Buying Stamps from an Auction House ....... is it worth it?

[Phil]

So I'm sitting here in my apartment in Guyana, going home in about 2 weeks and thinking about stamp shows I want to go to and playing around on the internet and my journeys have taken me to an online auction house. B and D Auctions to be exact, (banddauctions.hibid.com/). 
Of course I did a search for stamps and there was a few lots up for auction. Not terribly expensive so they caught my eye.

But a couple things are concerning me. For starters there is an 18% "Buyers Premium". I wasn't familiar with that so I Googled and it appears to just be a flat extra to charge you. I also couldn't find anything conclusive about shipping. And finally, the pictures looked appealing, sort of, but there wasn't very much information about what was contained in the lot. Just pictures of albums - and mostly the outside covers at that.

So am I just wasting my time? Did I just come across a dud of an auction house or is this what I can expect from most online auction houses?

[mourningdoves]

Phil, 18% seems a bit high to me, but in general the auction house needs to get a cut somewhere, and I take it in stride as long as they're forthright about it. The commission is tacked on to your invoice. I looked briefly at the B&D site and they didn't seem to be especially oriented toward stamps. And you're right about the shipping charges; they should not make their policies so hard to find.

Three auction sites I patronize:

Golden Valley Auctions in Minnesota. I'd say they're best for more specialized collectors; most of their offerings are singles or sets. They put the Scott catalogue value in the description and the images are decent, though they don't often show the backs. 15% commission, shipping is usually their guess at the actual cost and is very fair. Some stamps trigger bidding wars, but if you go after semi-classics from a country in a cold market, you can get some very nice deals. I got a Hungarian souvenir sheet just last night for $13 (I think that's about 20% of catalogue) because most of the people who were in on this auction didn't care and the bidding was light. If the item has to do with World War II, it can get pretty frantic.

If you place a bid, you can get an email every time you get outbid if you want. Or you can check on the site when you feel like it to see if you're winning and/or what the high bid is.

Vance Auctions in Ontario. Their auctions are ginormous - a couple of thousand lots every ±2 months. Lots of singles and sets. Lots of collections: country, worldwide, topical. Very few images. Either catalogue prices or "estimated value" prices are given for each lot, and they tend to start pretty high. Like, I won't get anything for $13 there, no matter what it is. Bidding is blind: that is, you can't find out if you got outbid, you have to choose whatever it's worth to you and hope it works. If you're new to auctions, this may not be the place to start unless you wanna take a flyer on a starter collection of a new country or topic, but it's worth a look at the Web site just to see the possibilities.

ISWSC. This is a non-commercial society that runs a bimonthly auction, usually with about 400 or 500 lots or so. You have to be a member to either buy or sell here, but that's $15 a year (soon to be more expensive for the print edition of the journal and less so for the .pdf). Minimum bids start at around $5.00. Retired collections, assortments of duplicates, and sets/semi-premium singles. No images at all. I can send you a .pdf of a recent one if you wish to get an idea of what it's like. (I edit the journal.) Again, the bidding is blind, and you won't know if you won something until you won it. The seller pays the commission. Like Golden Valley, you pay the postage, no handling charges are tacked on.

I've also participated in a few auctions hosted by specialty societies (e.g. the Costa Rica Philatelic Society), but I won't get into that here.

The biggest thing about auctions is resisting the temptation to get too enthusiastic about bidding wars. If I win every bid I've entered, I believe I'm doing something wrong. Otherwise, it's an excellent way of building a collection, and it isn't as cut-and-dried as hitting "buy now" on certain sites and paying whatever the number is.

Hope this helps.

[khj]

I would say 90%++ of my purchases in terms of money amount have been from auctions over the decades. I'm primarily a buyer of lots/collections. While ~50% of my purchases over that time are for single stamps, the catalog value of those purchases is very small, and those are mostly from online marketplace rather than auction house. So keep that in mind, as my reply reflects my spending habits rather than overview of auctions.

Buyer's premium is pretty standard of any licensed auction house. Those running their own online auction site or online marketplace often do not charge a buyer's premium, relying either on auction of their own inventory or charging a seller's premium/listing/closing fee.

So you have to distinguish between auction house (Siegal, Heritage...) and online auction marketplace (e.g., eBay, Hipstamp...). Hereafter, I will only discuss auction houses, since your question was pertaining the buyer's premium.

