utopis

YOU'VE GOTTA BE KIDDING ME!

25 posts in this topic

He doubled his money... When I find a piece for EUR100 and get EUR200 for it, I am a happy camper as well ;-)

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Not unheard of. I know of a dealer who usually multiplies the hammer price by 3 before putting the items on his own webshop.

Whether it's a good strategy or not I don't know... the turnaround time for his items seems to be measured in years...

/Mike

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Lucky my pet dealer isn't like that, he buys odd things that I have failed to notice in auctions and usually works on a 20-30% margin which I can live with, mind you he has a high turnover. and therefore prevarication can result in losing the item.

Paul

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Lets be realistic, if you add the auction fees to what he paid, and subtract the tax from his selling price, the profit becomes less.

Many dealers have a 100% markup, it just has a wow effect because of the item for sale here.... but look at it this way.... if he had invested 15 000 in 30 small items that he sold at a 100% markup or 15 000 in a single item that he sold at a 100% markup, his bottom line is the same.

I think the problem is, for most of us this is way above anything we could ever afford and we simply cannot get over the sum made on this.

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hours ago, Chris Boonzaier said:

Lets be realistic, if you add the auction fees to what he paid, and subtract the tax from his selling price, the profit becomes less.

Well, let's take a closer look at it, shall we:
The selling price was 13K, Rauch's fee + vat is 18.3 %,
So Weitze paid roughly €15,400 (not counting shipping).
I don't know how much Weitze makes a year, but making an educated guess here, I would say that when you count in all the costs (staff, business premises, tax subtractions for all the money spent on future merchandise) and subtract it from his revenue, his total  tax rate is probably not that high I'd say something in the mid 30% range. Meaning that he made a profit of roughly 8K. Now keep in mind that the turnaround for that was under a month and the actual time spent  on one little item not that much. That is a yield of 53%, 636% extrapolated on the year.

4 hours ago, Chris Boonzaier said:

if he had invested 15 000 in 30 small items that he sold at a 100% markup or 15 000 in a single item that he sold at a 100% markup, his bottom line is the same.

But you see, it's not. 30 items require much more work: buying, photographing, creating the description, putting it online, storing it, communicating with the buyer, shipping. This results in a much higher transaction cost because the cost needs to be multiplied by 30! But wait that's not all: seeing as it is not very likely that he will sell all 30 items in one month, 2-6 month is more likely (based on his large client base, though that might even be a little too optimistic), that means that the monetary value of these items is not freely available, i.e. cannot be reinvested until the items are sold. Basically, you are losing  money for every month these items lie around unsold, the amount of which is at the very least equal to your average yield on the common ETF, [i.e. between 1.3 and 4% (for 2-6 month respectively - based on an 8% ann. avg., not counting taxes)].
So all in all there's a huge difference whether you sell the same amount as one or as thirty items. 

In my opinion it comes all down to this: 
Of course sellers have to set a markup, otherwise they won't make a living, but usually you don't see it done so blatantly; Rauch is the second largest auction house for ODM in Austria, Weitze is the largest seller of ODM in Germany, to see the same item in such a short time frame with a price increase of 100% in such prominent places...

Also, and I think this is key here: Weitze didn't provide any service at all. Sure it takes a lot of time and work to create a business like Weitze's - building a huge customer base and reputation. 
So if collectors, relatives of deceased collectors or relatives of the awardees turn to him to sell something, it's due to his merit (then there is the whole work on the transaction itself). But this is not the case here. The item was already on sale to the public. No one except Weitze really profited  from this: not the original seller (the feeling "what he could've gotten" for this), certainly not the buyer (he'll probably never get his money back on this thing) or the potential buyers who where outbid by Weitze at the auction. It's not that due to Weitze's work an item was offered to the collector's market that otherwise wouldn't have been available to the public.

Now, don't get me wrong, I fully support it from a pure free-market point of view, that's how the economy works, it's the same as the car dealer of your choice. But just look at the art market to see what happens if this gets out of hand: Paintings that go for millions, are (very often) not bought by collectors but rather by investors (sometimes even worse: money launderers). Meaning that most private collectors who actually appreciate these paintings will have no chance of acquiring them, instead they'll lie around in a vault or will decorate a mansion's living room, at best.  

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Is it worth 30K? If so then he is justified in asking that price regardless of what he paid for it. If it is not worth 30K then he is asking to much. His purchase price and profit margin are not the issue. If he paid way below market price why should he pass the savings on to the buyer? I don't get the beef.

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The problem with this as previously pointed out, is not so much the profit Weitze makes, it is how dealers artificially influence market prices. Any item is worth what the buyer wants to pay and high end pieces are always going to appeal to a certain market. Weitze is a business man, he wants to squeeze the biggest profit he can, he knows his customer base and obviously judged correctly what someone is willing to pay. This unfortunately just makes collecting become more and more unreachable with many high end pieces now far beyond the price the average collector can afford.

