By Jeff Garrett for Numismatic Guaranty Corporation (NGC) ……
The last two years have been challenging in so many ways for everyone worldwide. The COVID-19 pandemic has changed the way we all conduct our lives. Substantial parts of the workforce are still working from home and companies in all economic segments are re-inventing how they do business. At the center of this global change is the internet. It is safe to say that nothing has ever impacted numismatics in such a profound way. The advent of third-party grading was huge, but still a distant second in my opinion.
Undoubtedly, the COVID-19 pandemic has led to a huge boost for numismatics. The market for rare coins is amazingly strong across the board. I have become acutely aware of this in recent weeks doing my annual pricing for the Guide Book of United States Coins (Redbook). Nearly every series saw a price increase from last year. Some series, such as Morgan silver dollars, have increased substantially.
Nearly every company with a substantial web presence has been experiencing a massive increase in business, including rare coin auction companies. Billions of dollars trade hands each year through auctions, and for the first time, most of it is online only.
One of my favorite numismatic stories of the distant past is about the legendary collector John J. Pittman. In the 1950s, he desperately wanted to purchase an example of the extremely rare 1854 Type-2 Gold Dollar Proof being sold at auction. When the coin came up for sale, he famously stood facing the audience with his hand raised in the air like the Statue of Liberty. This intimidating tactic worked, and he purchased the coin. The coin stayed in his collection for his entire life and was sold after his death. I later had the privilege of selling this coin to the collector Dell Loy Hanson.
If the coin were to be sold today, John J. Pittman would probably be facing an empty room. His scare tactic would not work, as most important buyers are now bidding from the comfort of their home or office.
For generations, collectors and dealers alike have eagerly anticipated the annual ANA convention and auction sales. These annual auctions have traditionally been a cornerstone of the event. Years ago, several auction companies even held important rare coin auctions the weekend before. These so-called “Apostrophe” Sales were sometimes bigger events than the ANA-sanctioned sales. In years past, every night, for over a week, was consumed by live rare coin auctions.
The 2021 ANA convention changed all that for the time being. Heritage Auctions and Stack’s Bowers chose to display auction lots at the show and conduct the ANA sale the following week only online. This has opened an interesting debate about the future of live coin auctions that have been an integral part of rare coin conventions for over 100 years.
In 2013, I had the honor of successfully bidding on the Walton 1913 Liberty nickel. The room was packed with spectators, and you could feel the excitement when the coin came up for sale. After winning the lot, I was besieged by the numismatic press and had the pleasure of personally receiving thanks from the Walton family in attendance. It was one of the most exciting nights of my numismatic career. Sadly, this sort of numismatic experience may be a thing of the past.
The pros and cons of major auctions moving entirely online have been extremely interesting to contemplate. I have experience with the subject as both a buyer and seller. Despite the lack of excitement that goes with experiencing a live sale, I enjoy the greatly enhanced tools available for online bidding. Having the final purchase price (including buyer’s charges) clearly stated as you bid is vital when making quick decisions. I found it a nearly impossible task bidding live when buyer’s charges were 17.5%. You had to be a savant to figure that in your head!
The price guide and population information available online for each lot is also an amazing time saver and financial tool. One of the biggest impacts of the internet for numismatics has been the availability of information at your fingertips. Information has leveled the playing field for collectors and dealers alike when competing for material.
I personally like focusing on the show during the day and not having to worry about attending an auction that evening. Lots of my fellow dealers have told me they think having the actual ANA sales the following week is good for the show and the auctions. The subject may be debatable, and it will be interesting to see how companies handle this in the future.
When contemplating this article, I reached out to many of the major players in the rare coin auction business. The following are edited versions of their response to my inquiry about the future of live coin auctions. The answers are in the order of when they were received.
Greg Rohan – President, Heritage Rare Coin Auctions
Good question, and something we discuss often.
Heritage didn’t miss a beat when COVID started because we already had an easy and intuitive online platform. Great images and an easy bidding experience were key to our selling $850 million online this past year without needing the live sales component. There was no hesitancy by our clients bidding online on seven-figure lots. Gone are the days of spending time and money traveling to an auction venue then sitting thru multiple eight-hour sessions, because now you can confidently bid your maximum with Heritage Auctions with secret proxy bids or live with Heritage Live.
The future is now, and last year especially showed us it’s about giving the bidder as much information as possible, saving them time, and making it easy to bid.
Laura Sperber – President, Legend Auctions
Legend Rare Coin Auctions is bucking the trend of online sales and staying with a catalog-and-show format. It does appear the bigger firms will be doing only online auctions just about weekly. We will not. We want our sales to be special and premium sales. Plus, we know people LOVE the catalogs!
The pros of a live sale are the show-collector excitement. More people can view the coins. Makes for a stronger sale. The cons: These days, a majority of people buy sight UNSEEN and do not even go to shows.
Yes, the auction world has changed forever.