Typical buyer's premiums are 10%-20+%. 10% is really unusual these days, since about 10 years ago. I only purchase from 2-3 auction houses, and the last one to charge 10% went up to 15% about 5+ years ago. I factor in the buyer's premium when I bid, so it doesn't affect how much I pay in total. But in general, I won't consider an auction house that charges more than 15%, since the auction houses that charge 15% have what I need. Anyone still charging 10% is a pretty small auction operation -- but if they have what you need...

I don't even bother bidding at the high-end auction houses (typically charge 20% buyer's commission or more!). Not because of rate, but because they rely on past or apparent reputation, and their clientele tend to have deep pockets. Yes, you can find a bargain once in awhile, but to me, it's not worth the effort -- you will get outbid or end up overpaying (disregard catalog value, by overpaying I mean you could have bought same thing elsewhere for cheaper). I peruse their catalogs, admire the photos, laugh at the listing errors, and smirk when I see how many stamps sold below estimate while they brag about how a handful of items sold way above estimate.

If you go to major/medium auction houses, you should definitely spend at least 3-6 months observing their auctions, studying their listings, and noting prices realized. First auction, bid on only on 3-5 items at most, so you don't get burned if you find their descriptions are less than accurate. There's a reason I've stuck to only 2-3 auctions houses over the decades. The business relationship is important, but knowing their listing terminology/habits/accuracy and their true "return policy/attitude" is critical for long-term successful purchases (my opinion).

Some long-term strategy if you find you like buying from auction houses:

Build up a good relationship with the auction house, you not only get first dibs on unsold items, but they'll actually tell you their bottom line sell price on unsold items rather than their standard unsold asking price! Even give you a lower batch price for multiple lots.

I've gotten to the point where 75%+ of my auction house purchases are actually on unsolds (I only bid on a handful of must have items, while the unsold purchases are from my wishlist in case something is sold at an even greater discount). Typically saved 10-25% off the opener!

[Phil]

mourningdoves, khj,
Thanks for the info. I've been wanting to check out the Auction houses lately, really something other than Ebay. Hipstamp is nice, I've gotten a thing or 2 there but really wanted to try somewhere else.

[youpiao]

Aug 26, 2021 17:40:35 GMT -5 khj said:

I only purchase from 2-3 auction houses,

Can you share with us the names of these auction houses you like? I 've done very little purchasing through auctions, but would be interested in perusing more  of them. 

[khj]

ABC Auctions
Dutch Country Auctions

Be forewarned, there is a small group of people who don't like Aldrich (personally, I think it is "chip on the shoulder" bias rather than something that actually has reasonable substance). The disagreement is primarily in an area of philately that I don't collect, so I not only stay out of the stone-throwing but also don't care -- it's not an issue of ethics but rather opinion regarding "who is really an expert". Aldrich takes the high road and just ignores them in public -- I've never heard him say or read anything from him disparaging the detractors. But I've bought from them for nearly 20 years (ABC Auctions only, not his other auctions) and have been very pleased. My return/dissatisfaction rate is <<5%, and the good lots far make up for the returns or lots I had to eat because too expensive to return.

People might think 5% dissatisfaction rate is rather high, but that's using a very harsh cheapskate pricing standard.

I haven't bought much from DCA, less than half a dozen, and had to return one item because incorrectly described. No problems with the return, they even refunded my shipping costs at my request because the item was incorrectly described. I haven't bought from them in nearly 10 years, but my analysis of their auction results indicate a lot of good deals to be found back then, and obviously I was very happy with their respectful return policy/attitude. I didn't buy much from because I prefer buying much larger lots, which isn't really their specialty -- they tend to sell small lots to individual stamps/sets with some medium lots, but I seldom saw the collections or large lots that tend to attract me.

Vance is good, although I've never purchased from them because I'm a cheapskate when it comes to shipping & taxes. But I've heard nothing but good things about them.

There are some I would never buy from, even if the opener was a penny! Sigh, penny auctions, those were the days...

However, I won't name those auction houses in public. One has gone out of business, and I won't lose any sleep over that. Another, really should go out of business but they managed to continue to attract a large following based on their ancient reputation and astute advertising, despite the fact that one of their owners was convicted of a felony in regards to the stamp business.

