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Hot Topic (More than 10 Replies) Auction practices, what do you think ? (Read 8142 times)
graduated peep
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Auction practices, what do you think ?
Jan 30th, 2015 at 2:00pm
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My post pertains  to firearms and related items acquired  by means of buying at auctions, so here is what I'm asking.....
A lot of you have bought firearms etc at various auction venues over the years, and the plan is usually pretty straight forward: Items are offered for competitive bidding in front of an audience; either live, online, or both.
As a general rule, auctioneers will act as an agent for the seller, and if accepting absentee or phone bids, as an agent for the buyer as well.
I have been told that that isn't acting as an "agent"; but I do not know what else it would be called.
Now recently I have come across a situation that to me at least, blurs the lines between running an honest auction and one that is sort of shall I say, questionable.
It is a situation where the auctioneer is offering goods for sale from various owners by soliciting bids from an onsite audience,as well as online bidding (absentee), as well as phone bids, AND IS ALSO BIDDING UP THE ITEMS FOR THE OWNER .
This last function is what I have trouble with.
It smells of what I've read as being called "puffing": The act of artificially bidding up an item for the benefit of the owner.
As far as I know, no mention is made during the auction as to whether a given item does or doesn't have a reserve. And after knockdown, no mention is made as to whether the item actually sold or did not meet it's reserve.
The only way I've seen to tell if an item sold or not is to check the prices realized page.
If there's a gap in the consecutive numbering, then that item must not have sold.

I  know that the act of bidding on behalf of a seller to help reach a reserve is in the "fine print", so they DO mention it if you look through terms and conditions.
But there's something about it that doesn't seem quite right.
So do you guys think that is a fair way to operate or not ??
  
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KAF
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Re: Auction practices, what do you think ?
Reply #1 - Jan 30th, 2015 at 2:06pm
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I will guess the only way the bid could go up no matter whom is bidding on it is if bids were made.

To much to pay don't bid, let them eat it.
  
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graduated peep
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Re: Auction practices, what do you think ?
Reply #2 - Jan 30th, 2015 at 3:21pm
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That's true. Know what you want to pay and stick to it. 
That's why I'd sooner use absentee bids, so I'm not there getting caught up in the moment and spending more than I planned on.

However, the act of bidding up an item to try and coax it to a reserve is giving a false impression IMO.There is a hidden vested interest .
If an item has a reserve, either state so as it's being offered; or after bidding is over and it hasn't reached it. That's fair and the audience knows exactly what just happened. OR if a printed list or catalog is available, a capital "RES" next to the item for reserve would at least alert buyers to the fact.

Now look at  ebay. As far as I know, bidding your own stuff up isn't allowed.
Nor is having a buddy run it up. That is a hard thing to prove, but I know some people that did get caught doing it, and they were kicked off the site.

Some of the auction regs I've come across are interesting.
For instance, it is unlawful for an auctioneer  to bid on items for themselves. Now why is that unlawful, but it isn't unlawful to run an item up for your client ??
  
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sportslube
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Re: Auction practices, what do you think ?
Reply #3 - Jan 30th, 2015 at 5:22pm
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it called being a shill.  my dad was an auctioner all of his life and his opinion of wasting his time trying to get to a reserve price was not worth the effort.  if the owner stated that it is was worth this price that is where he started. if he could not get a bid it was placed in a pile of other items that did not sell and the owner could think about it. then he could bring it back at the end an sell it for what he gets or take it home.  i just wish auctioners today would be more forth right and state it up front.   a few years back i went to a gun auction.  i was watching the auctioner,  looking over at a fellow to the side of the stage.  low an behold here is the owner of the guns checking his clip board an nodding when it reached his price and went to an actuall bidder. i left after voicing my opinion rather loudly  as well as several others.  that caught on to this pony show.
  
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kootne
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Re: Auction practices, what do you think ?
Reply #4 - Jan 30th, 2015 at 5:42pm
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somewhere I had the idea that shilling and related acts are classified as collusion and violate Federal law but I sure couldn't quote the book, chapter and verse.
  

