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LATEST
UPDATE: 26 March 2003
Q:
What are "Public Philatelic Auctions"?
Q:
What is an "Auction Agent"?
Q:
Why should I employ the services of an Auction Agent when bidding
at a public auction?
Q:
How do I give my bids to my Auction Agent?
Q:
Can I give my Auction Agent a "Buy Bid"?
Q:
Can I place a limit on the amount that I want to spend at any
particular auction?
Q:
Will you advise me as to whether or not you already have a bid for
a lot in which I have interest and, if so, will you disclose to
me your high bid on the lot?
Q:
What happens if we receive a tie bid for a certain lot at the same
auction?
Q:
If I have friends bidding through your agency on material of interest
similar to mine, would you "Cross Off" bids on lots identical
to all of us bidding through your offices, such that we could possibly
purchase the lots at advantageous prices?
Q:
How will I know the results of my bidding?
Q:
How do I pay for lots purchased at auction by an Auction Agent?
Q:
When do I pay the Auction Agent Commission?
Q:
What is an "Unreserved Auction"?
Q:
What is a "Reserved Auction"?
Q:
What is an auction having "Hidden Reserves"?
Q:
When did auctions begin?
Q:
When did "Philatelic Auctions" begin?
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Q: What are "Public Philatelic Auctions"?
A: A public philatelic auction is a sale that is open to
those of the general public having interest in the items being offered
sold to the highest bidder. Virtually all localities require that
the auction be conducted by a licensed auctioneer, although the
vigor of enforcing the local auctioneer’s laws varies widely,
dependent on the geographical venue of the sale.
There are no entrance fees for attending a public auction, and one's
presence does not demand that one has to bid at the auction, or
even register to bid at the auction. In some cases, because of the
high profile of the material being offered, an auctioneer may restrict
the attendance by requiring reservations for the sale, or the auction
may be conducted by invitation only.
In all cases of public auctions, the "Absentee Bidders"
(also referred to as "Book Bidders" or "Order Bidders")
are auction house clientele who have entered written bids with the
auction house either by mail, FAX or E-Mail. These bids are entered
on the "book", meaning that the auctioneer is representing
the absentee bidders against potential floor buyers, and the auctioneer
executes the bidding of the "book bidders". In the case
of duplicate bids being received from "absentee bidders"
for the same lot, the first bid received earns precedence
over identical bids received at a later time.
Unless there are no bids on a specific lot, the auctioneer "opens"
the bidding on the lot at one increment over the second highest
"book" bid, and bids against the floor participants on
behalf of the highest book bidder. In order to successfully purchase
a lot, the floor buyer must purchase an auction lot at one increment
above the high bid of the book bidder. In case of tie bids against
the floor bidder, the book bidder always prevails.
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Q: What
is an "Auction Agent"?
A: An Auction Agent is a professional providing personal
representation at the public sales on behalf of collector and dealer
clientele. The agent serves many purposes, from assuring that bids
are held confidential, to viewing and otherwise analyzing lots on
behalf of the client previous the sale. The agent's fees are not
paid until purchased lots are received and accepted, allowing the
client to deduct commissions due for any lots that have to be returned
to the auctioneer, for whatever is the reason for their return.
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Q: Why
should I employ the services of an Auction Agent when bidding at
a public auction?
A: The
reasons for employing an agent for personal floor representation
at a public philatelic sale are many, the most obvious being that
only you and your agent (the "Buyers") are the only parties
aware of your intended maximum bid for an auctioneer’s (the
"Sellers") offering.
At a public philatelic auction, the auction agent represents the
Buyer, attempting to purchase an item at the lowest possible price,
while the auctioneer represents the Seller, attempting to sell a
lot at the highest possible price. The value to you using an auction
agent will be self-evident after bidding in several sales to determine
whether such services are to your philatelic and monetary interests.
