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Tuesday 12 February 2013

Auction Houses: They Are Not All The Same!

The development of Online Bidding facilities means that any collector, anywhere in the world, can now bid in a large number of Auctions without being physically present and without having to make a  written bid. The development of the software which allows this is itself a remarkable achievement in which some of the big auction houses played a leading role: David Feldman in Geneva, for example.

For me, one of of the most important differences between auction houses is whether they own what they sell. At one end, there are houses which own 100% of what they sell. In this case, the auction catalogue is really a Price List with the option to pay more than the asking price. At the other end, some houses own nothing of what they sell. In this case, their economic success depends very much on the percentage of Lots which they can sell in each auction. This gives them an incentive to keep Start prices low. In between, there are many auction houses which own some of what they sell but get other material from outside vendors.

Among the major auction houses, I do not know any who own everything they sell. I can immediately think of two who own nothing of what they sell (Corinphila, Köhler) and two which own some of what they sell (Raritan, Cherrystone). Both arrangements have advantages. For example, if you want an Estate Lot which has not been sorted and broken down, then you probably need to look in the auctions of houses which do not ever own material. But if you want the chance to buy fine items from big collections, then you will always find them in the catalogues of firms like Raritan and Cherrystone. At the present time, Raritan is doing a very good job making available material from the Seichter-Bulat-Zelonka collection which has never before been offered in small Lot form. This is a valuable service to collectors. Raritan deserves praise for its work (and I am sure it's a lot of work!) But the original big collection was sold by Corinphila.

The next major difference concerns the question of expertise. There are many auction houses, some of them large, which take in anything from any period or any country and describe and price it "in house". They never call on outside expertise. Sometimes they are completely wrong on pricing. Sometimes they offer forged material as genuine because they just do not know how to assess it. For Armenia - a Forgery Rich collecting area - Stefan Berger chronicles how auction houses get things wrong on his website

As an amusing example of what can happen when you don't know what you are doing, quite recently a quite well-known auction house offered as Rare (Really Rare!) an inter-panneau gutter pair of Russia Imperial Arms 14 kopeck stamps with a Start Price of 1000 € ... apparently unaware that all Imperial kopeck value stamps were printed in sheets of 100 divided into panes of 25 with a gutter between  ... Instead, they exclaimed "unlisted in Michel"! (No, it didn't sell).

Other auction houses regularly employ outside Consultants when they take in material they don't really know enough about to describe and price. What surprises me is that they rarely acknowledge this. But it would be really helpful to buyers to be told who had described /priced the material and publication of such information ought to increase trust in the auction process.  I think it would surprise many collectors to know how carefully some auction houses organise the description and pricing of material - and how carelessly others do. The careful auction houses should be more confident in making public the way they work!

A third difference concerns the ability of auction houses to "source" material, to obtain really good things. Here the major houses of course have an advantage. They have people who will fly round the world NOW  if they think they can secure a good consignment. But a small auction house can build up a reputation and relationships which sellers trust. For example, Kaj Hellman in Finland for many years had access to material from the Fabergé collections.

Finally, it used to be the major concern of collectors whether an auction was "honest". In other words, suppose the Start price was 100 and you sent a written Bid for 1000 and there were no other bidders. What  would you pay? It has been one of the pleasant surprises of my career as a Dealer that in most cases, the answer is: 100.

Of course, now we have Online Live Bidding, there is no need to worry. But I think you may still enjoy this story, told to me by Kaj Hellman in relation to his Auction, before the days of online bidding. He has given me permission to repeat it here:

He had a Lot in his Auction with a Start Price of 400 €. He had two written Bids before the start of the Sale: one for 4000 € (my Bid) and one for 32 000 €. Yes, 32 000 (You guessed; this was Zemstvo material). So he started the Room Bidding at 4500 € (correctly). There was a lot of bidding in the Room. When the Room Bid got to 20 000 he began to worry. Suppose the Room Bid stops at say 25 000... Is the Written Bid buyer going to believe that he really ought to pay 26 000 for a Lot with a Start Price of 400? It got worse. The Room Bids got to 28 000 ... Kaj Hellman was now seriously worried. If they stop at 31 000, it's a disaster. The Written Bidder will pay the full 32 000. He will never believe it! When  the Room Bid went to 34 000, Kaj Hellman's relief was enormous. He could have hugged the successful Room bidder!

1 comment:

  1. Good to have serious and trustworthy auctioneers like Kaj. On the other hand: If Kaj used an online live bidding service, I am sure the bidder who sent in his bid for 32.000 would have continued bidding byond that amount.
    What makes me think that? I can tell you: Someone who is prepared to bid 80 x the starting price, simply wants the item, at any price. He would most likely be prepared to bid 200 x!