Weekly Auction Watch by Andy Simpson – October 24, 2014
Not only did Bonhams and McTears hold their respective whisky auctions on the same day this month; they appear to have subsequently progressed from a bit of competition to all-out war through their respective marketing departments.
The question posed by McTears is “Why Sell Whisky Anywhere Else?”
The advert below was issued by McTears following their recent auction. I think it’s a great piece of marketing to be fair – Disruptive, factual and to the point. So could, or indeed would, Bonhams respond?
Fair play to them, they did. With this –
The first thing we need to do is compare apples with apples. Bonhams always quote their achieved sale prices including 25% buyers premium. The £20,000 quoted for the above 50 year old Glenfiiddich would have actually been a hammer price of £16,000 less fees and commission to the seller. McTears haven’t done this; they have, far more fairly in my view, purely reported the hammer price.
I also think it’s a bit like cutting off one’s nose to spite one’s face by purposely holding significant whisky auctions on the same day. Commission bids aside, surely both auctioneers want the biggest captive audience possible. Maybe a truce not war on this occasion could have yielded better results for both respective auctions?
By comparing apples with apples we can actually see which is the ‘best’ auction-house for sellers; which one obtains the highest hammer price with the lowest sellers commission. In todays auction-rich environment it would be unfair to exclude on-line auctioneers from this exercise. So let’s compare some numbers from Bonhams, McTears, Scotch Whisky Auctions, Whisky-Online Auctions and relative newcomer Whisky Auctioneer.
Let’s take a look at a small parcel of regularly traded but heavily desirable bottles to see which auctioneer obtains the highest hammer price and the highest net gain to a seller. I’ve used the most recent sales result from each auctioneer for – Port Ellen 1st Release, Macallan Private Eye, Ardbeg Lord of the Isles, Bunnahabhain Auld Acquaintance, Highland Park Bicentenary and Glenmorangie Culloden.
In doing this, I’ve assumed Bonhams (as they don’t publish the information) sellers commission at 15% plus VAT plus their 1.5% (plus VAT again) loss and damage warranty fee, so a gross deduction of 19.8%. For McTears it’s 15% plus VAT, for Scotch Whisky Auctions and Whisky-Online Auctions it’s 10% plus VAT and for Whisky Auctioneer it’s 5% plus VAT. I’ve excluded any listing fees or reserve fees which are around £3 – £4 each per bottle depending on the auctioneer but they make little difference to the end result.
The results speak for themselves.
Bonhams performs the worst on both a hammer price and a net proceeds basis with McTears very slightly ahead on both. Then the digital auctioneers show how an online offering with reduced costs can really benefit customers.
The difference between the top result from Whisky Auctioneer and the worst result from Bonhams is a staggering £1,779. There’s a £1,697 difference between the best performer and McTears.
Clearly this isn’t the full picture. Certain auctioneers sometimes get the best prices for slightly different bottles. Bonhams has obtained great results for top end Macallan and some exceptionally rare old indie bottles. McTears has the current record for Black Bowmore and does very well with their multitude of bundled lots (granted more from a buyers perspective). Whisky-Online Auctions specialise in the old and very rare for which they get exceptional prices (you just don’t see these rarities sold at other auction houses to get a direct comparison). Scotch Whisky Auctions regularly obtain the best prices in the market for a huge variety of bottles. If Whisky Auctioneer have a desire to become bigger, which we have to assume they do, that will come with additional cost (people, premises, rent, rates and the cost of bottle acquisition don’t come cheap). Can current commission rates be maintained? Having asked this question directly to Whisky Auctioneer, the desire, certainly for the foreseeable future, is to maintain the current commission structure.
So back to the question McTears ask us on their marketing material – “Why Sell Whisky Anywhere Else?”
I for one can think of 1,697 reasons as highlighted above!
Until next week.
Posted in Monthly Whisky Market Watch by Andy on October 1, 2020