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Everyone familiar with eBay is well versed in the use of the internet
as a powerful tool for on-line auctions. It seems simple, upfront, and
straight forward. Unfortunately, it has also spawned a whole host of
new on-line auction type services from guns to arrowheads, to coins.
In many ways it is great asset to those who for one reason or another
can not travel to an auction, in others it bears hidden cost and
pitfall traps. Most appear to be honest and cleanly run auctions but a
few have hidden non-existent bidders often called "echo" bidders that
will appear on screen just like a real bidder to run the wager up. It
is hard to spot these "phantom" or "ghost bidders" unless one watches
really closely. Any bidder that pops up over and over again will
eventually bid against themselves and might even have the name of
"echo" or "eco" or some other similar prefix as part of their screen
name. When the same bidder is bidding on everything you can just about
bet it is an "echo" and you are being hung out to dry by someone on the
internet, especially when the bids seem excessive - illogically high
for the real value of the item - and pops in on every other bid and
then suddenly vanishes and rarely wins anything.
An experienced auctioneer can sense when bids are faltering and when a buyer is becoming reluctant about bidding by the speed in which the bidding slows -- at this point his echo fades away and only appears when it is hot or just to get it going. I saw this type of behavior at a recent NON-EBAY on-line, live artifact auction held in the month of September 2009. There was a very active "echo" in this auction and despite assurances the auction was fair one could see something was not right as the echo did bid against itself several times in a row. To be fair, probably the auction was about as clean as one gets when external bids such as "phone bids" and "on-line bids" are allowed as when these invisible forces are brought into play one really does not know who or IF THEY REALLY ARE bidding against. It might be said, GONE ARE THE DAYS OF THE REAL AUCTIONS in which people assembled in one place with their cardboard numbers and slugged it out like real men! At least in the old style auctions you knew who your competition was and in some cases if it was worth the increased bid by observing how frequently and excitedly a major dealer bid on the item. Today the bidder has the electronic phantom on and off-line to contend with and no guarantee the bid increases are honest.
Some will say cyber auctions (cyuctions - pronounced sock-shuns) will be good for the environment because people will not have to consume fuel to participate and thus save natural resources and reduce green-house gases. On the upside, cyuctions will allow for a global buying community and in theory increase demand and prices. The disabled will be able to participate as being house bound will not keep them from enjoying their hobby. Cyuctions will bring more relics and better relics to the collecting community and in time might even reduce prices (I doubt it) through competition and increased supply.
On the downside, others might view these auctions as self-limiting as people will tire of traveling a 100 miles just to be outbid by someone they can not see. The cost of auction adds on will also be self-deprecation factor. Artifact collectors like to see what they are buying, touch what the are buying, and examine what they are buying as they know the flaws of relying only on photographs. Most, if not all, on-line live auctions have hidden cost built into the system. Many want an additional 13 to 24% buyer premium just for the privilege of bidding on line as opposed to bidding on site. True, many auction houses have buyer premiums regardless if your go to their physical site or not, but most are limited to the 5 to 10% range and not the double digit range making staying at home twice as expensive. If one considered in travel time and the cost of gasoline it may be a moot point with them, but the more economically minded might view this as excessive greed as the auction house has very little cost involved with an internet sale as well and would have a hard time justifying the expense as a real cost to them.
Another self-limiting factor is the buyer has to rely only on the credibility of the seller, the auction house, and the listings as to being accurate. The buyer only has a one-dimensional photograph to base his purchase on and a description which may or may not show a flaw the buyer might consider relative. Then there is a problem of returns should the seller make a mistake and it is discovered the relic someone just bought was a reproduction. Sellers can disappear once the sale is done, making it nearly impossible to collect on a bad piece or may simply have a no-return policy or one that states something insane like getting a letter from a certified archeologist in some museum -- like that will really happen. Cyuctions create the ability for wholesale fraud. There is nothing that stops the fake dealer from dumping hundreds of fakes on the cyuction and then moving on. Likewise, there are no checks in balances in place that can prevent the thief from acquiring hundreds of artifact photos from shows, collections, and internet sites, reproducing their description and hosting an auction without ever having one real item in their possession. Nothing prevents the thief from hosting a sale, collecting the funds, and then vaporizing into the internet mist only to pop up again later under another screen name and doing it all over again. Most good artifact auctions bring in tens of thousands of dollars a sale if not hundreds of thousands of dollars. A tempting meal for the dishonest.
Taxes are another cost the on-line cyber-bidder (CYDDER) might not know about. In the recent one I participated in the seller wanted to charge sales tax. MOST STATES DO NOT CHARGE SALES TAX ON INTERNET SALES and regardless what the on line auction house says, if you bid on line - IT IS AN INTERNET SALE and you are not subject to the tax. There is nothing preventing the auction house - which by the way often takes no responsibility for the auction, fees, and collecting the funds, or taxes -- or more specifically the person who actually contracted for the auction from keeping the sales tax and making a dishonest profit. Five or Six bucks times several hundred bids soon adds up - especially when they know they don't have to turn in this state tax and it is not likely the state would ever know.
