This is part 1 of a two-part post. Click here for part 2.
For the past seven years I have bought and sold coins almost exclusively via the Internet, preferring estate auctions on Proxibid over other venues. I even created a blog, no longer active, called Proxiblog.org, to monitor the company. I still prefer Proxibid over other portals, even eBay—too much competition there, too little oversight, and too few actual auctioneers.
But even auction portals like Proxibid may be falling behind technological trends, and that can spell dire consequences for the hobby.
Before 2011, I bought coins almost exclusively from dealers and coin shows. When I started bidding on Proxibid, I discovered that I could win the same or better coins at significantly lower prices—about two-thirds of retail on average. I remember attending a coin show and not buying a single coin. An ominous feeling overcame me. Standing in line as dealers made deals with other dealers, I realized that the future was digital.
I was saddened. The interpersonal aspect of the hobby encouraged me to continue collecting. That was going to end.
But there was an upside. As long as I could build my collection via online estate auctions, I was content to leave well enough alone, sharing knowledge with others in numismatic publications.
Now, however, I am experiencing another ominous feeling about the volatile state of online estate auctions. Ironically, the problem, once again, concerns technology.
I work at an institution of science and technology. My research focuses on technology and interpersonal communication. My books, published by Oxford University Press, discuss ethics and social change.
Technology changes everything it touches. Introduce it in journalism, and journalism is all about the technology. Introduce it into politics, and well, we know what happened there, don’t we? Introduce it in numismatics, and coin collecting is all about technology.
Two decades ago, many coin dealers failed to foresee the allure of the Internet. Soon they were losing business to major auction companies such as Heritage and Teletrade (now part of Stack’s Bowers Galleries), which scheduled auctions monthly, weekly, and then several times a week. Buyers could sit at home and view thousands of coins. That was part of the fun.
Estate auctioneers owned or rented buildings and had regular customers, too, just like coin dealers. But they also did not foresee the impact of technology. Auctioneers underestimated the cost, labor, and effort of making the Internet user-friendly—an absolute necessity—and resisted such fundamentals as shipping and credit-card fees.
There was a vacuum, and business hates a vacuum. Internet portals such as Proxibid, AuctionZip, iCollector, Live Auctioneers, and others began offering services that dealers and auctioneers abhorred. Those companies developed technologies to list catalogs and take bids and also registered users and stored credit-card data. Of course, they charged for services.
Costs were passed to bidders. At first, auctioneers with onsite clientele did not charge local buyers any fees. Then many had to do so because of rising technology costs. Online buyer fees averaged about 10–15% six years ago and have gradually risen to 18%, 20%, and as high as 23%.
However, these auction portals—seemingly on the forefront of the digital revolution—failed to keep up with technological trends, too, namely, the increasing use of smartphones. Developing user-friendly software for those devices continues to mystify many companies because the programming differs vastly from desktop technology, and those auction portals need both. Worse, smartphone technology continues to upgrade via major companies such as Apple and Samsung. By the time one platform is developed, some of its functions may be outdated.
Keeping up with all of this is expensive. The problem there, once again, is passing the cost of doing business to auctioneers who are struggling to make ends meet. You can only pass costs to bidders until you reach a tipping point.
That point may have been reached.
Consequences for the Hobby
Numismatics cannot survive without new hobbyists, and if those hobbyists use smartphones, that is where the actions are going to be. The more technology drives the hobby, the more dealers, auction portals, and, yes, magazines and publishing houses, will have to adapt. Otherwise each will experience a downturn in business as the aging hobbyist generation sells collections or leaves them in bank boxes for surviving relatives to discover and disperse.
Auction portals like Proxibid have evolved with superior customer service and user agreements that protect collectors. Over the years, I have published dozens of articles criticizing auction portals for allowing counterfeits without pulling them from catalogs, or for permitting hyped descriptions of silver-melt coins in bottom-tier holders.
In Proxibid’s favor, the company heeded those critiques and incorporated guidelines into user agreements, often to protect the buyer. In a world where “all sales are final,” this was an awakening of sorts for many auctioneers. All sales were decidedly not final if the lots were counterfeit, and one encounters fakes regularly in estate auctions.
