Having now held at least a dozen auctions since acquiring Manshed Auctions (and participating in hundreds more as a collector and buyer), a few potentially useful ideas come to mind as I consider what I’ve learned.  In this blog, I am focusing on consignors/vendors, the folks who bring in or send to us their items for auction.

First, reserves should only be used if absolutely necessary.  Having said that, my predecessors did not indicate if there were any reserves at all on their items and would consequently only indicate at the end of a lot if the unsaid reserve had been met.

In my view, this punishes buyers.  I would hate to sit watching or listening to an auction for hours at a time, think that I’d won a desired item and then learning that the item wouldn’t be coming my way.  It may not be unethical or illegal in anyway, but it’s not transparent and it leaves too much to the subjective “whim” of the auctioneer and his auction house.

So, sure, reserves should be used where appropriate, particularly for high-value items, however they should be used with appropriate discretion and, above all, be REASONABLE.

This brings me my second point.  Recent vintage motorcycle auctions have had bikes which have not moved on auction day because consignors have had unrealistic views of the value of their bikes.  They have sometimes failed to realise that the demand for vintage bikes (and vintage collectables) is continuously shrinking whilst supply is increasing.  This is partly a result of the demographics of the baby boomers coming through with their collections whilst at the other end of the supply/demand continuum, there are often far fewer, younger collectors coming through.

Thus, for bike auctions to work, consignors need to have realistic views about the value of their bikes, understand that auctions have “swings and roundabouts” as the market determines what actual values/prices should be, and that flexibility is required in the reserves themselves and in post-auction negotiations with customers if such negotiations arise.

Consignors should ideally consider themselves “partners” in the auction.  The goal should be win-win outcomes.  Consignors win by selling their bikes for reasonable sums that the market considers appropriate.  Buyers win by obtaining nice bikes for fair prices.  And the auction house wins through creating such positive outcomes for both buyers and sellers.

In conclusion, without reasonable, appropriate, flexible reserves and a preparedness from consignors to understand that the market will pay what the market thinks fair (and this is currently impacted by challenging macro economic conditions), everyone will work hard with little to show for such work.