Are Auction Houses to Blame? The 2023 Whisky Market Crash (Ep. 4)

[@MarkLittler]

Please don't mention specific auction houses by name - but feel free to share your experiences.

[@ScottKinnear]

Mark I emailed you through your website form last week, But no response? Perhaps you had some timeout and catching up, just wondered, your a good guy so I dont think you would rubber me 😜😄👍

[@l.l.deno812]

Great video Mark, many valid points. One other thing that has bothered me, is that different auction houses apply different methods of ending an auction. From my point of view, when you bid on a particular bottle, you don't want that uncertainty of an unknown end time just because people are still bidding on OTHER bottles. Some auction houses don't close their auction until there hasn't been a bid for 10 minutes across the entire hundreds of lots. It doesn't make sense to me, and it removes that excitement of watching the auction clock run out on your item and knowing whether you've won or not.

[@WhiskyHunter]

Protection against bots and automation. It would probably be a shame if they outbid you for the desired bottle 0.1 seconds before the end of the auction.

[@peterc3822]

@@WhiskyHunter that's fixed if you put your max bid and the auction bids up to that point. Many do this

[@WhiskyHunter]

@@peterc3822 I wouldn't feel comfortable counting on a single bet and prematurely anticipating a win at one rate, only to receive a higher one at the last moment. When using MAX BID you can also add 10 minutes to the auction end time. Since the feeling of the real end of the auction disappears.

[@michaelmorrison3117]

Hi Mark. You videos are pure gold, so to the point, factual and so preceptive of the current whisky market. Can I ask your views on a bug bear of mine please. Insurance! I bought 2 bottles at a main online auction house. I didn't take out their insurance as I have my own. I received tracking from them but the bottles never arrived and it would appear that the bottles never left the auction house. The auction house washed their hands of this and I claimed on my personal insurance. Online insurance is on average 3%+ of the hammer price which is very expensive. The bottles were not damaged but just lost. Surely there are laws for any consumer to be reimbursed if goods are not received? It happens for other goods, so why not whisky? I feel on line whisky auction houses insurance charges are excessive. Im sure they will get commissio0n from the insurance companies but is this (a) legal, (b) fair for bottles not damaged but just "lost" where the courier cannot provide any information? Many thanks indeed. Michael in Orkney

[@michaelgallagher8678]

Terrible story Michael. I've been buying from auctions over the past x4 yrs, and sometimes refuse insurance costs as the auction houses (x4) I use are very good (fingers crossed!). ps. We were on Orkney a couple of yrs ago, and thoroughly enjoyed calling in at Scapa. Professional and knowledgeable staff..

[@EdSweeney-u9w]

I don’t know how traditional auction houses stay competitive in the whisky market. They are stuck in the 1990s with post auction services. They treat every sale as if it’s a Koon’s balloon dog, Marc Quinn blood sculpture or Banksy wall. Two recent experiences highlight the post auction shortfalls and advances. Post sale with the old, venerable auctioneer, I must figure out a form of payment (easiest wasn’t accepted). I must find an appropriate shipper. I must find proper insurance coverage. I must coordinate between auctioneer and the shipper. I must manage all post sale issues as everyone dodges liability. On the flip side, the upstart auctioneer streamlined payment, insurance and shipping arrangements. Total time to review invoice, select shipping/insurance and pay the invoice was 26 seconds. Time is money and this was easier than Amazon. The choice is easy.

[@scottstevens4633]

As to multiple bottles of one whisky, I consigned springbank 30yo 2022 edition into a 'certain auction house' and when it went live, I realised 31 other bottles were for sale too.. That's a pricey rare scotch but this auction had a plethora of the stuff

[@humphandhumbug]

I’ve heard similar where somebody put a Macallan Elchies Black 2019 into an auction as they decided they didn’t want it and they were needing the money. Auctioneer recommended no reserve. There were over 80 of them in the same auction and my friend lost over £100 from RRP. This was a supposed reputable auctioneer . Some are just on the make.

[@thewhiskyenthusiast]

Very informative video. Anyone who's bidding or selling should watch this!

[@garynolan7484]

Thank you for the insights....pretty new to the collections...so appreciating all the advice...

[@kirkgrannell2978]

Hi Mark I totally agree, I bid on sites based in Scotland, and after the bell tolls somewhere after 9pm, with the warning once fewer bids are received we will close. I cant even be bothered to see if I have won. And wait until the next day to see. With regard to the same bottles being sold at the same time, its like betting on a horse, but 3 more are running in the same race with the same name. Which one do you pick and how do you differentiate between them, especially when the auction may be closing, all kind of thoughts enter your head. I usually have a stats site open at the same time to check prices independent of the auction, but this itself opens up a load more questions. Overall I make some good potential buys, but do just as well at retail without the hassle, with more time to asses the product. Still doing the lottery, but love Whisky collecting. Happy days.

[@TheAldawg77]

I always find the 'bottle performance' graph super helpful. Also just as a general observation, on a down turn the liquidity in the top end of the market seems to dry up faster than the lower midmarket.

[@leroylanda8106]

I’ve had a auction house tell me not to put a reserve on as it tends put buyers off, which validates your point mark.

[@scottstevens4633]

I remember the days when one of the non-scottish based auction houses used to sell everything at no reserve... They had a slightly higher buyers premium to compensate. Nowadays about half their lots have a reserve, so I bid on only no-reserve items now, cutting down on the lots I will bid on

[@iansunderland7444]

Absentee bids - the auctioneers seem to believe that's a minimum price rather than a maximum price. Why? Surely as an agent for the buyer and seller theres a conflict here?

