Some interesting auction houses bidding at other auction houses

[kirispupis]

Important note: I'm writing this because I find it interesting. It isn't scandalous, but just something I thought I'd mention.

Recently, while bidding at two separate auctions, I noticed what appeared to be auction houses bidding themselves. I noticed this because at these particular auctions I could see the highest bidder's name.

In one case I bid against a user named "roma_rep". I outbid roma_rep, who did not respond. Someone else won the coin.

In another case I was outbid by "cngcoins". I'd put in my highest possible, so I let it go. Cngcoins was later outbid.

In both cases neither auction house put in a bid that I'd label as high, so I don't see anything wrong with it. There have been ample discussions here about VCoins sellers buying their coins at auction, but I wasn't aware that auction houses too do it.

I guess it makes sense...

[Nerosmyfavorite68]

I find shill bidding to be far more reprehensible. Buying a coin to flip it isn't so bad.

Aaron Berk, in his latest podcast, called out shill bidding at auction but did not name names.

Why don't collectors just boycott the houses known, or strongly suspected, to shill?

It just makes me glad that I've avoided auctions since about 1999.

[Prieure de Sion]

VCoins / MA Shop dealers buying at auctions is completely normal. I don't really see anything critical there either. Where else would they get coins from? Private collectors very rarely come to a (small) dealer to offer coins. They usually go to well-known auction houses and commission parts or complete collections. I have been offered maybe 3-5 coins privately this year. That would never be enough for the shop.

And what you shouldn't forget. I have a lot of customers who don't want to attend auctions! I have customers who say - I'm looking for a Claudius. But I don't have time to watch auctions all the time. I don't want to make complicated payments abroad. I don't want the stress of bidding. I don't want to have to worry about the import. You do that. I know a lot of customers who have order lists with dealers and/or prefer to buy from dealers instead of auctions.

And auction houses also buy from other auction houses for the same reason.  But good coins are also rare to come by.
 
 

What if auction houses bid at their own auctions? I think you have to make a distinction here. And both are difficult to prove. And an assertion can quickly become a false claim.

A private collector delivers coins to the auction. They are to be auctioned off. The auction house is not the owner of the coins! Of course, it can also bid on the consignor's coins if it is interested in buying them! If the auction house says - these are great coins, we would like to have them ourselves, the auction house can bid as an interested party. As long as there is only a REAL BUYING INTEREST, I think this is also legitimate.

And then there are bids without any interest in buying. The auction house only bids itself because it alone is interested in achieving a high price. Because they want the coin to fetch at least X price. Because they want a high price to be achieved for a high commission, etc. If this is the only interest, it is extremely reprehensible and not fair in my view.

I had the latter on Saturday at an auction of a well-known auction house. I had lots of scattered bids across all collecting areas and every time I placed a bid - I was always outbid by the same bidder. Ok. Coincidence? A colleague had other coins in his selection. He was also always outbid by the same bidder. By the same bidder who had outbid me.

And now it has to be said that this one bidder bid on 95% of all the coins on offer in the auction. Until a high price was achieved.

And to rule out chance here. In the previous auction at this auction house, one bidder bid high for all the coins - and "won" a lot of coins. And these "won" coins were in the auction house shop a day later! And also the day before yesterday on Sunday it was again a bidder who drove up (almost) all prices.

That is no coincidence. And it is frustrating. Because this is not a fair auction for interested parties and buyers…

[David Atherton]

6 hours ago, Nerosmyfavorite68 said:

Why don't collectors just boycott the houses known, or strongly suspected, to shill?

Or, why don't collectors boycott auction houses that fabricate provenances in order to hide looted material? But yet, they are amply rewarded for such behavior. 

Shill bidding is probably not going to raise an eyebrow.

[Heliodromus]

I don't see a problem with this as long as the auction house is actually winning lots, not just driving the price up.

I can see it's frustrating for you as a dealer since you also need to buy wholesale, sell retail, although for collectors it's not such an issue since it's better to outbid the auction house's wholesale bid rather than wait to buy the coin marked-up in their shop.

 

 

 

[Roman Collector]

I don't think it's necessarily a sign of something fishy going on if you're always outbid by the same bidder. It's quite possible that you are up against a collector with the same interest. For example, I'd bet that @shanxi says after being outbid on a Faustina II denarius with a scarce hairstyle, "Damn! Got outbid by @Roman Collector again!" just as I often say, "Damn, I got outbid by @shanxi again!!" 😉

[idesofmarch01]

8 hours ago, Prieure de Sion said:

And to rule out chance here. In the previous auction at this auction house, one bidder bid high for all the coins - and "won" a lot of coins. And these "won" coins were in the auction house shop a day later!

For those coins that were won by this bidder, how did the fixed prices in the auction house shop compare with the hammer prices the day before?  Would it be possible to list the hammer price vs. the subsequent retail price for 4 - 5 coins?

If an auction house is bidding on coins at its own or another auction, it indicates (to me) that it thinks the coin(s) might be undervalued and there is a profit to be made at retail.  If I'm bidding on the same coin, this tends to legitimize my interest in the coin and also allows me to adjust my maximum bid to a higher amount, since the auction house likely will need to mark up the hammer price by at least 30% to make a reasonable profit, and I don't need to do this since I don't plan on reselling the coin immediately.  It's true that an auction house won't "pay" a buyer's premium on coins in its own auction, but they're still at a disadvantage since even a 25% buyer's fee is likely less than the retail markup that they plan to add. 