As an aside which speaks of itself, over the 30 years that we have
been in the auction agent profession, virtually every worldwide
major philatelic auctioneer having a retail operation, or requiring
specific items for themselves or their clientele, has employed our
services for auctions other than their own.
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Q: How
do I give my bids to my Auction Agent?
A: For any auction that we service, you would Telephone, Mail,
E-Mail or FAX your bids to our offices, advising whether the bids
are "Firm" (Maximum Bids), or "Break Ties" (advancing
an additional increment, if necessary). For those clients having
Internet access, we would preliminarily report the results of your
bidding via an E-Mail, confirmed by an audited mailing of the report.
Bids should be submitted at the proper "Increment". Bidding
increments at specific levels differ greatly, and are at the discretion
of the individual auctioneers; the required bidding increments for
the individual sales are found documented in the auctioneer’s
catalog. If a bid is received and is not at the proper increment
for the sale, we will adjust the bid upwards or downwards to the
nearest proper increment.
It is always very much appreciated if your bids are received as
far ahead as possible for an auction. Our E-Mail, FAX and Telephone
systems are available 24 hours/day, 7 days/week, all year. All E-Mail
and FAX correspondence is acknowledged as being received.Messages
given to our multi-function, voice-activated telephone message memory
center are replied to within the earliest possible time period.
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Q: Can
I give my Auction Agent a "Buy Bid"?
A:"Buy
Bids" reflect a bidding tactic whereby a bidder instructs an
auction agent to purchase a lot regardless of the ultimate Hammer
Price.
We do not accept "Buy Bids", as the practice can become
not only uncomfortable, but transactionally deleterious to all the
parties involved. In place of a "Buy Bid", we suggest
that a specific maximum bid be given — the bid can be many
times a multiple of the lot’s catalog or estimated value, assuring
a very good opportunity to secure the item.
If an misdescribed rarity or otherwise valuable item is offered
by an auctioneer at a low estimation because it is not recognized
for what it is, in lieu of a "Buy Bid", the bid should
be commensurate with the item’s known value (we have purchased
unrecognized rarities for as low as 4% of the bid given to us, with
the purchasing of such unrecognized philatelic gems frequently being
at the 5%-15% of the bid level for the similar items).
The client does not expect to pay his maximum bid for the lot but,
if it reaches that level, the client is prepared to pay same. Conversely,
there is always the possibility that a such very high bid still
may not purchase the lot, although such losses have seldom been
encountered in our 30 years in the philatelic auction arenas.
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Q:
Can I place a limit on the amount that
I want to spend at any particular auction?
A: If you wish to place a limit on the amount that is to
be spent at an auction, we must be informed at the time that your
bids are being given to us. Simply state your limit amount (Example:
"Limit $1000"). We may not be able to meet the exact amount
that you wish as a limit, but will strive best can using a +/- 10%
target for your aggregate limit bids (Example: "Limit $1000"
allows us an approximate purchasing range of $900-$1100).
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Q: Will
you advise me as to whether or not you already have a bid for a
lot in which I have interest and, if so, will you disclose to me
your high bid on the lot?
A:
All bids received from clientele are confidential, and are not disclosed
to other clients, nor to any other third parties. Also, all bids
are recorded and documented in the order received, with the earliest
bids received earning priority over duplicate bids received at a
later time.
In the case of bids on the same lot (Example — Lot 123: "Client
A at $200"-Break Tie, and "Client B at $300"-Break
Tie), and if the auctioneer’s book stops bidding at $170, we
would jump the book bid to a proper increment of $210, awarding
the lot to "Client B". This procedure is fair, equitable,
and ethical to all parties involved, as it would be inappropriate
and improper to award the lot to "Client B" for $180.
Further, we couldn’t justify to "Client A" that a
lot with his given bid of $200-Break Tie was awarded to another
client for $180.
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Q: What
happens if we receive a tie bid for a certain lot at the same auction?
A:
We receive numerous bids for all the public auctions that we service.