[@alanscott9258]

I've been following these auctions since 2019. The first thing to say is that the practices you mention here were prevalent while the tide was lifting all boats so are unlikely to be a major cause of the downturn. I use two houses. One discloses reserve prices the other doesn't. A few years ago (while the market was rising) I ran a little trial on the effect of reserve prices on auction outcomes where there were at least two bottles in auction: one with and one without reserve. Where the reserve was disclosed bottles with a reserve fetched lower prices than those without a reserve. Where the reserve was undisclosed, those with a reserve fetched higher prices than those without. People would put real money on the table to find out what the reserve was and people would often bid up the bottle with the reserve while the ones without languished. I can't claim that my findings were statistically valid and I have no idea on the psychology behind it. It seemed mad to me.

[@douglasdarroch9550]

You have hit the nail right on the head Mark.

[@hernan2075]

20 online auction houses in the UK. ... Buy from Australia... We have 4 Whisky Online auction house (may sell for cheaper due to exchange rate)... however not the range of bottles in in the UK.

[@andrewmcintosh6413]

Hi, A couple of thoughts from me. For example say I have a bottle in my collection at home I will check online auction houses to see how much the same bottle got sold for previously or is currently beinh bid on, or I will use a search engine to check out what an online retailer is selling it for. I would guess ( perhaps wrongly ) if Iwere to sell the bottle at an auction house I would get a price sold for my bottle below the price of an online retailer because bidders will bid on a bottle to get a bargain, but when I find the same bottle recently sold but at a price perhaps lower or roughly about the same price I originally paid for it it can be a deterrent in putting that bottle and others up for auction in the future. Could auctioneers display the reserve price online at the start. Would this not help bidders start off their bids at the reserve price thus reducing time and effort wasted in bidding for the bottle and thus be better for the seller who have put their bottle up for auction? I'm open for constructive criticism if anyone disagrees. Lastly please keep up with the great channel.

[@scottmichals9191]

I have sold 43 bottles at auction in the past two weeks and I have 45 bottles going up for auction on the 22nd. From my experience, you get much better results at the "No Reserve" auction. People get excited about the no reserve bidding and the interest level stays higher throughout. The auction house that I use has each auction labeled as "No Reserve" etc and also has useful filtering tools. There's still a lot of money to be made in whiskey just tread carefully!

[@canahmet8214]

The first bottle of Laphroaig- 17yr old Francis Mallmann to appear on auction went for over £1,500. A few weeks later, it appear again on another auction site. It sold for £675. This bottle was only available through a ballot & priced was around £550.00

[@WhiskyHunter]

The evolution of the whisky secondary market might be imminent. As more auctions emerge, they can foster healthy competition, prompting established players to rethink their business strategies. Auction platforms that aim to remain relevant will likely need to embrace transparency and perhaps reconsider their profit margins.

[@eneandrenika7534]

What you think about Indri winning double gold.

[@canahmet8214]

I've counted 12 bottles of Springbank 2013 13 Year Old Local Barley 2024 release on three different auction sites. This is one week after the general release to retailers. This can't be the work of the Flipper. I think retailers are putting the majority of their allocation straight onto auction & keeping a few bottles for retail sale. This bottle was retailing for around £90. On aution they are got for around £270+

[@humphandhumbug]

I think auction houses should be audited to see who is regularly selling and is effectively a trader. That would destroy the flipping market and help the correction of the secondary market.

[@WhiskyHunter]

And why destroy the flipping market? It's part of the modern market.

[@humphandhumbug]

@@WhiskyHuntertakes limited supply out of the hands of those who will drink it. Serial flippers are effectively illegal traders.

[@may17guy]

Only in nice dreams

[@markfiddy395]

I follow 2 Glasgow based online auctions which provide v good service. But the rise of these on line houses has fed the bubble & the bottle flipping market as they made it v easy to quickly offload your Springbank or Macallans and turn a quick profit. I think the volumes of lower end will shrink as the profits are no longer there. Buyers are becoming more choosey looking for ltd edition aged statement rather than core range.

[@chaim72]

I fully agree with everything you’ve said as a weekly auction buyer across multiple platforms it’s very annoying oh and something more annoying 1 particular auction keeps sending my whisky and flat pack the whisky boxes separately causing them to have creases 😂

[@barryhamilton7845]

As a miniature collector what annoys me about some auctions but one in particular for example is if I have a boxset of three whiskies it costs me £6 plus vat to list them each no discounts given and so if that boxset only sells for let's say £20 then I owe them money which I think is a total disgrace on their part,and it would be the same if I put ten bottles in a lot,it would cost £70 plus vat ,and if they only sold for £20,then I'd owe them ££60 or so. I know this because I emailed them and I got an email back saying so.Total rip off,and they couldn't careless,it's all about what they can get from you,considering on average theres no less than 7k bottles every month on that auction site with them getting money for listing a few pound more for reserves and then what they make from commission from the buyer.

[@Habe997]

There is no better way to explain it. I am still bothered by the often limited payment methods and sometimes unclear fee prices and shipping costs.

[@finerhealthierlife1308]

It's just a pull back the original investor has sold and the minority of just getting in to buy takes up the slack but it will slowly go back up

[@TheAsbnat]

Sorry, I normally like your videos but found this repetitive. Reserve, Reserve, Reserve.

[@MarkLittler]

No worries - this one was a bug bear for me so might have got on my high horse - BUT - if you bid regularily at auction you will get just that feeling - reserve not met...I'm off again sorry 🤣