This is the issue we face as a community, it is a shrinking hobby, becoming more and more exclusive. Many high end buyers being investors as opposed to true collectors. Sure your low end mass manufactured awards are still going to be affordable to most, with prices climbing at a much smaller margin, but their appeal becomes limited over time. You can only buy so many Iron Crosses, Purple Hearts or British War medals. So to keep expanding collections, looking for those rarer item requires deeper and deeper pockets.

How many previous collectors do you know who are no longer collecting? Ask them why. A large proportion will be for financial reasons I can assure you. The last decade has seen this really hit home. Many specialist medal auctions are inhabited by dealers and investors, with collectors walking home disappointed and empty handed because prices are too demanding. I have seen time and time again good pieces being auctioned off for crazy prices appearing on dealers sites with an even higher price tag weeks or months later. The dealers need to buy stock and auctions is one of their largest suppliers. 

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ID: 11   Posted (edited)

Yeah, it is sort of sad, but it has become a very wealthy persons' hobby. Even medals that were handed out by the millions are now going for a large chunk of cash. Still, these things cycle and there is always the the thrill of the hunt.

Edited by Ulsterman

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The thrill is in the hunt, I agree. But I just don't do that much more hunting. I did see some pictures on our sale forum I have inquired about, but it's the first time I've looked in forever.

Losing Rick L. really took the wind out of my sales and I've really struggled with wanting to continue staying active.

As far as Herr Weitze is concerned, he's a business man and I cannot fault him in a market-driven sale. When's the last time this piece came to market? There's an entire class of collectors who never deal with auctions and who simply cruise the dealer sites when they have time. It is what it is.

Nick is right, the costs of being in this hobby have risen exponentially every year for at least as long as I've been coming around. Seems like every time I find something of interest, everyone else piles in and the prices get driven up. But again, it's a supply vs. demand market we have here.

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Stogieman, good to see you. It has been the same for me after losing Rick. 

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This is a hard subject to broach.  I agree with Paul, what is that badge worth?  Is it worth the money, then Herr Wietze made himself a heck of a deal.  If not, it still sold which is the symptom of another problem all unto itself.  There are many guys with large pockets out there that don't either have time, or don't want to go out and find items.  The dealers become their sole way of attracting and obtaining the big ticket items; so they are willing to shell out the cash for items without a second thought. 

 

  The problem with this market strategy from Weitze, is it is a short term strategy.  More often than not I have seen the dealers get excited after a sale like this, and begin to pass this philosophy to all their items.  The dealer begins to believe their own hype and soon everything is getting more and more expensive because dealer "X" has it for sale.  The same goes for name brand clothes, the name adds to the price of anything for sale.  Over time however, the dealers, in reaping the immediate profits from such sales, and applying them to all their wares, are driving out collectors.  Not too many people can afford such a medal, and lets face it Weitze's Tsachapkas, 'Haubes, and Shakos aren't on the cheap side either. 

   The hobby wont survive without fresh blood, and unfortunately it is severely lacking right now.  You can almost smell the panic over at the WAF right now.  Every week there is a post about " the state of the hobby" or "where will the hobby be in twenty years".  Collectors are getting worried there wont be a market in the next decade; and lets face it, deals like this are helping that fear to become a reality.

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I agree completely that the hobby is becoming less and less accessible but, sadly or not, that is the reality of collecting things which they 'aren't making anymore'.  By its nature, what we're interested in is mainly 'limited edition'.  Sure, for WWI and WWII the numbers were only limited to hundreds of thousands or even millions, but it's been 100 years and 70 years respectively since the stuff appeared and every year X% goes into the ground, the fire or is simply lost, so inevtiably rarity goes up and with it, price.

The very first medal I ever bought was one of 50-60 in a cigar box, all silver WWI medals on their way to a jeweller's furnace because the price of silver had just hit $11.00 Canadian an ounce.  Many  of Canada's silver coins went to the same place that year [1985-6?].  Add the very things which make them attractive - rareity, for the gallantry awards, aesthetic and historical value for some of the orders, and one has a recipe for endless inflation.  How many times have you heard 'Oh, we threw those away.'?  I don't know that there is a solution, except perhaps to hope that some of the rich bidders will decide to switch hobbies [or investments]. These days I focus on research and get, I tell myself, as much fun from a singleton campaign medal whose history I reconstruct, as Lord poobah does from the latest VS he's snapped up.  That's what I tell myself! 

