Learning From Losses: One Collector's Experience

March 2, 2017

We've all read the headlines, "Sales exceed expectations!" "Bids triple the estimates!" "Earnings top $1 million!" Sure, that happens - for some sellers. But for the rest of us, things don't always go quite as well. For every success in this business, there is at least one instance of losing out.
I've lost out several times over the years. The tiny benefit of losing, though, is that you can learn what didn't work so you can try to do better the next time. I learned basic lessons, such as auctions are unpredictable in any market, and their results are largely up to fate. But I also learned that sellers have real power to improve their odds through smart research, planning, and communication.
Here's one recent example. Over about a 25-year period, my father built an extensive collection of World War I memorabilia, particularly books. He had more than 500 period books. These included about 130 unit histories, rare volumes providing details of specific military divisions, regiments, and battalions. He must have had one of the best private collections of unit histories in the country.
The collection grew too large, and at last, Dad gave it a fond farewell. He entrusted me to sell it. I'd done plenty of buying and selling, but had never handled a collection such as this - not even close. After mulling over several options, I arranged to consign with a large auction company in central Pennsylvania. They would sell it at an upcoming militaria auction.
Everything sounded great, and Dad and I sat back and hoped for the best. When the day of the auction arrived, though, something seemed amiss. The unit histories, which we'd considered the gem of the collection, had been placed in box lots with amazingly low estimates. Books that can sell for $35 to $75 or more each were in lots of ten or more with estimates starting at around $20 per box.
We hoped for some sort of dramatic twist of fate - the kind you read about in the happier stories - but it never came. The box lots of books appeared at the front of the auction like cars in some monotonous train, each selling quickly for low bids. I cringed to think of the many thousands of dollars of material selling for a few hundred, not to mention the pride of my dad's collection going out with such a whimper.
On the plus side, the items that were not books (uniforms, equipment, medals, and so on) exceeded our expectations. But I couldn't stop wondering what had gone wrong with the books. After some reflecting, I have a few clues.
First, I should have done more research. I knew that many unit histories routinely sell online for about $35 to $75 each. I didn't check how they sold at live auctions. Experience should have told me they would not sell nearly as well. The market for unit histories, and rare books in general, is quite limited and specific. I think some specialized buyers are easier to reach online, as opposed to through physical live auctions.
Second, instead of making plans to divide the collection and sell in different venues, I just handed it all over and hoped for the best. One lump sum. One size fits all. I didn't stop to think that maybe a militaria auction wasn't the best choice for everything. Maybe the in-house military experts weren't book experts? Maybe the military buyers weren't book buyers? Maybe book buyers wouldn't bother looking at a military auction?
Third, I should have communicated better. I should have talked with the auctioneers beforehand to ensure we were on the same page. I should have asked about how the estimates were determined, how the items would be grouped, and how the auction would be advertised. That might have made me seem nosy, but it is a business transaction, after all, and I'm a partner in it.
Better research, planning, and communication could have made the sale into a success story for the headlines. It wasn't, but at least I learned some lessons.
My credo is, "You can't cry at the auction." Selling at auction is committing to the result, good or bad, and an element of that has to do with both market conditions and also chance. But there's no doubt that setting up a sale in the smartest way can increase your chances of success tremendously.

 

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