In 2015, Proxibid adopted eBay-like rules about coin descriptions. Auctioneers could list numerical grades and values only if the coins were holdered by PCGS, NGC, ANACS, or ICG. Before these rules, some sellers were using PCGS Price Guides to describe bottom-tier slabbed coins as having super-gem grades and exaggerated values. Here’s an example, before Proxibid cracked down on the practice:
Then came more rules. Buyers could rate sellers. Auctioneers also would have to disclose whether they could see maximum bids or whether they or their employees were placing bids on their own lots.
When it came to credit cards, Proxibid advised auction houses to use Auction Payment Network for greater security, adding more fees. This is part of doing business on Internet. You have to make it friendly. You have to ship. You use credit or debit cards, so you have to minimize risk.
Auction portals are facing new technological challenges. Increasingly, bidders lack landlines for phones and desktops for business. That changes the very nature of auctioneering. In a few decades, these companies went from catering to local clientele and taking calls from off-site bidders to accommodating Internet buyers with all the technology and fees that entails. Now they and their providers must serve everyone everywhere at any time using mobile devices.
In 2015, GeekWire reported a landline “death watch,” stating, “The landline telephone may be about to join the cassette tape, VCR, and floppy disk in the technology memory book.”
That same year, Wired ran an article titled, “The Death of the PC Has Not Been Greatly Exaggerated,” noting: “Every time the market for PCs doesn’t seem like it could get worse, it does … reaffirming the ascendancy of mobile and the steady demise of the personal computer.”
These doomsday reports happened two years ago. That is how far behind the hobby is, not to mention the tech companies supporting it.
Migration to HiBid
I still support Proxibid because of the safeguards of its user agreement, which applies to both auctioneer and bidder alike. It has great customer service. It resolves disputes. Many buyers and auctioneers complain about these attributes, but I can attest I have used them successfully. Without them, I would not have been able to establish long-term relationships with favorite estate auctioneers.
My new dilemma concerns several trusted sellers who have left or are considering leaving Proxibid for other venues, chiefly HiBid. That company describes itself as “Auction Flex’s Integrated Web Service and Internet Bidding Solution.”
Auctioneers like using HiBid because there is little or no interference between seller and buyer. That spells danger for the inexperienced online coin bidder.
Here is an abbreviated transcript of a chat session that I had with a HiBid representative:
BUGEJA: If an auctioneer sees maximum bids or he or an employee is allowed to bid on specific lots, do you require that in the auctioneer’s terms of service so that buyers can see that?
James (09:57:39): There is not a way for us to monitor an auctioneer. The only way they can bid is by creating a bidder account. We would [not] be able to force them into a special account for auctioneers and employees.
BUGEJA: When a bidder makes a mistake and wants to make a retraction, must he contact the individual auctioneer for that request?
James (09:59:11): Yes, the auctioneer has the ability to adjust the bids.
BUGEJA: If I notice a counterfeit coin or if I acquire one through hibid.com, what, if any, are my options to address that?
James (10:00:02): You would need to contact the auctioneer. We do not get involved in any disputes between buyer and seller.
BUGEJA: Does HiBid publish buyer feedback on an auctioneer so that we can establish customer service or other issues?
James (10:02:05): All HiBid sites have a feedback button that allows them to send feed back to the auctioneer or technical feedback regarding the site to us.
Unlike Proxibid, whose terms of service protect bidders and auctioneers, HiBid has no similar user agreement, giving auctioneers control of the sale along with claims about their lots.
Recently I tried a hitherto unknown auction company on HiBid. Before bidding, I telephoned the auctioneer to ask if he saw maximum bids (he did), if he would remove counterfeits from the catalog (he would), and if he would accept bid retractions (yes, to the next highest bid).
I also emailed more questions to the auction house, but my email was never answered.
Proxibid, however, did respond to this article. Jacqueline Glassman, Senior Vice President of Operations and Strategy, provided this statement:
Proxibid has worked hard over the years to provide an online platform that meets the needs of both buyers and sellers. From risk management and integrated payments, to our industry-leading technology solution for online bidding, our platform was designed with coin auctions in mind. In the coming months, coin buyers and seller will see even more product enhancements, including an improved mobile bidding experience to meet the needs of collectors who are on the go.
