Langton's FIXED PRICE. Exchange

[Alan Foo]

Do not be fool by Langton's fixed price exchange. I had a couple of wines which was passed through in the auction and it went into the Langton's exchange. When I question them regarding the prices of my wines in the exchange (which is 15% higher than my reserve). I was told by Langton's that it is their New policy "have to add the 15% because the end result is we do not charge the buyer in the exchange any commission.

From what I see their % of Passed In wines is very high. Langton's policy is to sell as many as they could of your wines at a low low price. They have make it harder for you to adjust your reserve prices by yourself. All this has to be done by sending an email regarding the new reserve prices to them.

alan

[dave vino]

Probably got sick of people setting silly reserves and using them as free storage.

[orpheus]

That doesn't make sense, Dave. They are putting them on the exchange at the reserve price set by the seller, plus 15%. So they are still going to hang around in storage.

[mark as]

Do not be fool by Langton's fixed price exchange. I had a couple of wines which was passed through in the auction and it went into the Langton's exchange. When I question them regarding the prices of my wines in the exchange (which is 15% higher than my reserve). I was told by Langton's that it is their New policy "have to add the 15% because the end result is we do not charge the buyer in the exchange any commission.

The net result is the same, they're now just listing the price inclusive of buyers premium. So rather than listing the price and then adding 15%, they're listing the total price. If anything it's clerer for the buyer what the total price is.

I don't see what the problem is.

[orpheus]

Yes, that's what they are doing, and I agree, it is fair enough.

I think the reserves are often a bit high.

[Brucer]

I have wine currently at Langtons for auction, and it looks like things have changed a bit since I sent my last lot to auction about a year ago.
I have emailed them to find out what changes have been made to the system, and will comment when I know.
I had wine go into another auction without me knowing. I previously was advised, and then lowered any reserves if I felt I needed to.
I have sold wine through Langtons for a few years, and am generally happy with the service I receive.

[Hacker]

I have wine currently at Langtons for auction, and it looks like things have changed a bit since I sent my last lot to auction about a year ago.
I have emailed them to find out what changes have been made to the system, and will comment when I know.
I had wine go into another auction without me knowing. I previously was advised, and then lowered any reserves if I felt I needed to.
I have sold wine through Langtons for a few years, and am generally happy with the service I receive.

The original level shown for an item is $1 less than the reserve. So make one bid and it is yours, unless someone outbids you. So you know in advance what the reserve is, as opposed to the 'old' system where you were bidding against the Langton's computer until the reserve was met.

Granted, reserve levels are often too high, and various items return time and time again.

[TiggerK]

Yet even last week, I have bid on wines where the estimate is say 20-30, and my bid is 16 and I've won the item... how does that work?

[rosewaterwrx]

So there is no commission when purchasing from the exchange? I could have sworn there was or is this a recent change?

The price guides can be a bit strange I agree and it seems that the clearance rate has dropped dramatically over the last year or two??

I use Langton's a fair bit and I don't feel the value is what it was, my main beef though is that in the past 2 years I have had to contact them for 90% of deliveries to query why they didn't send everything or why my wines were picked up 2 weeks ago but aren't yet listed for the current auction or just annoying little things like that. I must have at least 20 different emails ending with our apologies etc etc. They once offered to give me a free years membership as a gesture of goodwill. As a very regular buyer and seller I thought that they tended to waive the annual fee anyway??

I would love to have a 'wish list' available especially for the more unusual wines that rarely show up. I may want to write a list of 50 wines that if by chance show up at auction I automatically receive an email to tell me to make sure I pay attention to this weeks auction. I think it'd be a mutually beneficial inclusion.

[TiggerK]

The commission is still there on the exchange, they just now automatically include it in the price listed on the website, so the price you see is the price you pay, but this price includes their 15% commission. Previously you had to add 15% to the prices listed on the exchange website, not any more.

[dave vino]

That doesn't make sense, Dave. They are putting them on the exchange at the reserve price set by the seller, plus 15%. So they are still going to hang around in storage.

Soz Orpheus, my comment was more a general thing relating his comment about Langtons selling his wines at a low, low price. Re-reading my comment I see what you mean about it not making sense.

My main gripe and if someone can show me otherwise I will be very grateful, how do you search the Exchange?!?!

[Hacker]

Yet even last week, I have bid on wines where the estimate is say 20-30, and my bid is 16 and I've won the item... how does that work?

The original bid price is different to the estimate. It is the bid price that counts, and it is $1 lower than reserve.

[Brucer]

Yet even last week, I have bid on wines where the estimate is say 20-30, and my bid is 16 and I've won the item... how does that work?

The estimate is what they think the wine could sell for based on previous sales.
Is you have won the item at $16, it simply means that the seller has set their reserve at $16.
Sellers can set their reserves below the recommended price range if they wish.
When sellers set their reserves, they can see what the actual last sale price was. It may have been $16, so the seller set their reserve at that price.