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slumlord44
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Re: Auction practices, what do you think ?
Reply #5 - Jan 30th, 2015 at 7:16pm
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I have had a few instances on Gunbroker where I thought something funny was going on. Never got an answer from them that made any sense. Hate it when sellers keep re listing an item with an unrealistic minim bid and never get a bid. Better to  start low with no reserve. Never saw anything sell there at a bargain basement price going that way yet.
  
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cheatin_charlie
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Re: Auction practices, what do you think ?
Reply #6 - Jan 30th, 2015 at 8:03pm
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I never bid on Gunbroker where a person has a reserve price.  If they will not list no reserve and start opening
bid at the least they will take I will not waste my time bidding.  I will not keep bidding to try to reach some
unknown reserve.
  
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frnkeore
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Re: Auction practices, what do you think ?
Reply #7 - Jan 30th, 2015 at 8:43pm
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I got "shilled" at a local auction on a car, about 8 years ago.

I'm good about auction and never go above what I set as a value.

When I quite bidding, all of a sudden, they couldn't find the last bidder and they did me a "big favour" and gave it to me for my last bid. I did get a good deal, anyway.

I've never bid on a car from them since and watch the bidders while I'm bidding on guns now. There are usually much less to watch for that part of the auction.

I agree with Cheaten Charle about auctions with Reserves and never bid on them, either.

Frank
  

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uscra112
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Re: Auction practices, what do you think ?
Reply #8 - Jan 30th, 2015 at 9:59pm
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I do bid, just to show 'em what the real price should be.

  

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texasmac
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Re: Auction practices, what do you think ?
Reply #9 - Jan 31st, 2015 at 1:22am
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I've bought & sold a couple hundred Browning and Win. High Walls BPCRs on GunBroker, GunsAmerica & GunAuction.com, most by far were on GunBroker.  The GunsAmerica were not auction listings.  A couple of times I got a feeling something funny was going on when bidding so backed away from those.  When listing for sale I never set a reserve but when bidding I will bid on an item with a reserve.  Sometimes I get lucky and the reserve is set lower than what I know the item is worth.  When listing an item the starting bid price is set at the minimum price I'll accept.  No major problems so far and I don't recall ever having to relist at a lower price.

I always use the Buy Now option on GunBroker.  About half of those sold are at the Buy Now price which also gets the buyer a choice of a copy of my book or they can buy on layaway.  Since the rifles are typically in the $1800 to $2000 range, layaway for an additional fee is a popular option and selling feature.  

BTW, I'm not trying to hijack this thread or change the subject, but I also sell to California customers and do not charge an extra fee for doing so.  In my mind, sellers that refuse to sell to CA customers or charge an extra fee are doing a disservice to the industry.  I've discussed this on this forum before and will not debate the issue with those that disagree.

Wayne
« Last Edit: Jan 31st, 2015 at 1:35am by texasmac »  

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boats
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Re: Auction practices, what do you think ?
Reply #10 - Jan 31st, 2015 at 8:37am
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My take is auctions have no rules and odds are against you.  Just like Las Vegas.   I set my maximum price and stick to it no matter what.  Other principal is never pay more than you can afford to loose.  Over the years once or twice have been taken with hidden problems.  Chalk it up to luck and spread the loss over the good deals. 

If buying from someone I know I will pay a premium, cheap insurance.

Boats
  
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graduated peep
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Re: Auction practices, what do you think ?
Reply #11 - Jan 31st, 2015 at 9:33am
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boats wrote on Jan 31st, 2015 at 8:37am:
My take is auctions have no rules and odds are against you.  Just like Las Vegas. 

Boats

The thing is, when you go to a gambling establishment, you (should) know going in that it's a GAMBLE. The odds are supposed to be stacked against you. Any body that doesn't realize that shouldn't be gambling.Besides, gambling is considered "entertainment".
And there are plenty of laws regulating gambling. Whether they're enforced, is another matter.