Tedski, remember Mel at StampWants? Really miss Mel (my stamp collection misses him, too!).

Almost all the storefront dealers and show dealers that I used to buy from have all either died or retired. I don't have the time to put into building up dealer relationships anymore (it's not an easy thing to do for a minority in the deep south, although things have gotten much better). So I pretty much continue to buy from the remaining dealers & auction houses I purchased from before 2010.

[I.M. DeBear]

Those buyer's fees are such a slap in the face, I would never even consider paying them. A good, properly organized auction should generate seller fees enough for all but the greediest auctioneers, and it seems they do, actually. Except for the occasional local club auction, I stick strictly to eBay. Their fees are small, they back up every transaction, and the range of material available for perusal at any time is limited only by your ability to describe. Plus, the application of proper search techniques easily ferrets out hidden gems for pittances. I've found that it's the most effective place to spend my auction time. The concept of paying +10-20% solely for the privilege of doing business with someone has ZERO appeal to me.

[khj]

It is a matter of taste. In exchange for the 15% buyer's commission, I am getting a no-questions asked MBG, access to low cost large lots that have been fairly-well vetted for junk, their philatelic expertise/professionalism... But of course, the reason I stick to a very few auction houses is because I have to be convinced that I do receive those aforementioned "benefits" from said auction houses. I will add that a lot of auction houses are bad about actual returns and rates of junk/mis-described item -- e.g., paying the buyer's commission is indeed a waste of money.

As I mentioned, I lower my maxbid by the commission amount (I have the formulas coded into my spreadsheet so I enter my bid and it spits out the amount I should bid so that the final hammer price doesn't exceed my maxbid). So in essence, the buyer's fee doesn't really impact my bid. I may lose out on an auction lot because I'm deducting the commission, but that just means I have more money to spend on another lot.

One final thing. Although fewer auction houses do this now, the 2 auction houses I mentioned above have historically always sent me the auction lots BEFORE I paid for them. I don't know if they still do this for all their customers, but they did when I first bid with them over 15 years ago and still continue to do so with me.

One thing I forgot to mention -- ABC Auctions now tacks on a surcharge for using credit card. So I pay by check now, after I receive the boxes and invoice. I know they still do that with their regular customers -- not sure if they do that for new customers now.

[khj]

Phil and youpiao, you should consider perusing Stamp Auction Network, as that's the current major online gathering point for all the high-end and medium-sized auction houses now. Commissions will vary, so you unfortunately have to read each auction house's rules.

Comparing an auction house to an online marketplace is not a fair nor equitable comparison. Online marketplaces are like a flea market -- deals to be found, rip-offs to be encountered. Almost all online marketplaces/auctions refuse to obtain auctioneer licensed (this includes eBay). Therefore, you have no legal recourse, other than the weight of the marketplace owner to self-police. While they tend to be very supportive of buyers, I do encounter outright fraud more often than I would like. And if they ship from out of the country, it's usually past the deadline to file or they simply close up shop and ignore eBay.

Not counting supplies (the bulk of my purchases on eBay), I have bought less than a few dozen stamp lots off eBay over the last 20 years, and half of those were from sellers I already knew from other online marketplaces. Compare to StampWants/Bidstart (now HipStamp), where I purchased more than 15K+ different lots (mostly single stamps or small lots). I only recall being burned twice out of 100++ sellers, so I consider that very good. Both those sellers were expelled and I never got my money back. The advantage of HipStamp is that you can be part of community that keeps tabs on good sellers and warns you of problem sellers. On eBay, I find that a lot harder. I also found myself outbid 90%+ of the time on eBay, so I felt like I was wasting a lot of time for just a handful of items (I'm greedy, I want lots and lots of stamps!).

I stuck with buying on HipStamp for a long time. Then they discontinued their penny auctions, and then my favorite seller Mel went to the great stamp vault in the sky. After that, I went back to the licensed auction houses, because my buying habits are better suited for large lots rather than the individual/small lots that dominate in the online marketplaces. There are a lot of great sellers on HipStamp (ahem, youpiao, Philatarium...). I no longer like dealing with dozens of different dealers each month. I'd prefer just getting large lots from 1-2 dealers every several months.

Your buying habits will make a big difference in what is suitable for you.

