Are you considering selling off a magnificent piece of sterling silver?
The following is a guide on the pros and cons of consigning and selling your magnificent silver items at a major auction house:
Pro: Possibility of Item Selling for more than expected - If you put the item up for sale in an auction the item can potentially go for a lot more money than anticipated. You thought it was worth $10,000 and it sells for $20,000 - hooray. However, most of the time, items have pretty well known values based on previous sales and the likihood of an item far exceeding the average price is actually pretty low. If your item had 10 comparable items previously that sold for $10,000 then your item will likely sell for a similar price plus or minus maybe 10%. The major exception to this rule is when you have an item that is so unique and rare that is almost considered a one of a kind, then that is where perhaps an item has the most potential to far exceed the original appraisal value.
Con: Item might sell at Auction for less than it is really worth - If you can consign with a major auction house like Sotheby's, Christies, Bonham or Heritage Auctions, the auction house will appraise the item and set a low and high auction estimate for what they think it is worth and projected amount it will sell at. However, what is not commonly known, is that most auction houses will purposely set the auction estimate price range substantially lower than what they think the item will really go for. They do this on purpose, because they want to make sure the item actually sells and doesn't go as unsold or lot passed. If an item doesn't sell they don't make their commissions. Auction houses will tell their consignors that bids need to start low to generate interest in the item. The auction houses will also always set a reserve price or opening bid price which is lower than the low range estimate. In example: If the auction range estimate is $6,000- $12,000 the opening bid price would be set at $4,500 which is about 25% below the low estimate. If the item has an established wholesale liquidation value of $7,500 and only sells for the $4,500 then the consigner is basically selling at a loss of $3,000. Believe us, we have attended a lot of auctions and picked off these kinds of too good to be true auction bargains where the item only gets one or two bids just above the opening price and ends up selling for far below the real market value of the item. This is sweet deal for shrewd picker buyers like us and a big downer, surprise and huge disappointment for the novice seller/consignor. We have literally made offers for items to customers that declined to sell to us and then the customer sent them off to auction. We later scooped up the item for a price lower than we originally offered the seller due to the item not getting any action at the auction. That is the chance the customer took when selling at auction. Unfortunately most customers who consign to auctions are oblvioius that there is even a potential downside. Items selling below the real market value at auction are definitely not the norm and most items at auction do sell for their true value, but it does happen more often than auctions house would ever want to admit. The auctions house would certainly like the items to sell for as much money as possible, but they make their commissions money no matter what even if the item sells at a below market rate.
Con: Auction Houses take 35% off the top or more - As a consignor you only receive around 60-65% of the net sale price of your auction item. This is because the auction house charges usually 10-15% or more as a seller's commission and another 25% or higher as a buyer's commission. So in example if your items sells for $10,000 you only net out between $6,000- $6,500, because $2,500 of that is charged to the buyer as a buyer's premium -which all goes to the auction house and the other $1,000- $1,500 is paid for by you as the consignor for the seller's commission fees. Further any photography expenses or print catalog costs are also passed on to you the consignor by the auction house.
Con: Takes Longer to Sell at Auction - If you find a private buyer like The Silver Museum, The Silver Queen, Replacements LTD or Antique Cupboard, you get paid almost immediately - especially if sold in store and the transaction is not done through the mail. However, if you send to auction, it will be 3-6 months before your items is put up for auction and then another month after that till you get paid.
Con: Item Might Not Sell at Auction - If you send your item to auction, you are not guaranteed a sale. You could be waiting almost 6 months to find out that the item went unsold in the auction. If that happens the item can be run again in another auction. However, typically after that, the auction house will strongly encourage and demand a steep price cut.
Con: Auction Houses Slow to Give Offers - If you contact The Silver Museum or others like us, you get an immediate offer with 24-48 hours. With auction houses it can take weeks and you often can't get hold of a direct person easily. You also get some ambiguity from auciton houses and not necessarily get precise clear cut projections on what they exactly think the item will actually net.
Con: Worry and Concern about downside risk - If you sell your item out right to a buyer for a fair price, the transaction is over and done with. However, with consigning to an auction house you will have to wait and see for many months on how well the item fairs. Plus, even though you are rolling the dice in hopes of a big win by sending it to auction, you are also going to have to have in the back of your mind the worry about the possibility of the item doing poorly or not selling at all. Who needs extra worries in life? Sometime just banking a good offer and not looking back is the right thing to do for your mental health and well being any maybe even the best thing for your pocket book. Even if you did come out ahead by garnering a better than expected auction sale price, was it really worth it in the end to have had to be constantly occupying your mental time with the anticipation and potential worry about the downside? If you have ever played the stock market and things didn't work out there as planned, then you know that sinking feeling we are talking about when things go south and then you beat yourself up for weeks, months or even years for making a wrong decision. This potential mental agony might not be worth the risk of taking the gamble and in favor of locking in a sure thing.
Conclusion: Everyone is always enamored by the prospect of getting rich quick. Auctions do provide an element of upside potential to get a lot more money on something than you would have thought possible. However, the truth of the matter is that most auction sales (as in 95% of them) are going to sell for at market price. The other 2.5% will sell for the pie in the sky price and another 2.5% will sell below market price. There is also the 35%-40% overhead cost that will be deducted from your hammer price and all given to the auction house and deducted from your gross total. The House (the auction house) has to make its money too. If Greg from the Silver Museum or Phil from Antique Cupboard or Chris from Silver Queen or Bob from Replacements offers you a retail fair market price which is less 35%-40%, then you might be just better off taking those offers over making the auction houses rich just to have 2.5% shot of making more money, especially since there is also a 2.5% chance of your item selling for far below market value or having the item go unsold altogether. Selling your items at a major auction houses is not always the panacea of hope in our opinion. You can often (as in most of time) come out better by just just selling your magnificent silver items to renowned national or local buyers. Often long time well established stores and long time private buyers have their own pools of billionaire clients that are eager for awesome new material and want to buy more direct and are willing to pay good money for these magnificent pieces from established sellers with whom they have had a longstanding relationship with and and not have to complete for these silver objects of vertu at auction. Private Exclusive quick flips are not uncommon from stores or private buyers to billionaires, auction house don't have this as a resource. We hope you have enjoyed our article and best of luck on whichever way you decide to dipose of your magnificent sterling silver! Expert Tip: Don't just limit yourself to one or the other. Get offers from both private buyers and also estimates from the auction houses.
Get our offers on your magnificent silver items!
If you have items that you'd like to sell,
or even just want to get an idea on valuation
please click the email us button for a quote.
Please send us photos, measurements and item descriptions.
Thanks,
Greg Arbutine
Silver Museum Owner
The Silver Museum buys magnificent silver items!
Please sell your Sterling Silver to The Silver Museum!
Comments