By Peter Mosiondz, Jr.….
In Part 1 of this feature we spoke about public auctions. Now let’s turn our attention to mail bid sales and mail auctions.
The mail bid dealer does not need to concern himself with the cost and procedure of procuring an auction license. The individual who conducts a public auction must obtain such a license. You or I could conduct mail bid sales without the need to obtain such a license. What does this mean? The public auctioneer is thoroughly investigated and, in most instances, posts a bond with the licensing authorities to ensure that any claims are adjudicated fairly. Otherwise the license could be lost or suspended. This does not imply that a mail bid dealer is anything other than honest. The vast majority conduct reputable businesses. It just denotes added protection for the buyer in a public sale.
The alleged difference between a mail bid sale and a mail bid auction is that in the latter instance bids should be handled as if it were a public auction; that is, the lot is awarded to the highest bidder at one advance over the second highest bid. This is theory and not practice in some instances.
I can only speak from prior experience and will refrain from naming names. But it often amazed me that every single lot awarded from a certain mail auction firm always came in at my exact bid amount. Never did I save a thin dime. After a few experiences I switched to other firms. I stayed only with those who “played by their own rules” and awarded lots at a single advance over the second-highest bid in their books.
For the sake of simplicity we will refer to mail bid sales and mail auctions hereafter as mail sales.
These venues are in fact excellent sources of supply for obtaining coins you need for your collection. As we pointed out in the first part, you have no way of knowing how your bids stack up against others. If you knew, for example, that the opening bid is $50 then you could arrive at a clearer picture of what the coin might be expected to bring. With the “one advance over second-highest bid” in a public sale you could safely bid in the $70 to $80 range if this amount is within your budget for the particular item. Then you would have the added assurance of quite possibly obtaining the piece for a slightly lesser amount than you bid. Not so with a mail sale. As mentioned, lots are sold to the highest bidder at the amount bid. If you bid $80 and the second-highest bidder came in at $50, guess what? You win the lot at $80.
Keep in mind that opening bids and lists of prices realized will not be given in most instances. There are a few exceptional firms that do provide one or both services.
Just as in public auction sale catalogs, read and understand all the terms and conditions of sale. Is there a return privilege? Will a return be accepted if it is a matter of your not agreeing with the seller’s grade? On the subject of grading, be sure that your grading standards match the sellers. Usually in public auctions, most coins are illustrated in the catalog or the bidder has an opportunity to view the lots beforehand. Not so with mail sales. I don’t know of any mail sale operator who allows inspections before the sale. And the vast majority of mail sale catalogs do not contain illustrations of the coins being sold. Be careful in every aspect of your bidding.
I’d like to share with you how I prepare myself for an auction, whether it be the public event or the sale conducted by mail.
- I make sure that I have read and understood the seller’s terms and conditions of sale.
- In a notebook I jot down the name of the firm, sale date and buyer’s fee.
- I make two columns on the notebook page. In the left column I enter the lot numbers of those items I simply must have. In the other column are the lots I would take at a real nice price.
- I then take a careful look at my budget and enter the figure I can safely spend at the top of the page.
- Finally, I circle the lot numbers that I will actually bid on and at what price.
For the “right price” column I will enter a figure that is about 20% less than the prevailing retail value for that coin in that grade. Sometimes you can obtain a bargain in an auction sale. This is particularly true in a mail sale where the seller, and owner of the coins, might need money and is willing to sell off as many coins as possible, even at prices less that retail but still enabling a profit.
I obtain pricing information from the Trends listing in Canadian Coin News, prices in the Charlton Catalogue, dealer price lists and previous auction sales. This where a list of prices realized along with a public auction catalog comes in handy. Sometimes I’m in doubt as to a correct valuation. Maybe the coin has not appeared for quite some time in that particular grade. Or maybe I see three widely different prices in my files. I’ll call the auctioneer and ask for an estimate of what the lot is “expected” to bring. This is not the same as asking for confidential bid information and it seems to work best with the public auction firm.
It is always suggested to bid early, especially in a mail sale. In case of a tie, the first bid received is given preference. Always double-check your bid sheet for accuracy before mailing it in. Most importantly, have fun.
Until next time, stay well and enjoy your hobby.