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Mind you there is some communist medals, E. Germany for example that even children could afford to collect on their pocket money

Paul

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On Tuesday, January 19, 2016 at 22:27, Chris Liontas said:

   The hobby wont survive without fresh blood, and unfortunately it is severely lacking right now.  You can almost smell the panic over at the WAF right now.  Every week there is a post about " the state of the hobby" or "where will the hobby be in twenty years".  Collectors are getting worried there wont be a market in the next decade; and lets face it, deals like this are helping that fear to become a reality.

I wouldn't have bought the PLM at 13K, much less 30k, but that's just my analysis of my niche in the market.  There aren't many buyers at that level, but anyone in the business loves to know them.  Weitze found one and will ride him/her for as long as possible.

Fresh blood is always the key, and necessary at all levels of the market.  The panic at the WAF is based on a market segment with outrageous prices for things that should be relatively common and moderately priced.  It is fed by a market where buyers are no longer able to judge items on their technical qualities (weight, dimensions, structure, etc), but rely on their favorite seller.  Not too long ago, buyers would know that a piece should weigh "X", with a tolerance of "Y", while now the question is "Where did it come from?" If the answer is a source that they like, then it's a "good" piece.  When you don't know the technical data on what you collect, you're at the mercy of everyone looking to sell the good, bad or ugly.  In the Third Reich market here in the US, I see two things happening: (1) new collectors get eaten alive by the sharks and (2) a general fear that the Third Reich market is eroding.  A number of the high end players I know see the end of the music in the near- to mid-term.  Many have been quitely liquidating their big ticket items for high-end British or American items.  

I don't see the market being less accessible.  Certainly prices have risen, but the demand has risen as well. As Paul notes, there are ways to collect on a tight budget.  I've sold medals from a website for two years now, and well over 80% of my sales are to people I've never heard of, who are not members of any organization of collectors, and who prefer apparently to operate with anonymity.  Those of us who are "old-school" about collecting don't understand the new buyers' mentality, but they are out there in great profusion and ready to spend if you have what they want.  I don't think the hobby is collapsing, but it is changing.  It will be a while before we really sort out what's really happening.  Just as our parents thought of us as the end of civilization, and we look at the younger generation in the same way,  neither judgment is accurate and things will continue.  They won't necessarily be worse, or better, just different. This most important thing is how the rest of us react and evolve.

We used to be limited by the number of militaria fairs we attended.  Then we had printed lists arriving in the mail box. And now, anyone with computer access can plow through my stock while living in his mother's basement.  I can sit in my office near Washington, DC, and bid in Paul's auction in London, competing live against buyers in Singapore and Buenos Aires.  That strikes me as practically unlimited accessability.  

Sorry I didn't have enough time to write a shorter post.

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Talking of dealers---may I get some commentary on a problem which I now intend to tackle.  In 2012, a trusted dealer sold me a Ottoman Army Flyer's badge that I suspect to be a fake.  I am referencing "Imperial German Flight Badges Vol. II" by Robert Pandis in this assessment.  I have contacted the dealer by e-mail (no response yet) and will do a follow-up at the SOS in person. (I still have the invoice)  My question is---as, presumably, he not obligated to do anything (ie. refund, trade, partial refund, etc.) in my satisfaction--- what is the general outcome for this type of difficulty by members of this Forum.

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Hi,

I guess the first step is to provide proof that the Item is bad. Often there are divided camps.... one guy knows its bad because "some guy on the internet told him" and the dealer knows its good because "he knows a whole lot".... the question is who convinces who...

Then, unless you hve a written gaurantee... he probably does not have to do anything.

Depending on who the dealer is and how much of a good/bad guy he is, your only satisfaction may be the "Name and shame" thing, leaving readers to take note of what happened and how the dealer responded.

 

Best

Chris

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rabaduex,

Trying to convince a reputable dealer that an item is bad using a picture in a book may not get you anywhere.  The best way to prove something is not what it is supposed to be is by comparison of a known good example.  For example, dimensions, weight, markings, distinctive pin by maker etc.  You probably know all of this already but it was worth mentioning.  Ottoman pilots badges have been highly faked and some of them are very well done.  I would guess that the dealers response would depend, to some extent, on how long it has been since the badge was purchased.  I have never been in your position where I needed to return something that I though was a fake.  I have received fake items but the amount of money involved did not warrant spending the time and effort to try and right the wrong.  I wish you good luck in your discussions with the dealer at the SOS.

Regards,

Gordon

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thanks for the enlightened commentary.  As the old timers might say, its a "hard row to hoe".  I have had experience in the past but it does not make this experience any easier.  A couple years ago, a well-known dealer at all the Shows in the US sold me a silver Prussian flight badge that was not silver (confirmed by a jeweler) and had all the peculiarities of being fake after I bought and read Imperial Sky by Stephen Previtera.  The dealer refused a refund but did do a trade with me, though I know I came out short.  I am not one to pass along such an item just to get ahead.  The other time, back in the eighties, I collected 3rd Reich photos and bought from a then well-known auction house.  When I was streamlining my holdings, I presented the same photos to the same auction house and was refused as he said the photos were not original.  I quit collecting and did not re-emerge until 25 years later.  For middle age men of some means who want a new challenge to collecting for their last twenty or so years, these episodes are a killer.  