We do have a large number of clientele and, at times, do receive
bids on the same lots at any one particular auction. As detailed
previously, all bids are recorded and documented in the order received,
with the earliest bids received earning priority over duplicate
bids received at a later time.
In the case of tie bids on the same lot (Example — Lot 123:
"Client A at $300"-Break Tie, and "Client Bat $300"-Break
Tie), and if the auctioneer’s book stops bidding at $170, we
would jump the book bid to a proper increment of $325, awarding
the lot to "Client A". This procedure also is fair, equitable,
and ethical to all parties involved, as it would be inappropriate
and improper to award the lot to "Client A" for $180.
Further, we couldn’t justify to "Client B" that a
lot with his given bid of $300-Break Tie was awarded to another
client for $180.
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Q: If
I have friends bidding through your agency on material of interest
similar to mine, would you "Cross Off" bids on lots identical
to all of us bidding through your offices, such that we could possibly
purchase the lots at advantageous prices?
A: "Crossing Off" client bids on lots is not only
unethical and unfair to the lots’ consignor and auctioneer,
it is also very illegal. We will not "Cross Off" bids
between our clientele at any time, nor for any reason.
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Q: How
will I know the results of my bidding?
A:
For those clients having Internet access, we would preliminarily
report the results of your bidding via E-Mail within two days of
the final session of the auction; the E-Mail is confirmed by an
audited mailing of the report.
The mailed (or FAXed) audited "Statement of Account" report
will detail the results of your bids and, whenever possible, will
include additional data for lots that were bid upon, and not purchased.
If a lot is not purchased, notations will be made indicating whether
the lot sold to the "Book" (to a Bidder giving Bids to
the Auctioneer), sold to a "Floor Buyer" (identified whenever
possible), whether the lot remained "Unsold" (the lot
is "Passed", as the Reserve Price for the lot, if existent,
was not met), or whether the lot was "Withdrawn" from
the sale (when
known, reasons for a lot’s "withdrawn"
will be noted).
Your personal "Statement of Account" will report your
purchases as $US. However, if the auction in which you participated
was conducted in another country using an alternate currency ($C,
£ Sterling, the Euro, $HK, $A, $NZ, SFr, Japanese ¥,
the Rand, etc.), the report will be documented in the currency of
the auction’s geographical venue, and then will
be converted to $US using the official New York Bank Exchange Rate
in effect on the day
of the sale.
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Q: How
do I pay for lots purchased at auction by an Auction Agent?
A:
If lots are purchased, they (or an invoice first) would be forwarded
by the auctioneer. If invoiced first, please pay the auctioneer’s
invoice, and await the shipment of the lot(s) for acceptance. If
the lots are included together with an invoice, please pay the invoice
in a timely manner once the received lots have been examined and
accepted.
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Q: When
do I pay the Auction Agent Commission?
A:
The commission due for successfully representing you as your agent
at the sale is detailed on your "Statement of Account",
and is not remitted to us until you have received and accepted the
lot(s). If a lot (or lots) has to be returned to the auctioneer,
for whatever reason that it is returned, the commission for the
lot is deducted from the statement. And, there are no minimum fees.
In the case of a lot submitted for expertization to an auctioneer-acceptable
competent authority (the Philatelic Foundation, PSE, the RPSL, etc.),
payment for the item declared being genuine as described is not
due until the item is returned from the expertizer. If the item
is judged as not being as described and is returned to the auctioneer
as such, there are no commissions due for the lot.
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Q: What
is an "Unreserved Auction"?
A:
A totally unreserved auction is one that sells lots at whatever
the item brings on the public auction floor from the highest bidder
for the material. In the purest sense, and if there are participants
represented by mail bids, the lot is sold at one increment over
the highest mail bid. Very few auctions are conducted on an "unreserved"
basis.
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Q: What
is a "Reserved Auction"?