Regarding public auctions, there are specific rules how they are to be run and there should be no odds for or against you; at least from how the auction is handled.
Unfortunately, there are way more auctioneers than regulators, so the fox pretty much has his way with the hen house.

Bad auctioneers tend to be self eliminating thank goodness.
I remember a fellow that would travel around setting up gun auctions at hotel banquet rooms.If you attended enough of his dog and pony shows, you soon realized he was selling the same guns over and over.He  would also set up at gun shows with the same guns ! As time went on, attendance at these "auctions" got less and less because everyone caught on.The guy would let a gun go now and then as a teaser, but it wasn't enough to fool many people.
I later learned that this guy would go around soliciting "junkers" from reputable dealers, then do whatever he had to or could do, to spiff up the gun to make it more appealing. I inspected guns that had fresh metal chips in the chambers from some sort of gunsmithing; and even viewed an alleged original Colt Dragoon that was nothing more than an antiqued Armi San Marco special Tongue. It "sold" for several thousand dollars at one sale.
Fortunately, this fellow's shenanigans only lasted a couple of years.
  
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graduated peep
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Re: Auction practices, what do you think ?
Reply #12 - Jan 31st, 2015 at 9:48am
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sportslube wrote on Jan 30th, 2015 at 5:22pm:
it called being a shill.  my dad was an auctioner all of his life and his opinion of wasting his time trying to get to a reserve price was not worth the effort.  if the owner stated that it is was worth this price that is where he started. if he could not get a bid it was placed in a pile of other items that did not sell and the owner could think about it. then he could bring it back at the end an sell it for what he gets or take it home.  i just wish auctioners today would be more forth right and state it up front.   a few years back i went to a gun auction.  i was watching the auctioner,  looking over at a fellow to the side of the stage.  low an behold here is the owner of the guns checking his clip board an nodding when it reached his price and went to an actuall bidder. i left after voicing my opinion rather loudly  as well as several others.  that caught on to this pony show.   

I think the worst case of shilling or puffing was at a farm auction where the owner had a few cronies bidding stuff up for him.
It wasn't just guns; it was farm equipment, antiques, and some higher end household goods. Each man had a sheet with minimum prices for each item, and if they ended up buying the item back, the owner would saunter over and pull out a roll of cash that would have made a roll of toilet paper look puny. He'd peel off whatever was required to pay for each item.
What was funny to me was, when I outbid his crony for a Stevens 44-1/2, the owner still wasn't satisfied with the price; so he stepped up and started bidding just before the auctioneer knocked it down to me. I had to pay a bit more for the gun, but luckily the owner had no idea what a 32-40 44-1/2 was actually worth  Grin
  
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marlinguy
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Re: Auction practices, what do you think ?
Reply #13 - Jan 31st, 2015 at 10:09am
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It is a well known fact that auction houses have the right to run the bidding up, or have their own bidders in the crowd to bid items up IF the seller has a reserve on the item. If the item has no reserve, then the same practice is illegal, and not allowed. That doesn't mean some auctions don't practice this regardless, but it's unethical, and not the norm.
I personally would not bid on a reserve auction unknowingly. If there is a reserve, I will bid, but I want to know that I'm bidding on a reserve auction when it begins. The phone bidders, and online bidders used in so many auctions today allow the auction services a lot of leeway to do some pretty shady stuff. No way for the crowd to know if the agent on the phone is really talking to someone, or simply driving the prices up to get more money in their pockets.
  

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marlinguy
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Re: Auction practices, what do you think ?
Reply #14 - Jan 31st, 2015 at 10:14am
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Quote:

I think the worst case of shilling or puffing was at a farm auction where the owner had a few cronies bidding stuff up for him.
Grin


The same thing happens with online auctions. Often sellers on various ebay or gun auction sites will have their friends bid on their item, and tell the friend what their reserve is. So 2-3 guys bid the item up close to the reserve, so innocent bidders will see all the interest, and possibly push them towards jumping in, and they bump it over the reserve. Then all the bidders who were driving it to the reserve suddenly disappear, and the new bidder wins the item.
I bet we'd all be shocked how often this practice is done.
  

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