hmmmm........blatant shill bidding on an Internet coin auction house?

[Doogy]

There is a certain online coin auction that runs almost every week, and there is something that has caught my attention. If the coin doesn't sell, it appears again in the next auction (like commonly happens on Teletrade, although the auction venue i'm referring to isn't TT). However, usually when it re-appears for sale the next time in the auction, it isn't long until there are lone bids on the items that didn't get any bids last time, or didn't quite meet reserve. What is fishy is that these auctions say that the reserve will be met on next bid, usually not more than a few dollars more (one coin I looked at had close to a $700 bid, and the reserve was apparantly $715 as that was the next minimum bid allowed). I have seen some coins recycled into five and more auctions with this auction house, each time earning one bid that was just a hair away from meeting reserve (and the glaring prompt saying that the next bid will meet reserve).

 

The funny thing is when you see several coins like this in a row, on one page, and you start to wonder what person for the company or someone close to company enters these bids that are close to, but not quite the reserve? Does anyone but me find this to be blatant shill bidding, and unethical?

[MarkFeld]

Some auction houses automatically set the bidding such that the next bid will meet the reserve. I am guessing that is the situation you are seeing and personally, I don't consider that shill bidding. I actually much prefer that to bidding against a reserve that is not disclosed and not knowing what amount you need to bid in order to meet the reserve.

[Doogy]

Some auction houses automatically set the bidding such that the next bid will meet the reserve. I am guessing that is the situation you are seeing and personally, I don't consider that shill bidding. I actually much prefer that to bidding against a reserve that is not disclosed and not knowing what amount you need to bid in order to meet the reserve.

 

Mark,

 

If you're talking about the ebay method where you have the minimum bid set; say it starts at $99.00 for example. That is the minimum you'll accept for someone to post THEIR first bid. when you start the auction, you're starting price is not considered a formal bid and when you look down at the number of bids it will read '0'. The difference i'm speaking about is that the auction starts at $0 with no bids, and then they start to magically appear are just a hair away from meeting reserve, perhaps coaxing people to place the next bid that is just a few dollars short of meeting the reserve.

 

to me, I see the latter (and what i'm talking about in this case) to be blatant shill bidding by the seller. They should really be more transparent and make the opening bid amount be a specified amount with a bid total that also reads '0', like the ebay example used above. I have no problem with the verbage to the side of that amount that states that the reserve is the next bid, but starting out at $0 and adding a fake bid amounts to something weird, IMHO.

 

A "bid" should be by a person actually INTERESTED IN BUYING THE COIN, not the company selling or their proxy. eBay won't let you bid on your own material (in this case, an auction started at $0 dollars), and i think it is unethical to ask your own proxy (friend, relative, et cetera) to bid it up just short of the reserve price.

 

Doug

[MarkFeld]

Doug, I was speaking of Heritage (and any other company that sets the bidding the same way). If, for example, a consignor has a reserve of $1000, a bid is automatically placed at one increment below that amount ($950?) and a note appears that the next bid will meet the reserve.

 

I have no problem whatsoever, with that way of doing things and don't think of it as shilling/deceptive. However, in a situation where a bidder is unaware that the auction house operates that way and mistakenly thinks bids have been placed by other bidders, I can understand your concern.

[rons]

Doogy are you referring to dlrc?

[JCM-Houston]

I'm actually pretty new to the DLRC and HA online auctions and it seemed pretty obvious to me that these coins were being set by the auction house to one bid below the reserve. Sometimes at HA you'll see Current Bid $350 - Next Bid $350, DLRC does a similar thing where it shows reserve will be met on next bid.

 

I wouldn't sell without a reserve so don't have any problems with them doing it that way. I don't think DLRC does it until a couple of days before the auctions end usually though. So I can see where someone might think it had actually been bid to that level by a real buyer. All in all I also prefer this, at least I know if I'm in with a chance to actually buy something at the price I want to pay.

[Oldtrader3]

I also prefer it when auction companies (not Ebay sellers) set the reserve prior to the auction ending instead of leaving everyone guessing what they will need to bid in order to buy the coin. It helps me make a decision on whether I want to bid or not. Plus, I know what level bid may win the coin.

[physics-fan3.14]

If there is a reserve, I want to know what it is. I don't mind that someone puts a reserve (I understand that there is a certain minimum amount you want for a coin, that's your right) I just want to know what it is so that I can bid high enough to win it. These ebay sellers that have mysterious reserves only hurt themselves, as far as I am concerned. If I see an Ebay auction with a reserve, most of the time I'll just pass it by because I don't care to deal with the hassle.

