This has to be read to be believed OA dealer practices

[MONSTER]

Originally Posted by J-M-T

Is it still considered a shill bidding if other people who Mike knows personally bid on the art and then win it and later Mike buys the art back?

I can't see how its not. His friends are bidding to protect his reserve. If you are bidding on something he is selling the only way you will win is if you bid higher than his (secret reserve). I would imagine most bidders would have a problem with this especially if they didn't know about it before they bid. I know I would.

[marvelboi77]

All dealers have over inflated the market for years period. They put their stuff up and buy it back at a high price and bam that is not considered the going rate and they can now charge that going price on all other similar items. Or they can hold onto the piece for another 2 or 3 years so people forget and sell it again at it's new market price. Happens all the time.

[marvelboi77]

Originally Posted by MONSTER

I can't see how its not. His friends are bidding to protect his reserve. If you are bidding on something he is selling the only way you will win is if you bid higher than his (secret reserve). I would imagine most bidders would have a problem with this especially if they didn't know about it before they bid. I know I would.

The dealers are making sure all art is at the inflated price these days. You will never get a deal on anything at auction, they bid it all up and will buy it. You will only ever get something if they feel the price is at market which protects their investments. My friend and I have been talking about this for years.

[J-M-T]

Originally Posted by MONSTER

I can't see how its not. His friends are bidding to protect his reserve. If you are bidding on something he is selling the only way you will win is if you bid higher than his (secret reserve). I would imagine most bidders would have a problem with this especially if they didn't know about it before they bid. I know I would.

I know shill bidding is bad and illegal.
But what if I bid on an auction without a seller telling me to, and I won, and turned out that seller owned the item and ask to buy it back from me. Is that ok?

[ratchet]

The fact that the seller openly admitted and defended his position tells you all you need to know. He's basically daring you not to buy from him anymore even though he's openly said he'll only sell to you for what HE deems is a fair a price.

I was under the impression that people determine the market with what they see fit to pay... This guys is saying to hell with that...

[Ghost9]

It's absolutely unethical and possibly illegal. Price fixing, shill bidding, all of the above. I don't understand why he doesn't just set a reserve on each auction so that if the bids don't reach his "fair market price" he holds onto the piece. Seems that would solve his problem and be completely ethical.

[galactus]

Originally Posted by Ghost9

It's absolutely unethical and possibly illegal. Price fixing, shill bidding, all of the above. I don't understand why he doesn't just set a reserve on each auction so that if the bids don't reach his "fair market price" he holds onto the piece. Seems that would solve his problem and be completely ethical.

Because then the non sale reserve price psychologically becomes a price ceiling for most buyers, "it didn't sell for $x,xxx, so I'm not paying even that". By Mike having no set reserve and artificially raising the price to an acceptable "sale" price (which he alone determines apparently), he keeps the artwork and shows a "sale" at a price more to his liking. This more easily supports his pricing structure when the piece magically appears on his site again.

[snappahead]

Very interesting. Mike clearly didn't think he was in the wrong or he wouldn't have made that post, but he is wrong. For posting that comment and for doing that practice. He's essentially screwing people out of money and manipulating the auction system for his own gains. If I'd ever bought a piece of his at auction, I'd be wondering right now how much I SHOULD have paid for it. Dirty business.

[Behold Gravitas]

For a new guy, sure makes it difficult to want to jump into the OA market - as even person to person sales would be affected - I'd be one of those guys that needs some price reference to help me determine some semblance of value. Or at least what some other people think of as its value, as I try to formulate my own price/value for art since I lack that experience.

[JadeGiant]

That thread is very enlightening and one I have followed since the start. As someone who has recently started moving more toward published art, Heritage Auctions have come into play more and more for me. As such, I made some assumptions that have proven to be untrue.

I assumed that HA would not bid their own auctions up. They indeed can and do bid on their own auctions.

I assumed that a person’s maximum bid was closely guarded information within HA and that HA employees that are able to bid would not have access to this information. This was also proven untrue – there are employees that have access to your maximum bid and can bid with this knowledge (ie bid you up to close to your max).

I assumed that high profile dealers would not shill bid up their own auctions. This has proven to be untrue per this thread.
So, while I have bought at HA this past year, I plan to re-evaluate my auction plans with the understanding that the playing field is not what I assumed it were which means I will be more cautions and likely be less active at HA. Ugh.

While the commission game is fraught with the potential for deals gone south, bad communications, cash grabs, etc., the published art game has its own pitfalls as I am learning more and more. It is a good thing I love art and am willing to put in the leg work and research that is takes to keep adding great art to my portfolio.