Bidders still after bargains

We have done an interview for the National Post newspaper, you can read it here.

Can you profit through buying collectibles at country auctions, then selling them on eBay? Given that the average country auction attracts 100 people and eBay has 78 million members, you’d think it would be relatively easy to find a collector in the online marketplace willing to pay more than anyone at a local auction. But it isn’t quite that simple.

In mid-June, for example, I drove to the Nigel Charlong Community Centre, a nondescript building near Dundas, Ont., and waved my bidder card when auctioneer Steve Pritchard called for bids on two Newfoundland 50-cent piece coins, dated 1909 and 1911. I won with a bid of $52.50 per coin, well below the prices listed in the Charlton Catalogue of Canadian Coins.

When several boxes of comic books were offered, I waved my card at a bid of $5 per book, having noted that many had no UPCs on the cover — an indication they were at least 30-odd years old and therefore potentially valuable. Last week, I put the coins up for sale on eBay, where a bidder fromIowa won both coins for US$8.76. The fact that I got seven silver dollars at the same auction for $42 and sold them on eBay for $75 was little consolation.

Did I overpay, or is the recession hurting sales?

Mr. Pritchard, owner of Pritchard Auctions Inc. in Mt. Hope, Ont., says quality high-end items have held their value in the recession.   “True collectors always have reserve money for that special piece for their collection, and people with money do not seem to have been affected by the recession and will spend their money just as they did before,” he says.

The recession has lowered the realized prices for mid-and low-range items, however, he says. Bereaved families still require estate sales, but some are holding on to the most valuable items, while shop owners at auctions are keeping their bids low –in each case because they are afraid of getting poor prices. “I have talked to auctioneers in the area and we have all been affected by lower prices.”

Royal Doulton figurines, for example, used to open up at an average of $100 and sell at about $200, Mr. Pritchard says. Today the bidding starts at $40 to $60 and may end up selling for $100.

Jim Snider, auctioneer and owner of the Rockford Auction Centre in Owen Sound, Ont., says the prices realized for nearly all types of collectibles have been on the decline for about five years, but appear to have bottomed. Mr. Snider, a past president of the Auctioneers Association of Ontario and a member of the National Auctioneers Association, says he speaks with dozens of auctioneers every week. “The common observation is that prices are down on almost everything collectible, particularly items that would be considered mediocre or more common. Items of superior condition and ore rarity have been less affected by declining prices but have not dodged the depreciation bullet completely,” he says.

Krista Richards, senior vice-president at A Touch of Class Auctions in Barrie, Ont., says she thinks the recession has hurt auction attendance.   “People are tending to hold on to their money,” she says. “If it’s a valuable collectible or rare piece of furniture, they will still spend — knowing that the opportunity to buy at auction may not come up again and knowing that their item will hold its value. If it’s a general item, they tend not to buy unless they really need it.”

Patrick Doherty of Doherty’s Auction Service in Campbellville, Ont., says the recession has not hurt his business because he doesn’t charge a buyers’ premium. “Our auctions we’ve been having are still well attended and prices are still fairly strong.”   Mr. Pritchard says eBay is the biggest threat to live auction prices as buyers can find a ready supply of anything on the site, which drives prices down. “Good old supply and demand.”

That said, how is the recession affecting eBay? The online marketplace’s publicist referred me to Jim Reid, who runs Steptoe Online Auctions in Victoria, B.C. (onlineauctionvictoria.com), an eBay trading assistant. As eBay notes, trading assistants are not employees or contractors of eBay, but are independent services that sell items on eBay on behalf of others. “The economic downturn has been a business boom for us,” Mr. Reid says.  The eBay collectibles market declined earlier this year but took an upswing in early September, Mr. Reid says, when the amount of “sniping” or last-minute bids started to increase. Until September, if the value of his auction items was $1,000 at the beginning of the day the auction ended, the prices would rise to at least $1,500 by the time they closed.

“We now realize a final value of at least $2,000 at auction’s end,” he says. “Not too shabby. I have had conversations with other local eBay sellers who have also seen an increase in last-day bidders. So the short answer is, at this point in time, the eBay collectibles market is alive and as strong as it was this time last year.”

The eBay trading assistant business is recession-proof, Mr. Reid says, for three reasons:

First, in tough times, people may want to sell things to raise cash. “The best market in the world for the sale of these items is on eBay. That’s where we come in.”

Second, in tough times, people are bargain-conscious, and the best place to find bargains is on eBay, Mr. Reid says.

“Why pay $100 for an item in an antique mall or shop where the building rent is thousands of dollars a month when you can buy the same item on eBay (where the rent is hundreds of dollars a month for the same space) for $60 and have it delivered to your door? Most collectors know this, they’re no fools,” he says. Finally, Mr. Reid says, collectors will go without other things like dining out or taking their car to work before they will go without adding to their collection. “It’s a disease, but we love them for it.”

As for me, I was a bit luckier with the comics than with the coins. A copy of Justice League ofAmerica #2 was buried in the pile of $5 comics I carried out to the car. Although none have sold on eBay in the past 90 days, the ComicLink website shows one sold for US$463 in September. I plan to sell in 2011, when the Justice League movie is due to come out.

*Material reprinted with the express permission of: “The National Post Company”.