[I.M. DeBear]

Even factoring bidder fees into the purchase amount that way, it doesn't work for me. Agreeing to allow someone to slap my face, and then continuing to agree to it repeatedly, is a concept that I'm inherently disposed to oppose, although some folks might consider it a workable enough scenario. Bidder fees are disdain in 3D, blatant proof that auction houses consider us merely minable resources. They only have the chutzpah to charge bidder fees because people agree to pay them. When folks stop agreeing to tolerate a problem, that problem will stop immediately, just the way it happened in India.
Piled onto all of that, having closely followed the sad sagas of the various troubled auction houses in the trade magazines over the past several decades, I find it nearly impossible to work up much faith in, or sympathy for, any of them.
On eBay, you live and die by your reputation. I won't do business with anyone that has less than 98% positive, no matter what the deal. That weeds out almost all of the riff-raff and headaches. I'm quite comfortable there with my personal 16-year 100% positive streak, so, there I'll happily stay 

[khj]

To each his/her own.

I disagree with your assessment that the buyer's commission is a slap to the face (at least not my face).

While you may feel you don't get anything in return, I feel I get a lot in return as a worldwide collector. To me, rather than a slap in the face, it is merely a handshake agreement to how I do business with the auction house, that I can opt out at any time. I admit, it did take me awhile to accept the concept. But once I figured out how much money I could save and also the access to things I couldn't get in online marketplaces or stamp stores/shows, I gave it shot. Mel was really the only person in the online marketplaces that had final sales price competitive to the auction houses for the material types of lots I was interested in -- both of us were always rather curious why he attracted so few bidders over the years.

Your assessment of the 15% buyer's commission disregards the bottom line -- what is my final price? If my final price is lower than what I would pay off of eBay or elsewhere, who cares how much the commission is?

There are reasons I continue to buy from auction houses:

-- I am primarily interested in medium/large lots with wholesale selling price in the $100++ range (so my comments won't apply if you are primarily interested in buying single stamps/sets or very small lots)
-- I actually pay a lot less for my purchases even with commission
-- I never have to worry about not being able to return an item for any reason (need established relationship)
-- I prefer large lots all shipped together from a single seller with solid credentials (if I'm going to spend that level of money)

I'm glad that you aren't willing to pay buyer's commission. That just means less competition for me. But please realize that others do receive a substantial benefit, even if you don't.

I guess the comparable equivalent is people who pay for Sam's Club or Costco memberships. I used to think that was really odd (back then, as staff in academia, my membership was free), when I could shop elsewhere for free. But after awhile, I realized that there were clearly some benefits -- it was only an issue of whether the financial or time benefits were worth the future annual membership fee. Same thing with Amazon Prime (I am not a member and have a hard time picturing myself as an Amazon Prime member -- I just only buy things with free shipping). But I realize some people see great value in Amazon Prime membership, especially with their special Amazon Prime only sales. Each person decides whether the benefit they get in return is worth it.

[I.M. DeBear]

It is indeed a matter of perspective. This convo reminds me of a long-running one I used to have with Mrs. DeBear's dad. He would've done business with the Devil himself if there was a profit in it, while I've never had a problem passing on a deal if I didn't like the details. I consider transactions as occurring between relative equals. If I agree to pay the demanded fee, then I willingly subordinate myself, a business arrangement that I just cannot agree to. To each his own.

[angore]

I had purchased smaller lots from Kelleher but after the commission and then shipping it did not seem cost cost effective. I guesstimated that the cross over point was around $75-100. Since you do not know what lots you will win I just stopped bidding.

[sforgca]

I seldom  buy anymore and if I do I generally go to country specific auction houses both for the range of items and the authenticity.
As khj mentioned I used to buy lots or collections of specific countries especially if I spotted wants. The extras would be easy to sell. More so when the lot is a single country
Fees have gone up a LOT and are now in the 15-25% range which can be a deterrent.
Good singles, pairs etc. seem to often be very overpriced - possibly due to a lot of new "collectors" who treat the stamps as "investments". A lot of new buyers with $$ are driving prices up. Given their inexperience they may well account for the insane bids on the flood of fakes & replicas available on the eFake auctions.