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Hi,

I can quite believe it, most of us at some time have tripped up badly at some stage.

The advantage of a collecting community is the chance to discuss items, if possible before you buy, or as soon as possible afterwards. Dont give up hope, maybe the dealer does the right thing....

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I believe that the hobby will continue on.  As dealers realize their over-priced inventory is not selling, the prices will start falling until folks start buying again.  Militaria dealers, like car dealers, have to move inventory in order to put food on the table.  I think that there will always be an interest, IMHO.  

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ID: 24   Posted (edited)

Many of us in the U.S. face a similar but slightly different problem, particularly with firearms.  There are two parts to the problem, but they are inter-related.  The first part of the problem is that prices are spiraling upward based on bad information found on the internet.  Here in the U.S. it often begins like this: a dealer finds an item, maybe at an estate sale, cleans it up a little and then goes to the internet to find out the price of a similar one that recently sold.  Well, let's say he finds one that "sold" for $2000.00.  The dealer interprets this to mean that if he prices his at $2500.00, he's being "reasonable.  The problem at this point is that the information he found on-line isn't necessarily real.  Yea, the one he found is listed as being "sold" for $2000.00, but in reality the guy ended up bidding up his own item.  A couple of months or weeks later, you'll find the same guy with the same item, but in the meantime lots of folks "use" this information to price their own items.  At the same time, buyers see that this item recently sold for $2000.00 and he/she has always wanted one, so when another one comes up for $2500.00 it seems reasonable and he/she buys it.  Well, that simply pushes up the prices higher and higher.  The result is that prices simply spiral upward out of reason or rationality.  

 

The second part of the problem involves the big dealers who can lay out the kind of money that Mr. Rauch and Mr. Weitze  exchanged at the beginning of this thread.  The situation often goes something like this: An auction of some prominent collector is announced by an auction house.  The auction house lists the items on line and maybe even prints up a fancy color catalogue.  The day comes and collectors and small dealers show up from around the county.  When the bidding starts, however, it quickly becomes apparent that there is one or two "on-line" and/or telephone bidders who are buying everything, often paying 2, 3, 4 or even 5 times what the same item is currently selling for.  All of the collectors and most of the dealers are priced out of acquiring anything.  Occasionally the auctioneer will toss a bone to one of his friends by cutting off the bidding, but other than rare instances like that, most of us are there only to serve as "shill bidders", driving up the prices for the auctioneer.  At three auctions in the past six months several collectors and small dealers have confronted auctioneers after the events about this issue.  In once case, the auctioneer threatened to have the disgruntled bidders "removed" and basically told them not to come back.  Now, these are folks who had spent thousands of dollars just in travel to attend this auction and in the past had purchased tens of thousands of dollars of items at this guy's auctions.  In the case of another auction, the folks in the audience who had been shut out of purchasing everything discovered that the "phone bidder" who purchased the vast majority of the items was really in the back room of the auction house and was permitted to bid anonymously because he knew if people knew he wanted the item, they would just bid it up.  Well, he ended up with most of the lots anyway, spending hundreds of thousands of dollars (probably more than a million) and paying more than any of the other collectors and dealers were willing to pay.  When confronted about this, the guy became real smug and said whatever the price he pays might be, it's always  "wholesale," because he has a lengthy list of "stupid customers" who will buy anything he puts through his shop.  He went on to explain that these "stupid customers" really didn't care about the item or the history involved; they either simply wanted something to hang on the wall and brag about to their friends or were "dot-com" millionaires who were buying these things as "investments" -- on his advice of course.

Well, thanks for letting me rant.  I don't know what I'm going to do.  Some collectors and small dealers call it a "bubble" and think that it won't last.  All that I know is that items which I was able to purchase a year or two ago for $500 are now $1500 to $2000 and items that I purchased six months ago for $2000 now have a starting price for $4000 to $5000.  

Edited by dksck
poor writing!

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On ‎1‎/‎14‎/‎2016 at 17:18, Stogieman said:

 

Losing Rick L. really took the wind out of my sales and I've really struggled with wanting to continue staying active.

As far as Herr Weitze is concerned, he's a business man and I cannot fault him in a market-driven sale.

I'm with you on that one Rick......

Prices may have sky rocketed recently but it'll soon be realized that you can't eat or burn that militaria...........healthy markets (like militaria collecting) have a self-correcting behavior built into them.

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