A: Several philatelic auctioneers in the U.S.A., Great Britain,
and on the European Continent, have reserves declared for their
auction lots —the minimum price the auctioneer will accept
for the item. Terminology for lots being offered in such fashion
would include "Minimum Bids" or "Starting Bids"
in the English-language catalogs.
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Q: What
is an auction having "Hidden Reserves"?
A:
Although not necessarily detailed nor generally explained in the
public auction catalogs, virtually all auctioneers maintain Reserve
Prices for lots offered at auction, such non-stated minimum acceptable
bid practices being termed "Hidden Reserves". The
non-stated "Hidden Reserve" is the minimum price
the seller of the lot will accept, and bids below the reserve are
ignored.
Many auctioneers declare in their terms or editorials that they
assume the privilege " ... to discard any bid not commensurate
with the value of the item, or that a (low) bid is construed to
have been entered in bad faith ... ". Some auctioneers
will directly state in general terms that " ... bids below
$xx will not be accepted for any lot ... ". Regardless
of the terminology, when such dictums are documented, the auctioneer
is pointedly informing the potential bidder that "low"
bids, those being of a small fraction of the catalog or estimated
value, are not acceptable in their sales.
Exceptional quality,
or other desirable stamp attributes such as rare cancellations,
enhance a stamp's value, and will normally result in a knock-down
realization being a multiple of the stamp's catalog value. It is
not unusual to have an outstanding quality classical stamp or rare
cancellation fetch up to 10-or-20 times or more the current catalog
value for the item, in many instances outpacing what could be construed
as being a "high valuation" given by the auctioneer.
Valuation of postal history lots appear to be problematical to many
bidders. Unlike postage stamps, catalog values for items such as
covers are only a small contributor to the item's true worth, as
overall physical condition, usage, postal markings, destinations,
auxiliary handstamps, and many other attributes collectively govern
their worth.
Stamps of exceptional quality, specialized items unlisted in standard
catalogs, or items reflecting rare postal markings, and postal history
of all sorts, normally are valued by the auctioneer with an "Estimated
Value" or "Suggested Bid" designation. German-language
catalogs normally use the term "Schätzpreis"
to indicate an Estimated Value. These entries are based on the auctioneers
experiences and knowledge, and/or the Consignor's requirements,
and/or the provenance (previous ownership) of the item.
A potential bidder may comment on the estimation as being "too
high" (or, in rare instances, "too low"), but the
fact remains that the item will not sell much below the estimated
valuation because of the "Hidden Reserve". However, these
estimations are prepared from information available at the time
of lotting, and are subject to the auctioneer's revision should
new valuation data come to light. Such valuation revisions normally
are announced from the podium at the time that the lot is being
offered to the participants in attendance at the auction.
Because of the non-stated "Hidden Reserve", only very
rarely will an item in this category sell far below the percentage
of the estimation. One auctioneer openly declares in the "Terms"
that every lot must be assumed to have some type of reserve price.
In many cases, such an item will reach a price far surpassing the
auctioneers estimation. As with stamps denoted by catalog values,
it is pointless to bid a fraction of the auctioneer's estimated
valuation for an item.
Some auctioneers will indicate from the podium that a lot has not
reached the "Hidden Reserve" requirement. In this case,
if the lot has no acceptable book bids, the lot is opened at the
"Hidden Reserve" price, and if there is no floor action,
the auctioneer will announce "Pass", "Bought
In", "Unsold", "Returned to the
Owner", or similar terminology. The term "Withdrawn"
is also used to indicate unsold lots, but in many areas a "withdrawn"
lot will indicate an item that has been misdescribed, has been damaged
after being lotted, has been lost, or has encountered some other
type of mishap.
