Hidden Reserves in Auctions----What's The Point?

    I can't understand why auction houses have hidden reserves on their items.  I was looking through Pristine Auction's latest offering and saw a Three Stooges signed piece (albeit one that looks wrong to me) that has a starting bid at $1000.  It's also listed concurrently with an eBay seller located in California for $11,900.  Among others, they have a Lugosi signed letter starting at $500 at Pristine and the same one with the CA eBay seller for $5400.  With the contrast in prices, there's no way they will let them go for the opening bid.

   Why do auction houses do this?  Why not just start it at the price that will accepted and go from there?  I know Pristine are not alone in doing this.

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Permalink Reply by michelle on July 5, 2021 at 12:00pm

Oh that  does my head in because of course if one doesnt win an item because the reserve is too high as has happened a number of times  to me at R & R I could have bid on something else.

Permalink Reply by marc e on July 5, 2021 at 8:32pm

yu can emaill rr after te auction and try to work out a deal but rule of thumb look at there estimates and u will find there reserves

if estinate is 5k to 7.5k and it only reaches 1.5k i think you will get you own answer

Permalink Reply by Eric Keith Longo on July 5, 2021 at 12:10pm

That is one atypical Lugosi. Not for me.

Here is my 1936 portrait. That mark on his right cheek is in the scan, not on the portrait which is double weight. From Kramer via Brucato. I've seen the other style but I prefer this as it is more prevalent.

Permalink Reply by eddy on July 5, 2021 at 8:51pm

I think this Lugosi reply might have been meant for another thread.  I've seen this portrait a few times here...it's quite nice.

Permalink Reply by Eric Keith Longo on July 5, 2021 at 8:53pm

It was in response to your 1931 letter post earlier today Etienne

Permalink Reply by Eric Keith Longo on July 5, 2021 at 8:55pm

This is the correct thread as I look now.

Permalink Reply by eddy on July 5, 2021 at 9:05pm

Oh, my mistake.  I didn't realize you had checked out the Lugosi letter.  I agree it looks dodgy...hope someone doesn't get stuck for $5400 or anywhere near it. Hard to believe PSA passed it.

Permalink Reply by marc e on July 5, 2021 at 8:30pm

becuase they want to get traction going its called an auction 

also a consigner can lift the reserve when it gets close if alot of bids happend or do after sales if its close

theres tons of ways to run an an auction

sttarting at 1$

starting with a reserve

starting at a hidden reserve

starting at a price the consignore wants for it even its its one bid

differnt auction houses run theres differnt ways

theres no real right way to each there own

the big trend is one bid and it sells now 

also heritage does alot iof 1$ auction starts then buyers gets pissed when the itiems sell for 10k or 20 or 100k and they dont have a chance at it

Permalink Reply by eddy on July 5, 2021 at 8:59pm

The idea of hidden reserves still frustrates me.  Start bidding either at $1 like you mention, marc e (and let the market decide..although somewhat risky).  Maybe more realistically start it at the least the auction house will take for it and go from there.

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