Anyway my advice as mentioned would be to browse the central auction networks and get acquainted with the sellers who generally are reputable. My recommendations are;
StampAuctionNetwork
Philasearch
a newer one with potential & specialized - Oldbid

[khj]

Yeah, the increase in commissions over the past 20 years is noticeable. The increase of 5%, I can sort of understand as they join auction house hosting (such as SAN) -- they are basically just passing on the online auction house hosting/closing fees. That's one of the reasons I'll consider 15% commission, but pretty much disregard higher rates. But if it still ends up cheaper than buying off of online marketplaces, that's all that matters to me. If it's cheaper on the online marketplaces, then I'll buy it there. But for the material that interests me, that's usually not the case.

I've noticed the similar jump in real estate commissions and restaurant tips. For the longest time, it was 4% and 10%, respectively. Then in a matter of less than a decade, they suddenly jumped to 6% and 15-20%, respectively.

Bottom line is, consider auction houses only if the material you want to get is not cheaper elsewhere. My foray into auction houses turned out to be a very productive and cost saving one (compared to what I would have paid on eBay or store/show dealers). But that is not a typical result for the average collector. I collect worldwide, and I am told by dealers that they consider my collection advanced even though I consider it intermediate. I know I could not possibly have built it up to where it is today by only relying on eBay or storefront/show dealers.

[khj]

Aug 27, 2021 5:28:29 GMT -5 angore said:

I had purchased smaller lots from Kelleher but after the commission and then shipping it did not seem cost cost effective. I guesstimated that the cross over point was around $75-100. Since you do not know what lots you will win I just stopped bidding.

I avoid the major auction houses for this reason. I'm almost always outbid. And the stuff that is only available at the major auction houses, I couldn't afford anyway. So I just look at their catalogs and admire the pictures.

BTW, a lot of the auction catalogs are now available in digital format. If you enjoy looking at pictures of uncommon stamps... In the past, non-clients would often have to pay for a subscription to continue receiving if they didn't bid. The catalogs are an interesting reference. Now, several of the major auction houses actually have their searchable sales history available online. (are you noticing this, Amos?!?)

[mourningdoves]

About eBay: I deal with a few folks who try their best to fill my unquenchable desire for Balkan eye candy. They are likeable vendors - mostly from Serbia and Bulgaria - who specialize in recent issues, and I fill up blank spaces in those nations and their neighbors. You just can't find things like that at stamp shows. I generally don't buy classics or make large purchases on eBay unless I know the dealers and/or have good reason to trust them, and I don't go out of my way to look for classics or rarities - I only see them if I'm looking for modern issues that are already in my wheelhouse, as it were.

I never got into the Hipstamp habit. Maybe I should scope it sometime. Like I need a new place to spend my spending loot.

And always, I am calm and judicious when submitting my bids, as befits my rational, very scientific temperament; and I always keep in mind the old, wise, adages:

1. What goes around comes around.
2. Tomorrow is another day.
3. A penny saved is a penny earned.
4. If I don't win this bid and get this stamp right now, I'll feel the loss forever and be haunted by feelings of inadequacy. Every time I walk down the street people will throw stuff at me - usually greasy, fetid items they found on the sidewalk, yik! - and my plan to be the most revered philatelist in the world will be thwarted. Yes, thwarted - by these tiny fools!! The stamp must be mine! Mine, mine, mine! I WILL MAKE THEM RUE THE DAY THEY MOCKED ME!!

That'll show 'em, huh?

[stampie78]

A few years ago I used to bid on Vances auctions but haven't even looked at one of their listings for years. Probably because of the extra fees which in my case was most likely as much as the stamps I bought.

I had a dealer in Edmonton who had auction a couple times a year but there were thousands of lots and it was worth the effort to through the listings. He always sent a paper catalog with very small descriptions. (eg. bankers box of stamps and stuff.) I actually threw in a "s--t" bid once and got the thing. Surprising what one calls "stuff". I found thousands of collectable stamps/sets/glassisnes/covers/etc. I can only assume the "stuff" was the packets of hinges/mounts/stock cards and sheets that were thrown in among the stamps. I think I got it because nobody wanted to gamble on the "stuff" part of the box. One of the best buys I ever made.

He finally went out of business. His excuse was he wanted to retire and travel. Too bad because he was one of the best dealers I have ever dealt with.

Now I am down to one in Vancouver who has weekly auctions. All online and each lot has a picture to go with the description. Don't know how he does all that work each week. He can be found at www.fvhstamps.com. I still make the odd bid. He charges a supplies fee ($1.00) + HST

You might want to take a look.