Auction House

lawrenson

Hi,

not sure if anyone will be able to help me, but I thought I may as well give it a go

There is an Auction House called Watsons. It is owned by Peter and Tim. They charge sellers 15% of any final sales fee.

Peter also has an antiques shop.

He frequently bids on items in the auctions at Watsons. He then sells the items he wins in his shop.

Of course, even if he doesnt win an item, he has still often driven the final sales price up - which means an increase in final sales fees for him.

What I am wondering is - is this legal?

Anyone any thoughts please?

Cheers,
karen

savemoney

Not sure but definitely a conflict of interest there

trisontana

This document does show that there are laws in place regulating auction houses and "price fixing".

Firefox1975

But this is win-win for the seller surely? the auction house is doing them a favour! regardless of who ends up with ownership of the product.

And if they are doing the seller a favour by increasing the sale price I am sure the seller doesn;t give a monkeys about the 15% commision paid

advent1122

I don't see a problem with this.
I regularly attend auctions and staff members bid on them - even the one holding the item up sometimes bids.

lawrenson

Hiya,

oh yes, its good for sellers.

Not so good for buyers tho.

I watched a 3 day auction that had some 12,000 lots in it. Peter bid on approx 4,000 of those lots. I would estimate he won maybe 500 - 1000.

Interesting to see people's reactions to the situation.

Cheers,
karen

Bowling_4_Gold

Just on a side note, I once saw Anthony Warrel-Thompson at my local auctions! Bought all the tat which sat there for months on end.:D

zootscoot

Auctioneers act as agents for the seller and therefore owe them a fiduciary duty (A duty of utmost good faith). The fiduciary duties include a duty not to make a secret profit from their position and a duty not to allow a conflict of duty. If they breach these duties they can be sued for damages if they cause a loss to the seller or may be subject to an action for account of profits meaning they would be required to hand over any profit made to the seller.

advent1122

zootscoot wrote: »

Auctioneers act as agents for the seller and therefore owe them a fiduciary duty (A duty of utmost good faith). The fiduciary duties include a duty not to make a secret profit from their position and a duty not to allow a conflict of duty. If they breach these duties they can be sued for damages if they cause a loss to the seller or may be subject to an action for account of profits meaning they would be required to hand over any profit made to the seller.

....and with that, I rest my case M'Lawd.

RadoJo

lawrenson wrote: »

Hiya,

oh yes, its good for sellers.

Not so good for buyers tho.

I watched a 3 day auction that had some 12,000 lots in it. Peter bid on approx 4,000 of those lots. I would estimate he won maybe 500 - 1000.

Interesting to see people's reactions to the situation.

Cheers,
karen

The thing is that the buyers get to choose how much they are prepared to bid, so if the price goes too high then they have the option of walking away. The auction house works for the seller and will be trying to get them the best price, so in that sense I would imagine they are doing their job very well.