Daum Nancy Auctions – Consignor Beware

Things To Consider Before Consigning To An Auction House

An auction house is the most glamorous selling venue for a Daum item. It is fun to see your item in a catalog and to watch it sell. However, even in a completely fair auction setting the idea that you are getting the highest price is still flawed. You are just getting the highest price the underbidder would pay. The top value to the winning bidder is never known, and it can be much higher than the actual price realized. The appealing “ship it and forget it” aspect of auction houses can be outweighed by all of the following:

1. Very High Commission Fees
Most auction houses take 25% from the seller and 20% from the buyer. Collectors always factor in their buyer’s premium and bid lower so their invoice price matches what they actually want to pay.
Example: A Daum piece sells at auction for $2,000. The buyer gets charged $2,400 and the consignor only receives $1,500. That $900 spread is equal to 37.5%.

2. It Takes Months To Get Paid
Even if you can find an appropriate auction for your Daum glass there is still a long processing lag time between consignment deadlines and payouts. From the time you ship your item to an auction house to the time you get paid is between four and seven months.

3. Lack of Attention
The goal of an auction house is to sell as much material as possible. This means selling up to thousands of items over a short time period. While your item may get exposed to many people, the buyers still have to sort through thousands of pieces and literally millions of dollars worth of material. Even if you have a nice item, odds are there will be much more exciting material that draws everyone’s attention and spending budget. In many cases, the auctions are so huge that the live floor bidding sessions last until 2am.

4. No Price Guarantees
Most auction companies attract business because they make very high value estimates. These estimates can purposely be unrealistically high just to assure the auction house gets the consignment.
Example: We might value a Daum vase at $11,000 and would be willing to write a check for that price – no questions asked. An auction company might value the same piece at $10,000 – $13,000. However, while they value it at as much as $13,000, the starting bid will be 50% of the low estimate. That means that even though they think it might be worth $13,000, there is nothing to keep it from selling for $5,000. It is not uncommon for auction houses to compare apples to oranges to come up with unrealistic price targets just to attract the consignment.

5. Bidder Collusion
Price fixing or bidder collusion is sadly one of the dirty secrets, and a fairly common practice, of some collectors. There are less than a couple hundred people in the country who collect Daum glass as a hobby. Of those people there are certainly less than a dozen people spending significant amounts of money on their hobby each year. All of these top of the line collectors know each other and many of them have been acquaintances or good friends for years. Every time there is an auction, many of these people meet before hand and literally split up who gets what to keep the prices down. It is a frowned upon practice; but there is really no way to stop it.

Example: You consign a Daum lamp estimated at $40,000 to $60,000 to a major auction. This piece is in a specialty collecting area of three high-end collectors. Collector A offers to give collectors B and C $5,000 each not to bid. They agree to this knowing that the next time a similar lamp comes to auction, collector B or C will get the chance to be the winning the bidder in the same scenario – and the cycle just continues. So while the lamp would have been worth $50,000 if offered privately to us, due to the auction scenario someone can buy it for $25,000 and just pay off his friends. The auction house gets their commission, the first collector gets a steal, and the other two collectors get paid under the table; everyone is happy but the consignor.