During Adam’s tenure at Dale Motor Cars, Adam purchased over 15 cars for his personal collection.
Adam stored most of his cars in his barn, with some stored at his brother’s barn about two miles away.
Adam’s last day at Dale Motor Cars came Friday, as Dale Harris had died a few weeks earlier, and the family decided to close the business.
Adam and his wife Jennifer had some savings. Nevertheless, they thought it may be time to sell a few of their cars in the collection.
Monday morning, Adam called Jim Parker, Auctioneer. “I want to talk to you about selling a few of my cars at auction,” he told Jim.
Jim met Adam at his home, and they surveyed the car collection there in the barn. They then drove down to Adam’s brother’s home, and looked over those cars.
“I think we can help you, Adam. When would you like us to get started?” said Jim. Adam and Jim discussed the auction, including commissions, detailing the cars, where the auction would take place, and other issues.
Adam then said, “Jim, I’ll need reserves on these cars … I can’t risk ‘giving them away.'”
“Okay, Adam. I understand your concern.” said Jim. “I’ll get that contract over to you, and get the advertising started.”
Two weeks later, Jim called Adam to discuss the auction coming up in just eleven days. Jim had to unfortunately report to Adam that things didn’t look very promising.
“I’ve talked to every known car collector within 1,000 miles of here, and 100’s of other people, Adam.” Jim explained. “And, without exception, every potential buyer has told me that they are concerned about the reserves.”
“But cars always sell with reserve,” exclaimed Adam. “That’s not anything unusual, and nothing they need to worry about.”
“I know, I know, Adam,” said Jim. “But, that’s not what I’m hearing.” Jim continued to tell Adam that potential buyer after potential buyer told him that they were very interested, but for the reserves.
“Adam, I’ve been an auctioneer since 1967. Back when I started in this business, and Johnson was President, reserves weren’t an issue at all. In fact, nobody expected anything else,” Jim said.
“But, this is 2012 and buyers are educated, savvy and selective. A reserve suggests to them you’re not serious about selling.”
“Keep talking Jim; I’m listening …” said Adam.
Jim sat back in his chair, and looked at Adam. “Adam, it appears to me this way …
- A reserve deters the very bidders it’s in place to protect against not participating.”
Adam, and Jennifer who had joined the conversation, sat silent.
Adam had placed reserves on the cars to protect against the right buyers from showing up — less than sufficient demand — to guard against cars selling below true “market value.”
What Jim was pronouncing was the reserve which was in place in case those right bidders didn’t show up … was causing those right bidders to not show up.
Jennifer spoke up … “Let me see if I understand, Jim. These reserves we’ve placed to insure against a lack of … uh … bidder participation, have actually caused a lack of bidder participation?”
Jim, Adam and Jennifer looked at each other, as if each was waiting for one of the other two to say something …
“Let’s postpone the auction. I’ll run ads noting that, and a new date about 3 weeks out. This time we’ll make it clear this is an absolute auction, with no reserves.” said Jim.
“Do it,” Adam and Jennifer said, in almost unison.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.