Top three reasons to sell at auction according to Peter Loughrey:
Unlike selling at a fixed price, an auction has the unique ability to create a competitive environment, where there is no fixed limit to how high the value can be set on any individual item. As soon as you put a fixed price on something, someone invariably is going to offer you less. The unique aspect of an auction is that people are offering you more. Also, as soon as you set a price on an object you are limiting the result to that amount in the best case scenario. You have therefore eliminated any upside potential.
Power in Numbers
At a well publicized auction there will also be many other items like yours, which creates a powerful marketing tool to gather all interested parties together for one large event that offers a very large selection of items to choose from. It’s the easiest way for a collector to view the maximum amount of material to feel that they have made an informed decision.
Because an auction company is selling hundreds of other items like yours, it does not need to charge as much commission as a retailer would. Everyone knows if you are selling more volume you can charge less. Most auction companies charge between 5% – 25% seller’s commission. Most dealers or retailers need to charge far more to cover their expenses. An auction company sells millions of dollars worth of material in one day, the best retailers sell as much in an entire year. Consignors therefore get the benefit of the large volume discount when costs are considered.