Many
auctioneers will announceat the beginning of a sale that "unsold
lots" will available for purchase at the "opening price"
after the sale, assuming that they are not sold to the floor at
the "opening price" or higher. Many other auctioneers,
primarily in Europe, issue and provide "Prices Realized"
by mail or a web site very quickly after an auction. Those lots
that remain unsold are designated as such in the listings, and interested
parties are advised to contact the auctioneer to purchase the lot
at the "Hidden Reserve" price.
Apparently, much auction material is purchased in these post-auction
transactions. Such purchases are deemed of obvious benefit in many
quarters, but are chancy should a potential bidder want to purchase
an especially desirable item in such a manner. Rather than bidding
for the lot on the auction floor with a chance of success, the buyer
of the lot could be another floor bidder willing to purchase the
item at the opening (or higher) price.
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Q: When
did auctions begin?
A:
Public auctions comprise one of the world's oldest marketing contrivances,
and date back to the time of the Babylonian Empire. Auctions have
been employed worldwide to dispose of every likely kind of goods,
from fish, flowers, rare books and slaves, to real estate.
Theoretically, auctioning connotes that prices are bid upwardly
until a single bidder remains, the definition being derived from
the Latin-root word auctio, meaning "an increase". There
are, however, two major exceptions to this generally accepted definition
of an auction:
Dutch Auction:
The
Dutch Auction: The Dutch Auction is an auction having but
a single active bidder. The item being sold is called out at a
maximum starting price, and descends by increments until the winning
buyer places his bid. This type of sale also is also noted as
being a "Mineing Auction", whereby the successful buyer
shouts "MINE!" when the lot is purchased.
Japanese Fish Auction: The Japanese Fish Auction is a simultaneous
auction, whereby each bidder for a specific lot states their bid
at the same instant, with the highest bidder being the successful
buyer of the lot.
According
to The Histories of Herodotus, auctions existed in Babylon
as early as 500 B.C. At an annual ceremony, women of marriageable
age were sold on the condition that they be wed. When attractive
maidens were offered for sale, bidding was brisk, and high prices
were realized. However, when girls considered as being less attractive
by Babylonian standards were placed on the auction block, those
seeking wives accepted them only if their acceptance was accompanied
by monetary compensation from the young lady's owner! In this instance,
the transaction was accompanied by a side auction for the dowry,
with successful reductions in bids until the auctioneers reached
the minimum amount they would accept for the unfortunate young lady.
There were four categories of personnel employed in the conducting
of public auctions during Roman times, when the sales were held
in an atrium Auctionarium. The Dominus (who owned
the property), the Argentarius (who organized the sale),
the Praeco (who conducted the bidding), and the Emptor
(who was the successful bidder). An identical cast of characters
comprise today's philatelic auction: the Consignor, the Auction
Company, the Auctioneer, and the highest Bidder.
The term "auction" is recorded as formally entering the
written English language in the latter part of the 16th Century,
while the "auctioneer" is first recorded in 1708 as being
the agent who sells goods of all sorts at auction to the highest
bidder.
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Q: When
did "Philatelic Auctions" begin?
A:
According to the renowned British philatelic authors L.N. and M.
Williams, the first recorded philatelic auction was held in Paris,
France, on 29th December 1865. The sale consisted of the stock of
a stamp dealer by the name of "Elb". The stamp stock fetched
a total realization of 800 Francs.
The first philatelic auction in the United States was held five
years later. On 28th May 1870, John Walter Scott organized a sale
held in the Clinton Hall Book Sales Rooms in New York City. The
auction included a 5¢ Hawaiian Missionary stamp that was sold
for $11, and a collection of 1,800 stamps that realized $38. The
bid on the first lot of the sale, which was comprised of 100 foreign
stamps, opened at 25¢, and was hammered down at 60¢. The
sale realized $477.04.
From this point onward, public philatelic auctions never looked
back, and have continued their expansion to this day. Starting with
the famous Count Ferrari sale immediately after World War I, virtually
all of the world's great philatelic rarities have been offered through
an auction firm. The Ferrari auction led to the well-known auction
happening — the "name" sale.
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