Wednesday, December 5, 2007

Conventional auctions

Recently, I won 1 lot in the Romano auction and 1 lot in the Unistamps auction. These auctions were both in October, and yesterday I received the lot from Romano. The one from Unistamps has yet to show up, and they haven't responded to my last 3 e-mails. I paid for the lots via credit card the day the invoices were sent out, which was within a few days of the auction close. Not only are the conventional auction houses slower than e-bay, they charge a huge amount of fees on top of a winning bid.
The Romano auction for example, had a commission (15%), credit card fee (4%), bank fee ($5), shipping ($5) and handling ($2). A total of $36 in fees for a $120 item, which is 30%. It took what started out as a good deal and made it a not so good deal. I guess I should have looked into all the fees upfront more, but I think I will need to reconsider bidding in auctions from now on. The fees just make it not a good way to add to my collection.
Contrast this with E-bay, where the only fee I pay on top of a winning bid is shipping. I do take shipping into account when bidding on e-bay, and have not bid on lots that had large shipping charges, or I have looked to buy multiple lots from the same seller to combine shipping and save.
I think conventional auctions have positioned themselves as serving the niche high end of the market for stamps, ceding the mid-range lots to e-bay, and the low end lots to stamp shows or mail order dealers. How long can conventional auctions survive if they are limiting there market so dramatically? How many people are out there willing to spend 30% over there bids to cover fees? Won't the fees have to increase to cover the auctions fixed costs (printing the catalog, advertising, staff, postage fees for mailing the catalogs, etc) as fewer buyers participate? Doesn't seem like a good long term future here.

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