[MikeInFL]

If you are not referring to TT, what auction house are you referring to?

 

I'm not comfortable passing judgement given the information provided.

 

That said, and in my honest opinion, I have yet to find a transparent auction house free of ethical challenges...Mike

[cpm9ball]

I don't care for mysterious "Reserves" either, but maybe some sellers are just "testing the waters" to see how much interest there may be for an offering. Personally, I would rather know the minimum bid expected to win the auction rather than waste my time playing guessing games.

 

I agree with that which Mark and the others have said, but I think the issue that concerns Doogy is slightly different. Please correct me if I'm wrong, but this is the issue as I see it:

 

> A seller has listed (say) 10 items for a 7-day auction with an opening bid of "$0.00", and each item has a Reserve.

> All of the auctions end, and none of the bids met the Reserve.

> The following week, the seller relists the same items with an opening bid of "$0.00" and the same (mysterious) Reserve.

> There is bidding activity on each of the items, but none of which has met any of the Reserves.

> Suddenly, bids are placed on all 10 items, and each bid is exactly one increment from meeting the (mysterious) Reserve.

> The items still do not sell.

 

It appears to me that the seller is using a shill to bump the bids in the hope that some buyer will take the bait, and the item can be sold for the Reserve. If nobody does, then the seller can recover some of his listing fees, and repeat the process over and over again until he finds a "sucker" willing to pay his Reserve.

 

Chris

[MarkFeld]

I don't care for mysterious "Reserves" either, but maybe some sellers are just "testing the waters" to see how much interest there may be for an offering. Personally, I would rather know the minimum bid expected to win the auction rather than waste my time playing guessing games.

 

I agree with that which Mark and the others have said, but I think the issue that concerns Doogy is slightly different. Please correct me if I'm wrong, but this is the issue as I see it:

 

> A seller has listed (say) 10 items for a 7-day auction with an opening bid of "$0.00", and each item has a Reserve.

> All of the auctions end, and none of the bids met the Reserve.

> The following week, the seller relists the same items with an opening bid of "$0.00" and the same (mysterious) Reserve.

> There is bidding activity on each of the items, but none of which has met any of the Reserves.

> Suddenly, bids are placed on all 10 items, and each bid is exactly one increment from meeting the (mysterious) Reserve.

> The items still do not sell.

 

It appears to me that the seller is using a shill to bump the bids in the hope that some buyer will take the bait, and the item can be sold for the Reserve. If nobody does, then the seller can recover some of his listing fees, and repeat the process over and over again until he finds a "sucker" willing to pay his Reserve.

 

Chris

Chris, is it possible that in the scenario you described the (reserve) bids are automatically being placed at a set/pre-designated time, prior to the end of the auction and at one increment below the reserves? In the case of Heritage sales, at least, the reserves take effect in that manner.

[jgrinz]

Doogys description sounds like DLRC ... I have no problem with the way they operate in this manner. I think it actually doesn't waste anyones time this way by throwing bids at an unknown reserve. They probably do this in house so in order for the coin to sell the first bidder KNOWS what he needs to at least compete for the coin and that his bid WILL in fact meet reserve. I do not consider this a shill bidding scheme

 

 

[cpm9ball]

I don't care for mysterious "Reserves" either, but maybe some sellers are just "testing the waters" to see how much interest there may be for an offering. Personally, I would rather know the minimum bid expected to win the auction rather than waste my time playing guessing games.

 

I agree with that which Mark and the others have said, but I think the issue that concerns Doogy is slightly different. Please correct me if I'm wrong, but this is the issue as I see it:

 

> A seller has listed (say) 10 items for a 7-day auction with an opening bid of "$0.00", and each item has a Reserve.

> All of the auctions end, and none of the bids met the Reserve.

> The following week, the seller relists the same items with an opening bid of "$0.00" and the same (mysterious) Reserve.

> There is bidding activity on each of the items, but none of which has met any of the Reserves.

> Suddenly, bids are placed on all 10 items, and each bid is exactly one increment from meeting the (mysterious) Reserve.

> The items still do not sell.

 

It appears to me that the seller is using a shill to bump the bids in the hope that some buyer will take the bait, and the item can be sold for the Reserve. If nobody does, then the seller can recover some of his listing fees, and repeat the process over and over again until he finds a "sucker" willing to pay his Reserve.

