Auction Prices

Anything to do with Port.
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richmills
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Auction Prices

Post by richmills » 11:08 Fri 23 Oct 2020

Hi all

Can I just ask from the more experienced members here; what do people think is a reasonable price to expect to pay for port at auction?

I've started browsing a couple of online auction sites with a view to maybe taking a punt on some bottles, and my view has been that considering the general lack of guarantees at auction I would probably be happy to pay maybe 75% of retail. But with that limit in mind, I've not been able to get anywhere near the price of anything I wanted to buy.

Taking the retail price as the cheapest bottle I could buy right now on wine-searcher, all the lots I've wanted to buy have (once buyers fees and shipping have been added) either had a reserve set at nearly retail already, or the hammer price has ended up at or near retail.

Is my expectation of the price at auction unrealistic? Or am I just looking at the wrong auctions?

winesecretary
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Re: Auction Prices

Post by winesecretary » 12:39 Fri 23 Oct 2020

A number of observations, mostly leading to there being fewer bargains than there used to be.

Cheapest Wine-Searcher prices normally exclude VAT (and often duty).

The net spread between retail and auction narrowing significantly in recent years is primarily a 'better information' issue - the-saleroom.com picks up nearly all the auction houses now. You can get much wider net spreads between retail and auction at the houses which do not show their prices on that site.

Auction commissions (especially if bidding through the above site) have been spiralling for buyers in recent years. When I started buying wine it was usually 10% plus 17.5% VAT. Now 20% plus 20% VAT is not uncommon, usually with an additional circa 5% + VAT if bidding via the above site. Worth looking at Straker Chadwick and Bacchus Auctions if you want more reasonable buyers' premiums.

The cots of getting wine picked up from auction houses and delivered has also gone through the roof - currently about £6 a bottle up from £3 five years ago. It has also now been almost entirely outsourced. I do not know why auction houses have stopped offering this service, but suspect it is because of a combination of the ancillary costs of employing casual labour; and presumably they get some commission from the outsourced providers which provides them with equivalent net revenue anyway.

At some point WineBid will set up over here, and when it does it will eat all of these auction houses' lunches within a couple of years.

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richmills
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Re: Auction Prices

Post by richmills » 14:14 Fri 23 Oct 2020

winesecretary wrote:
12:39 Fri 23 Oct 2020
Cheapest Wine-Searcher prices normally exclude VAT (and often duty).
Yes I should have been clearer. I meant the cheapest price from wine-searcher taking into account all taxes due.

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SushiNorth
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Re: Auction Prices

Post by SushiNorth » 20:22 Fri 23 Oct 2020

Over on this side of the pond I've seen a similar effect. While our auction prices were never as low as in the UK (as far as I can ever remember), the availability of information about retail prices, and the broad access to auctions online, enables bidders to quickly locate sub-retail prices in their favorite categories. The result is near-retail prices for most wines at auction.

I also feel that the increase in Buyers Premiums has chipped away at any auction-savings, as sellers likewise can see the retail prices and aren't willing to drop so far below them as to make them affordable to sellers. The huge markups by auction houses will only create more opportunity for disruption by services like wine-bid.

The most effective strategies I've employed at auction are to be well aware of my max on a purchase (i.e. retail value less premium and shipping), to be willing to buy high-priced lots (which chases away small-time bidders), and to watch for lots of Port that are in low-Port live auctions and/or numbered far from the other Port listings.
SushiNorth
Image Port wine should perhaps be added -- A Trollope

idj123
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Re: Auction Prices

Post by idj123 » 20:26 Fri 23 Oct 2020

Strange times in the auction world; I normally work on a 2/3rds lowest equivalent retail basis but as a lot of us would atest, this appears to have largely gone out the window as of late even to the extent of higher prices being paid at auction than available retail! Hopefully, this topsy-turviness will right itself when all else does although, as pointed out , BP inflation in recent years has been difficult to justify.

Glenn E.
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Re: Auction Prices

Post by Glenn E. » 22:46 Fri 23 Oct 2020

SushiNorth wrote:
20:22 Fri 23 Oct 2020
The most effective strategies I've employed at auction are to be well aware of my max on a purchase (i.e. retail value less premium and shipping), to be willing to buy high-priced lots (which chases away small-time bidders), and to watch for lots of Port that are in low-Port live auctions and/or numbered far from the other Port listings.
It shouldn't work this way, but it does and I've found it to be highly effective. In addition to being aware of your max price on a purchase, wait until the last minute to "snipe" using your max bid.

If everyone were smart enough to always place their max bid and then let the auction mechanism do its thing, this wouldn't be effective. The goal in that case would be to place your max bid as early as possible (because ties go to the earliest bid). But some people are stupid and don't place their max bid, so waiting until the last minute to bid can catch them off guard. I.e. they were willing to pay more for the bottle but tried to lowball instead of letting the auction mechanism do its job.
Glenn Elliott

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uncle tom
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Re: Auction Prices

Post by uncle tom » 16:30 Sat 24 Oct 2020

Auction prices go in peaks and troughs, and have been running hot this year.

If there's a wine you're after that's not uber rare, look up the auction results when it was last sold, and set your bid limit a couple of bid increments below that level when it next appears. If you get outbid again, up your bid limit by another increment each time it comes to auction, until you get a result.

Be careful with buyers premiums, and avoid using platforms like The Saleroom that add a further margin. Also be careful when wine is sold in bond - a moment's carelessness when checking the lot description can easily land yourself with a hefty add-on for duty and VAT.

Two other errors that are quite often seen are people bidding VP prices when the bottles are LBV, and bidding 12 bottle case prices when the case is 6 bottles..
I may be drunk, Miss, but in the morning I shall be sober and you will still be ugly - W.S. Churchill

Andy Velebil
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Re: Auction Prices

Post by Andy Velebil » 19:31 Sat 24 Oct 2020

uncle tom wrote:Auction prices go in peaks and troughs, and have been running hot this year.

Two other errors that are quite often seen are people bidding VP prices when the bottles are LBV, and bidding 12 bottle case prices when the case is 6 bottles..
Agree. Auctions here have been surprisingly hot for the economy and covid issues.

And the paying a lot for old LBV’s is driving me nuts. Look folks, they’re fun but they are not great ports and they are not worth what people have run their prices up to. Stop paying so much for them.

forest26
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Re: Auction Prices

Post by forest26 » 09:06 Sun 25 Oct 2020

Talking to the auctioneers - there are a lot of private buyers out there who are driving up prices. Particularly on wines and ports that are in a good drinking window.

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JacobH
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Re: Auction Prices

Post by JacobH » 12:39 Sun 25 Oct 2020

idj123 wrote:
20:26 Fri 23 Oct 2020
BP inflation in recent years has been difficult to justify.
I quite agree and am amazed at the continued existence of so many traditional mixed auction houses considering how much they charge for quite modest services. I don’t really buy wine at auction but do collect musical instruments which sometimes are only available the old fashioned way. The last time I bought something, the auction house collected 18% SP (inc. VAT) + £2.50 “catalogue charge” together with 24% BP (inc. VAT) + either £16 or £32 P&P. I’ve been wondering if people are forgetting about these because I have seen some prices edge up towards retail when they are taken into consideration, especially if they buy through the Saleroom which adds yet another percentage and charge...
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richmills
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Re: Auction Prices

Post by richmills » 08:59 Mon 26 Oct 2020

Thanks everyone, some very helpful comments there. It sounds like I've picked the worst time to start looking at auctions :)

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