The Gold and Silver Mine
A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.
With rare coins, currency and (soon) stamps setting record prices in auction, the logical question one has when considering selling a collection “is selling through an auction house going to get the most value for my collection?”.
Once again there is no simple answer to this question, so let me share some of my experiences, having dealt with the major auction houses, Christie’s, Sotheby’s and Heritage, just to name the majors.
First and most importantly when an auction house publicizes a record price for something in their auction, there may be hundreds or even thousands of other items in that same auction that may or may not reached expectation, let alone set records.
Auction houses typically will only accept items of a minimum value, and even then, lower value items will be responsible for a higher percentage commission on the sale price.
Now, about commissions. Commissions are how an auction house makes money while covering their expenses, which among other things include labor, handling of auction items, printing catalogs and conducting the actual auction plus collecting the money afterward. Commission typically vary from 10% to 20% of the sale price, the lower the value of the item, the higher the commission, and are collected from both the buyer and seller. An example would be if a coin were to be auctioned with a final bid of $1000, at 20% commission, the buyer would pay $1200.00 and the seller would receive $800.00, the auction house getting $400.00, the difference, for their effort.
And then there’s the wait time for to get paid. A typical time line is first contacting the auction house to discuss your items. Then you must send or deliver your items which will be cataloged and scheduled for auction, the date to be determined by the auction house. Then, once the item has been sold, you may wait an additional 30 to 60 days before you receive payment since the auction houses offer 30 day payment options to their bidders.
And the main thing to consider is there is no guarantee that you receive the price you expect. Since most auction houses will not allow you to place a reserve price on your items, (or if they do allow that, you will be responsible for the commission on your reserve price if the item doesn’t sell) you must accept whatever your item brings at auction, less commission. Also they will not allow you to bid on your items so you can’t drive the price up. Depending on the auction house and the market, the price realized can be disappointing. I have seen auctions where there were so many items offered, that there were not enough bidders to absorb everything, and the bid prices were lower than the market price.
So is sending your items through auction a guarantee you will get the best price? Unless you have something of great rarity, probably not. Negotiating the sale of your items with a dealer has many advantages, first and foremost if you don’t like the price offered, you don’t have to sell. And if you do agree on a price, you will be paid immediately, no waiting.
This is not to say auction houses are not a viable option, but one must exercise care when deciding to go that route. I have used auction houses in the past with a degree of success, but I’ve also experienced some major disappointments.
Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old WaWa building just past the former Cardiff Circle. The also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.
The Gold and Silver Mine 