Below is an invoice from the auction I took part in: The name of the auction and other information has been intentionally left out for privacy reasons.
An experienced auctioneer can sense when bids are faltering and when a buyer is becoming reluctant about bidding by the speed in which the bidding slows -- at this point his echo fades away and only appears when it is hot or just to get it going. I saw this type of behavior at a recent NON-EBAY on-line, live artifact auction held in the month of September 2009. There was a very active "echo" in this auction and despite assurances the auction was fair one could see something was not right as the echo did bid against itself several times in a row. To be fair, probably the auction was about as clean as one gets when external bids such as "phone bids" and "on-line bids" are allowed as when these invisible forces are brought into play one really does not know who or IF THEY REALLY ARE bidding against. It might be said, GONE ARE THE DAYS OF THE REAL AUCTIONS in which people assembled in one place with their cardboard numbers and slugged it out like real men! At least in the old style auctions you knew who your competition was and in some cases if it was worth the increased bid by observing how frequently and excitedly a major dealer bid on the item. Today the bidder has the electronic phantom on and off-line to contend with and no guarantee the bid increases are honest.
Some will say cyber auctions (cyuctions - pronounced sock-shuns) will be good for the environment because people will not have to consume fuel to participate and thus save natural resources and reduce green-house gases. On the upside, cyuctions will allow for a global buying community and in theory increase demand and prices. The disabled will be able to participate as being house bound will not keep them from enjoying their hobby. Cyuctions will bring more relics and better relics to the collecting community and in time might even reduce prices (I doubt it) through competition and increased supply.
On the downside, others might view these auctions as self-limiting as people will tire of traveling a 100 miles just to be outbid by someone they can not see. The cost of auction adds on will also be self-deprecation factor. Artifact collectors like to see what they are buying, touch what the are buying, and examine what they are buying as they know the flaws of relying only on photographs. Most, if not all, on-line live auctions have hidden cost built into the system. Many want an additional 13 to 24% buyer premium just for the privilege of bidding on line as opposed to bidding on site. True, many auction houses have buyer premiums regardless if your go to their physical site or not, but most are limited to the 5 to 10% range and not the double digit range making staying at home twice as expensive. If one considered in travel time and the cost of gasoline it may be a moot point with them, but the more economically minded might view this as excessive greed as the auction house has very little cost involved with an internet sale as well and would have a hard time justifying the expense as a real cost to them.
Another self-limiting factor is the buyer has to rely only on the credibility of the seller, the auction house, and the listings as to being accurate. The buyer only has a one-dimensional photograph to base his purchase on and a description which may or may not show a flaw the buyer might consider relative. Then there is a problem of returns should the seller make a mistake and it is discovered the relic someone just bought was a reproduction. Sellers can disappear once the sale is done, making it nearly impossible to collect on a bad piece or may simply have a no-return policy or one that states something insane like getting a letter from a certified archeologist in some museum -- like that will really happen. Cyuctions create the ability for wholesale fraud. There is nothing that stops the fake dealer from dumping hundreds of fakes on the cyuction and then moving on. Likewise, there are no checks in balances in place that can prevent the thief from acquiring hundreds of artifact photos from shows, collections, and internet sites, reproducing their description and hosting an auction without ever having one real item in their possession. Nothing prevents the thief from hosting a sale, collecting the funds, and then vaporizing into the internet mist only to pop up again later under another screen name and doing it all over again. Most good artifact auctions bring in tens of thousands of dollars a sale if not hundreds of thousands of dollars. A tempting meal for the dishonest.
Taxes are another cost the on-line cyber-bidder (CYDDER) might not know about. In the recent one I participated in the seller wanted to charge sales tax. MOST STATES DO NOT CHARGE SALES TAX ON INTERNET SALES and regardless what the on line auction house says, if you bid on line - IT IS AN INTERNET SALE and you are not subject to the tax. There is nothing preventing the auction house - which by the way often takes no responsibility for the auction, fees, and collecting the funds, or taxes -- or more specifically the person who actually contracted for the auction from keeping the sales tax and making a dishonest profit. Five or Six bucks times several hundred bids soon adds up - especially when they know they don't have to turn in this state tax and it is not likely the state would ever know.
Below is an invoice from the auction I took part in: The name of the auction and other information has been intentionally left out for privacy reasons.
EBay's stingy photo allotment policy for guides makes it impossible to read. Before I brought the point out about taxes and other things the seller had included sales tax on the buyer premium which increased the sales tax nearly two dollars. THERE IS NO SALES TAX ON BUYER PREMIUMS OR PAYPAL FEES ETC.... ONLY ON THE PURCHASE PRICE. Again, in most states there is NO SALES TAX on internet sales unless it is sold within the state to someone who lives in the state. This two or three dollar increase difference between purchase price and tack on fees adds up and the buyer should be careful to note this. Anyone charging taxes on fees should be viewed as doing something dishonest.