What Do Auctioneers Say?
I interviewed four favorite sellers about the state of online estate auctions. Three remain on Proxibid and one has since relocated to HiBid. Three of the four asked that their names not be used. Anonymity was granted. Interviews were done via email, and my editors have access to them, as long as names are not revealed in public.
Gary Ryther, in the auction business for 55 years and a member of the National Auctioneers Association Hall of Fame, has patronized Proxibid for many years, noting that its advertising goes out to thousands of potential buyers. “They have helped me with collections when I needed it,” he says. “The bid agents are very good. They are great to work with. They have raised their charges so I had to raise my charges, but I checked in other venues and most of them couldn’t do what Proxibid does. ”
Other auctioneers had concerns, however.
“I truly think we need to be evaluating more closely the advantages and disadvantages of the online providers,” a long-time Proxibid auctioneer said. “Our expenses for online auctions are too high. We are a small company at the age where change is more difficult than it used to be. We just have not taken the time recently to look into it again but it’s time.”
This auctioneer added that her company’s emails, distributed by the marketing firm, iContact, “are being opened by an ever increasing number from their smart phones. Obviously mobile bidding access needs to improve.”
For the time being, this auction company is remaining with Proxibid. “I think we personally just have a hard time leaving the known for the unknown. We have a good customer base with Proxibid but will they follow us or is there a whole new group out there that would like to do business with us?”
Another top estate auctioneer who plans to remain on Proxibid had many of the same concerns. “Overall I have mixed feelings on Proxibid. If you are selling coins, especially U.S. coins, Proxibid is definitely the better marketplace” over other portals and services.
This auctioneer complained about having to switch to a new credit-card processor endorsed by Proxibid. He is paying higher fees, which cost him thousands of dollars at the end of the year.
However, the auctioneer also had praise for Proxibid, especially when it comes to mobile bidding. “We do enough business with them that we have been able to negotiate the fees down to a manageable level. I know the mobile bidding is terrible although I can honestly say I have never had a customer complain about it so I don’t know how widely used it is yet.”
One of my favorite sellers left Proxibid for HiBid. According to her, “HiBid is probably the mostly widely used software at this point in the auction industry. It is a work horse.” However, she added, the company’s framework was built years ago and is becoming outdated. Still, she likes the mobile options better than Proxibid’s, and that played a role in her switch.
“The auction industry right now in my opinion is suffering greatly because it has never taken control of the software that runs it and the sites that promote it,” she added.
She also likes the fact that all HiBid feedback goes only to the auction company. “HiBid never gets between the bidder and the auctioneer or software. They don’t even handle auctioneer calls well. It would be a nightmare if they answered bidder calls. I don’t want them to. I want the opportunity to talk with my bidders directly. If anyone is going to upset a bidder, I only want to blame myself, not some third party that I have no control over.”
She listed these benefits with HiBid:
- Slightly lower fees.
- More mobile-friendly bidding—“Over 60% of my emails are opened on a mobile device.”
- Easier credit-card updates.
- Direct bidder feedback.
- Quick fixes to digital glitches.
She also listed these shortcomings:
- Bidders don’t have access to buying history.
- Bidders cannot see who is bidding against them.
- Fewer registered bidders than with Proxibid.
- Slower direct customer service.
- Auctioneer rather than bidder centric.
Because her auction migrated to HiBid, I have been checking the site for coin auctions. Its functions are easy to adapt to and sellers notify you when someone places a higher bid on a desired lot. But before I place any bids, I read the auctioneer’s service terms and then contact the seller for additional questions, such as I asked James in the transcript above. I advise the same if you use HiBid.
In the end, I feel more protected bidding on Proxibid, but I also understand the bottom line and the challenges awaiting auctioneers, coin dealers and portals as more buyers use smartphones.
And that is why everyone in numismatics should take note of technology and its rapidly changing forms and formats. If the hobby doesn’t change with the times, we will lose the next generation of collectors, not because of disinterest, but because we were unable to reach them—literally and figuratively. ❑
This is part 1 of a two-part post. Click here for part 2.