite one. We are more enthusiastic than ever about the company because it continues to work hard at achieving fairness and generating excitement in the traditional auction experience.

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.

Proxibid’s Maximum Bid Issue

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Of all the terms of service Proxiblog monitors, including those lacking APN clearance or padding shipping costs, the one that concerns us most involves a Proxibid practice of sharing maximum bids when a lot comes on the block. As a matter of quality control, it’s high time Proxibid stopped the practice, and we explain why.

Proxiblog is in the process of bidding on fewer and fewer Proxibid auctions, and advising other bidders in our numismatic circles to do the same, because of issues we regularly bring to light (i.e. lack of APN clearance, poor photography, retail or higher opening bids, excessive buyer’s fees and pricey shipping). Now we’re seeing an ominous term of service that reads something like this: “The auctioneer will open bidding at any level and may set bidding increments as he/she deems necessary.”

Now before auctioneers reading that text react defensively, step back a second and imagine yourself at a live onsite auction in the year 2025. A futuristic technology company has sold you a device that can read bidders’ brain waves, decoding just how much each person in the room is willing to spend on a lot. Numbers flash on the digital handheld screen with a person’s face appearing on the monitor. You see the bidder in the crowd and know just how much he is willing to spend on a 1894 Morgan dollar: $1300.

You open the bid at $1300. Reluctantly, that targeted bidder raises his hand.

SOLD!

The futuristic device has only one drawback: It flashes data of the unlucky bidder only when the lot appears on the block.

If you’re an auctioneer on Proxibid, the future is now because Proxibid posts the maximum bid when a lot comes on the block, meaning the auctioneer with a specific term of service can immediately jump to the maximum rather than proceeding by bid increments as in a typical auction.

We bring this to the attention of auctioneers because, indeed, there is a difference between an online and onsite auction. Technology surveils as much as it sells. And if Proxibid truly wants an even playing field, it needs to stop this practice. Here’s why:

Proxibid has done much by way of bidder security even to the extent of no longer showing who won what coin as soon as a lot sells. The portal also doesn’t share credit card data with auctioneers to protect the bidder. We applaud that but question why it still allows this unseemly practice that gives the auctioneer every advantage in addition to excessive terms of service that everyone needs to read before bidding a dime.

It is time for the online portal to end the practice of sharing maximum bids. In the meantime, Proxiblog will monitor our maximum and winning bids and cease doing business with those houses that sell (purportedly coincidentally) only at our maximum bids. We advise other bidders to do the same.

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.