This doesn't mean that, in every instance, an auction house is bidding in good faith for its own retail shop -- it's always possible that they're just trying to drive up the hammer price -- but for legitimate, well-know auction houses that also maintain a retail catalog, I'm encouraged rather than discouraged when they join the bidding for coins that interest me.

[Hesiod]

Roma's handle at Nomos used to be Nibelung. I haven't kept track recently. 

[kirispupis]

11 hours ago, Prieure de Sion said:

VCoins / MA Shop dealers buying at auctions is completely normal. I don't really see anything critical there either. Where else would they get coins from? Private collectors very rarely come to a (small) dealer to offer coins. They usually go to well-known auction houses and commission parts or complete collections. I have been offered maybe 3-5 coins privately this year. That would never be enough for the shop.

I've stated before that I mostly don't have an issue with this. If a coin is going low at auction I can understand a seller recognizing that and turning a profit. However, I do know sellers whose products are mostly bought from old collectors or from group lots split up. What I really have an issue with are the sellers who intentionally push the price points of coins. For example, I was the underbidder on a coin I really wanted not long ago. I bid as high as I could go but I couldn't afford more. My bid was right at market value, but I had to give up. A few months later that coin appeared at Shanna Schmidt, where she doubled the price. The coin isn't worth that much and still sits. I will never ever do business with her after that. Although I never shopped with her before due to her ludicrous prices, she is now on my blacklist of dealers.

So, my advice to VCoins sellers doing this is to be reasonable or you risk alienating buyers like myself.

11 hours ago, Prieure de Sion said:

What if auction houses bid at their own auctions? I think you have to make a distinction here. And both are difficult to prove. And an assertion can quickly become a false claim.

I've covered that in my other post. FWIW, most auction houses put this in writing that they can bid on their own items. What most of us are worried about is what I call "prognostic shill bidding", or shill bidding when you know the buyer's max. That should be illegal, but the data I've gathered to prove/disprove this occurs is inconclusive.

11 hours ago, Prieure de Sion said:

I had the latter on Saturday at an auction of a well-known auction house. I had lots of scattered bids across all collecting areas and every time I placed a bid - I was always outbid by the same bidder. Ok. Coincidence? A colleague had other coins in his selection. He was also always outbid by the same bidder. By the same bidder who had outbid me.

There have been a number of reports of a deep-pocketed individual offering whatever it takes to obtain coins. There was a Nomos auction not long ago where every bid of mine was completely swamped. Every coin but one went for around 10x my max (one went for only 2x). That unfortunately happens. One thing I've realized is that there are people who simply don't care what they pay for a coin. If I go up against such an individual in an auction I'll lose. I try to avoid that where possible by specializing in coins that are typically outside most "bling" buyers' desires and bidding last second, but it's impossible to always compete against someone with such resources.

[Deinomenid]

15 minutes ago, kirispupis said:

Nomos auction not long ago where every bid of mine was completely swamped

I was quite pleased that that Corinth coin we discussed on these pages that this individual bought for dozens of times estimate and laughably above estimate, they even the Nomos auctioneetlr was laughing at made the doofus of the episode in the latest Ancient Coin podcast.

[KenDorney]

I suppose it depends on what exactly we are talking about here.  Is it auction houses bidding in their own sales or others?  If one does much browsing year after year you will see that many coins never seem to sell to collectors.  They are bought up by dealers who then try their luck with a different venue (or their own).  This is incredibly common.  When speaking to one house owner/operator (to be remain nameless, but one of the biggest in the world), he had mentioned recently that they were very short on material to fill their sales and that he was forced to buy quite a lot in other sales.  Auctions are often a gamble.  Hammer prices that will generate a profit and never guaranteed and there is plenty of risk involved.  

If we are talking about houses bidding in their own sales, yes, that is common as well.  If a lot is going too cheaply they might step in and buy it for their own inventory or for a client.  Thats common too, and completely normal.  

Shill bidding again in this thread here.  I hate it and when it is obvious I just dont do business with that house.  In the end, I enter my maximum price (never my minimum unless it is a coin of little interest).  If someone bids more (whether shill or not) I just dont care.  Someone wants it more, let them have it.  Shill bidding in this market is largely being driven by wealthy people (dont know how many are collectors or just speculators) who use that 'nuclear' strategy with their bids.  I see a $1,000 coin that I bid to to that value, but if they (shills included) want to bid $5,000, I dont care.  Yes, its a bummer as many coins are now out of reach for me.  There isnt anything any of us can do about it, so I just plod on the best I can.  

[ACCLA-Mike]

I see nothing wrong in dealers buying in other dealer's auctions as long as they don't get a professional discount on the vigorish (18-25% these days) since that obviously puts them at an unfair advantage. 

[Tetradogma]

Is it not more likely someone used those names as a joke? As someone mentioned above Roma bidding at Nomos didn't use a name that linked to their company name