Brian Kendrella – President, Stack’s Bowers Galleries
Regarding live auctions at coin shows, we have heard almost unanimous appreciation for the change to holding the auctions after the show. In today’s robust market, it is too much for even the most efficient dealer or collector to successfully manage the bourse, lot viewing, and auction. Moving the auction to the days after the show allows for those attending to comfortably do their bourse activity and lot view. I also believe this strategy leads to more bids and higher prices as collectors and dealers aren’t distracted by other numismatic activities while the auction is happening.
Even pre-COVID, we saw fewer and fewer of our clients bid live on the auction floor. The bidders who would traditionally bid live were now doing so from the comfort of their hotel room or while at dinner with friends. Our live bidding technology is so good, so easy and convenient, that even the few who did bid in the auction room, many did so from their laptop or phone! Early in COVID, we recognized that the auction landscape would change, and we began building a television studio in our new world headquarters. From our new Griffin Studios, we can deliver a much more engaging, entertaining, and competitive bidding experience for those who are bidding online, which was quite nearly all our clients! We are quite proud of this innovation and believe we offer the best live online bidding experience in the industry as a result.
We will continue to selectively have auctions at coin shows.
For example, we will be hosting our auctions live from the NYINC in New York next month. When we are allowed to return to Hong Kong, I anticipate hosting our sales live there. Those venues are different than a traditional US coin show and we have historically had very active and well attended live bidding audiences, and there is value to doing the sales there live. Also, if we receive an appropriate collection that will benefit from us hosting the auction live at a Baltimore or ANA show, we will.
John Brush – President, David Lawrence Rare Coins
At David Lawrence Rare Coins, we ran a trio of live auctions for the Richmond Collection in 2004 [and] 2005 that totaled around $24 million — at the time, one of the highest dollar amounts ever realized for a single collection. While we have the technology to run a live auction at any time, we’ve found that there are many unnecessary expenses that go along with live auctions that simply take money out of the buyer’s and seller’s pockets. Furthermore, the results of internet auctions over the past five to 10 years and, more recently, the results of the COVID-19 pandemic have proven that the live auction experience isn’t really necessary. Coins can be displayed, viewed, and bid on outside of the live auction event, which shows us that technology is far more important now.
At DLRC, we’ve focused on photography, live interactive experiences with coins with nuTilt imaging solutions, and improving customer service overall, as these are the factors that drive results. While I often attend live auctions when bidding on coins for the Hansen Collection, I often find myself to be nearly the only person in a large room that is actively bidding. For better or worse, these long, lonely nights with the auctioneer are becoming less necessary with the more nimble arena of internet auctions.
Dell Loy Hansen – Collector
I have bought quite a few coins in live auctions and from internet auctions. While I’ve enjoyed attending live auctions, and I really like the action of an auction process, I’ve found them sometimes to be extremely long, and they become unenjoyable. I would much rather buy coins directly without the auction process, but sometimes this isn’t an option, so I have no problem bidding online when I have the time to do so.
Ian Russell – President, GreatCollections Coin Auctions
At GreatCollections, while all of the bidding process happens online, we still have live viewing of the coins, with clients flying in every week to view at our office, and we show coins at many of the major shows. We find this is the best of both worlds. The internet opens up coin auctions to the world (we have bidders participating from 20 to 30 different countries EVERY week). We also offer our opinions by phone or email from one of our experts — so we can pull the coin from our vaults and discuss it with a potential bidder in real-time, giving our honest opinion about every aspect of the coin.
I remember the first six-figure coin that we sold to a brand-new bidder in our first year of business. He never viewed the coin and relied upon our images. This gave me an insight into the future of GreatCollections, as we were never planning to sell a lot of coins over $10,000 to $20,000 back when I worked on a business plan in early 2011.
I knew that imaging technology was the most important aspect; we spent a significant amount of time working out how to take “real” images, showing the coins how they are in your hand. We never enhance images to artificially make them better, which is common practice on websites with very little numismatic oversight (like eBay, Amazon, etc.). We even auctioned the finest 1893-S Morgan dollar for over $2 million in August (an all-time record for the series). In fact, it’s the first million-dollar Morgan dollar, and it sold for over two million(!) and most of the bidders above $1 million did not view the coin in person.
As we see the future, more and more coin auctions will gravitate toward online-only bidding or bidding without a live floor. We saw it at the ANA last year, with both “official” auction houses choosing to hold their auctions at their respective offices the week after the show, with very little floor bidding (and almost all bidding happened online). I spoke to one of the auctioneers who calls the auctions for hours, and he mentioned it’s a new challenge for him to maintain the excitement without having live people on the floor. Instead, he is looking at computer monitors. It even changed from his standpoint. GreatCollections has grown each year since we launched in 2011, and our sales this year are expected to exceed $225 million.
In summary, you can tell from the above responses that live rare coin auctions, as we remember from the past, will be very different from now on. Technology and consumer behavior have combined to make attending an auction in person unnecessary for most dealers and collectors. Lot viewing is another matter, and even though some feel comfortable buying coins based on photography, a lot of buyers want to see coins in hand before bidding. Most of the companies above have invested heavily in state-of-the-art photography to offset this concern.
The future of live rare coin auctions will continue to evolve as rare coin companies compete using every technological edge they can muster. Sadly, a room packed full of bidders is likely a relic of the past.
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Great topic and fantastic article.