If the auction company takes PayPal or other credit cards they will often attempt to pass this cost onto you. If the fee is minimal and not worth the hassle to you then pay it. By the time you add up the effort of getting a money order it could be a wash, but make sure they aren't trying to tax you on this fee as well. In addition to the taxes on the fees, the person putting this auction even had sales tax on the shipping. I balked, and all the taxes were removed so the buyer does have recourse here, but should take time to figure out the tax they should be paying if any and not just look at the auction receipt and take it at face value as right.
The final hidden cost is shipping. We all hate shipping but this auction wanted nearly $9.00 for shipping something that could be shipped under $5.00. I know the auctioneer and I doubt if there was any labor being paid to help with the shipping. Even if there was it wasn't $4.00 or $5.00 a box worth. Many might chalk it up as cost and convenience. I do everything in a business mindset and look at any purchase regardless if it is a personal purchase or not and all the hidden fees as part of the 'ACTUAL COST.' ALL cost are viewed in my mind for what they are -- OVERAGE AND PART OF THE PURCHASE PRICE. Regardless if I intend to keep an item for my personal collection or re-sell it, these fees do affect my desire to bid and should be taken into account by anyone bidding. To simply be of the attitude, "NO MATTER AT WHAT COST" is not a great way to bid for any reason and only results in a bad investment with lower hopes of eventual return. When all the hidden expenses were added up they increased the final cost of just 3 items to nearly 1/4 the cost of the items bought. This is a VERY BIG HIDDEN EXPENSE on any bidder and everyone should take these hidden fees into consideration before bidding. Chances are you won't get a bargain at most auctions and certainly not many at a live - cydder auction, but value is a personal view and won't go into idiots paying $40.00 for a $5.00 arrowhead, etc, but the buyer must give thought before hand what is the policy regarding premiums, shipping, sales taxes, and the actual value of the item for bid and determine if the bid is worth the return. For every item bought a minimum of $2.00 for every ten dollar in cost is going to be added to the winning bid price. For those who lack a calculator $2.00 seems small but it is 20% of $10.00 and 20% can add up quite quickly when compounded on multiple wins or items having high dollar value -- a hundred dollar arrowhead will suddenly become a $120.00 arrowhead - do this several times and the cydder buyer can easily find he has spent several hundred dollars more than they had anticipated.
Watch the hidden cost, question the hidden cost, verify the end cost by checking sales tax and if it is applicable and bid 20% or more lower than the maximum amount you are willing to spend to offset the concealed overage one often overlooks until too late.
If the auction company takes PayPal or other credit cards they will often attempt to pass this cost onto you. If the fee is minimal and not worth the hassle to you then pay it. By the time you add up the effort of getting a money order it could be a wash, but make sure they aren't trying to tax you on this fee as well. In addition to the taxes on the fees, the person putting this auction even had sales tax on the shipping. I balked, and all the taxes were removed so the buyer does have recourse here, but should take time to figure out the tax they should be paying if any and not just look at the auction receipt and take it at face value as right.
The final hidden cost is shipping. We all hate shipping but this auction wanted nearly $9.00 for shipping something that could be shipped under $5.00. I know the auctioneer and I doubt if there was any labor being paid to help with the shipping. Even if there was it wasn't $4.00 or $5.00 a box worth. Many might chalk it up as cost and convenience. I do everything in a business mindset and look at any purchase regardless if it is a personal purchase or not and all the hidden fees as part of the 'ACTUAL COST.' ALL cost are viewed in my mind for what they are -- OVERAGE AND PART OF THE PURCHASE PRICE. Regardless if I intend to keep an item for my personal collection or re-sell it, these fees do affect my desire to bid and should be taken into account by anyone bidding. To simply be of the attitude, "NO MATTER AT WHAT COST" is not a great way to bid for any reason and only results in a bad investment with lower hopes of eventual return. When all the hidden expenses were added up they increased the final cost of just 3 items to nearly 1/4 the cost of the items bought. This is a VERY BIG HIDDEN EXPENSE on any bidder and everyone should take these hidden fees into consideration before bidding. Chances are you won't get a bargain at most auctions and certainly not many at a live - cydder auction, but value is a personal view and won't go into idiots paying $40.00 for a $5.00 arrowhead, etc, but the buyer must give thought before hand what is the policy regarding premiums, shipping, sales taxes, and the actual value of the item for bid and determine if the bid is worth the return. For every item bought a minimum of $2.00 for every ten dollar in cost is going to be added to the winning bid price. For those who lack a calculator $2.00 seems small but it is 20% of $10.00 and 20% can add up quite quickly when compounded on multiple wins or items having high dollar value -- a hundred dollar arrowhead will suddenly become a $120.00 arrowhead - do this several times and the cydder buyer can easily find he has spent several hundred dollars more than they had anticipated.
Watch the hidden cost, question the hidden cost, verify the end cost by checking sales tax and if it is applicable and bid 20% or more lower than the maximum amount you are willing to spend to offset the concealed overage one often overlooks until too late.
Guide created: 09/21/09 (updated 09/22/09)
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