When I first began working as an auctioneer, most bidders (and buyers) were collectors.
Mary collected McCoy pottery; Tim collected B&G plates; Roberta collected pink depression; Jerry collected Hummels; Frank collected pocketknives and fishing lures … and so forth.
In fact, many bidders at auction in the 1980’s carried around collector price guides, and often bid nearly book value — if not a bit more — when an item was needed to “complete a collection.”
However, today it seems in the antique, collectible and household type auctions around the United States, most of the bidders are buying to resell, rather than collect.
In fact, it appears to many auctioneers that we’re standing with the kids of these parent-collectors and being asked to sell the very same items that were purchased “to keep” 30 years ago.
What does this mean for sellers of such items in 2013? It probably means lower prices.
When a bidder is buying to resell, he or she can only bid up to a certain amount, allowing for a reasonable profit. For instance, if a reseller can likely sell a 1960’s aluminum tea set for $100 in his shop, or online, he can only play maybe $40 – $50 for it so that he can cover his costs of sale and profit.
“Costs of sale? What are those? sellers sometimes want to know.
Let’s take a reseller who has booths at 3 different antique malls.
This 1960’s aluminum tea set will sell for about $100, or maybe a bit less. If he buys it for $40 he has to pay for:
Time and travel costs for attending the auction
Time and travel costs to/from the mall
Rent on the booth
Time spent rearranging his booth’s items periodically
Lost opportunity cost — he could have spent this $40 on something else more profitable
Lost opportunity space — this space in his booth could be used for something else more profitable
Loss, damage and/or depreciation
Antique mall commission or selling fee
Lost value of money — inflation discounts future profits
If this buyer hopes to profit, all these expenses plus his profit cannot exceed $60. And for many auction buyers, it often does exceed …
Of course, some auction sellers outwardly wonder … “I saw a similar tea set in a mall a few months ago priced for $100. Why did this “same set” at my auction result in a bid of only $40?”
Exactly.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.
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