 

Chris

Chris, is it possible that in the scenario you described the (reserve) bids are automatically being placed at a set/pre-designated time, prior to the end of the auction and at one increment below the reserves? In the case of Heritage sales, at least, the reserves take effect in that manner.

 

I can't say, Mark. I'm basing this scenario on my impression of Doogy's explanation. I know that DLRC, et al, routinely set the opening bid at, or just below, the expected reserve. I have no problem with that method, but I don't think this is the case as Doogy suggested.

[CHABSENTIA]

Exactly. If a Reserve is set and published then I know whether I will want to Bid or pass on it. If I don't mind paying the Reserve and above then I know to bid on it instead of hanging around and hope that others will bid enough to reach it.

 

 

If the reserve is $150.00 and nobody bids over $100.00 not knowing the Reserve then it just doesn't sell to me even if I am willing to pay $150.00

 

 

As a Seller if I publish a reserve of $150.00 and no Buyers come near that amount then I have an indication.

[CHABSENTIA]

This could also be the case. It doesn't make any difference either way except I would like to know the Reserve in advance to see if I want to spend time bidding.

 

If I am bidding on Teletrade then I know if I bid $100.00 then it is actually $112.00. If I can purchase the same exact coin for $125.00 or even $135.00 someplace else and the bid goes to $110.00 which is the next increment for whatever reason then I am not going to bid again. My next bid would have to be $120.00 + 14.00 or $134.00 which would be senseless in this case.

 

 

I see no problem in a Seller setting a reserve but both the Buyer and Seller need to be realistic in expectations.

[jesbroken]

If a coin has a reserve-you cannot buy it cheaper than the reserve price, so why care if a shill bid is being placed or not? At least if it tells you the next bid is above the reserve, you know that your bid has a chance to win. If the reserve is set too high for you, then again you've not wasted your time bidding. Although everyone would like to win a great coin at a really great price, this doesn't happen that often and when bidding you should bid what you feel the coin is worth to you-if you win-you win. Every bid I place is for the maximum amount I'm willing to pay and not worry about bidding again. JMO

[jackson64]

I'm almost sure doogy is refering to DLRC...and personally the way they sell is my favorite....they don't start at $1, the initial bid that appears is one increment below the consignors reserve..and it says that the reserve will be met on the next bid---in fact the last 3 items I won at DLRC were won at below my max bid ( so I know they are not placing fake bids during auction to get the max from me)

 

when the same coin appears the following week it simply means that the reserve was not met during the previous auction....

 

PS: they also buy many of the coins outright from people, so they are auctioning their own inventory which they have every right to set a minimum...

[coinman1794]

There is a certain online coin auction that runs almost every week, and there is something that has caught my attention. If the coin doesn't sell, it appears again in the next auction (like commonly happens on Teletrade, although the auction venue i'm referring to isn't TT). However, usually when it re-appears for sale the next time in the auction, it isn't long until there are lone bids on the items that didn't get any bids last time, or didn't quite meet reserve. What is fishy is that these auctions say that the reserve will be met on next bid, usually not more than a few dollars more (one coin I looked at had close to a $700 bid, and the reserve was apparantly $715 as that was the next minimum bid allowed). I have seen some coins recycled into five and more auctions with this auction house, each time earning one bid that was just a hair away from meeting reserve (and the glaring prompt saying that the next bid will meet reserve).

 

The funny thing is when you see several coins like this in a row, on one page, and you start to wonder what person for the company or someone close to company enters these bids that are close to, but not quite the reserve? Does anyone but me find this to be blatant shill bidding, and unethical?

 

Well, I've been that single bidder on a number of occasions (if it is DLRC you are referring to), so, no. If a coin doesn't sell the first time, interested parties might hope that the reserve has been lowered. Thus, if you place the same bid again, you might win the coin. Sometimes it happens, sometimes not. It may also be pertinent to add that they usually set their reserves right at market value, or sometimes just above, and many are unwilling to meet those reserves.

[Frank Provasek]

As a licensed auctioneer, I can tell you why the reserves in "real" auctions are hidden. The auctioneer is hired by the consignor, and his duty is to get the highest possible price for the items auctioned. There is a huge conflict of interest if the auctioneer reveals the reserve, because he has just told everyone "the least the owner will accept."

 

It would be the same as if you hired an attorney to get the highest possible settlement, and then your attorney told the other side, before they had made the first settlement offer, "the least you would accept."