[mark as]

The original level shown for an item is $1 less than the reserve. So make one bid and it is yours, unless someone outbids you. So you know in advance what the reserve is, as opposed to the 'old' system where you were bidding against the Langton's computer until the reserve was met.

While they are starting the bids higher now, this isn't always the case. I think they are starting them $1 below the default reserve (90% of low estimate), so if the reserve is not adjusted any bid above the starting price is a winning bid (unless outbid). But if the reserve is adjusted up, you still don't know if you're bidding against a real person or just the reserve. I've been bidding on and following a few wines where this has been the case. I've bid them up, only to see them passed in and then listed on the exchange, which effectively shows you what the reserve was set at in the auction. I've followed certain wines through auction and exchange this way, and over time their reserve may drop to a price I'm prepared to pay.

[orpheus]

The original level shown for an item is $1 less than the reserve. So make one bid and it is yours, unless someone outbids you. So you know in advance what the reserve is, as opposed to the 'old' system where you were bidding against the Langton's computer until the reserve was met.

While they are starting the bids higher now, this isn't always the case. I think they are starting them $1 below the default reserve (90% of low estimate), so if the reserve is not adjusted any bid above the starting price is a winning bid (unless outbid). But if the reserve is adjusted up, you still don't know if you're bidding against a real person or just the reserve. I've been bidding on and following a few wines where this has been the case. I've bid them up, only to see them passed in and then listed on the exchange, which effectively shows you what the reserve was set at in the auction. I've followed certain wines through auction and exchange this way, and over time their reserve may drop to a price I'm prepared to pay.

If this is correct, then this is misleading and deceptive, and should be reported to the ACCC.

[Hacker]

The original level shown for an item is $1 less than the reserve. So make one bid and it is yours, unless someone outbids you. So you know in advance what the reserve is, as opposed to the 'old' system where you were bidding against the Langton's computer until the reserve was met.

While they are starting the bids higher now, this isn't always the case. I think they are starting them $1 below the default reserve (90% of low estimate), so if the reserve is not adjusted any bid above the starting price is a winning bid (unless outbid). But if the reserve is adjusted up, you still don't know if you're bidding against a real person or just the reserve. I've been bidding on and following a few wines where this has been the case. I've bid them up, only to see them passed in and then listed on the exchange, which effectively shows you what the reserve was set at in the auction. I've followed certain wines through auction and exchange this way, and over time their reserve may drop to a price I'm prepared to pay.

Oh ok, I'm not doubting you, it's just my observation from offering about 30 or so items and bidding on about the same number over the last 12 months. Each time my item was listed it was $1 below my reserve. I must admit I have never adjusted upwards. Same when I have bid.

Update: I just spoke with a helpful gent at Langton's who confirmed that for 95% of their transactions the opening bid is $1 less than reserve. There is always that pesky 5% to confuse us though.....

[orpheus]

If they "auto-bid" up to the reserve after accepting bids below the reserve, then that is misleading and deceptive, because it appears to the bidder that there is a competitor for the wine, and a market for the wine at a higher price than their opening bid.

If this practice continues to occur, then it should cease.

[mark as]

If they "auto-bid" up to the reserve after accepting bids below the reserve, then that is misleading and deceptive, because it appears to the bidder that there is a competitor for the wine, and a market for the wine at a higher price than their opening bid.

If this practice continues to occur, then it should cease.

I don't see anything particularly wrong with it. You're merely bidding against the vendor, as you would at a house auction.

I guess the one key difference is that you don't know when a wine is selling or not, whereas at a house auction they will declare the home on the market, after which vendor bids are illegal. So it might be nice if Langtons introduced that sort of system, where you knew at what point you're bidding against another bidder, as opposed to the vendor. But I don't think what they do currently is at all illegal.

[orpheus]

If they "auto-bid" up to the reserve after accepting bids below the reserve, then that is misleading and deceptive, because it appears to the bidder that there is a competitor for the wine, and a market for the wine at a higher price than their opening bid.

If this practice continues to occur, then it should cease.

I don't see anything particularly wrong with it. You're merely bidding against the vendor, as you would at a house auction.

I guess the one key difference is that you don't know when a wine is selling or not, whereas at a house auction they will declare the home on the market, after which vendor bids are illegal. So it might be nice if Langtons introduced that sort of system, where you knew at what point you're bidding against another bidder, as opposed to the vendor. But I don't think what they do currently is at all illegal.

No, it is not acceptable, for the reason that you say. The assumption is that you are bidding against another bidder, not the vendor. This makes it misleading and deceptive, which is a civil contravention of what used to be section 52 of the Trade PRactices Act, and is now a contravention of the Australian Consumer Law.

Here is a blurb from the ACCC;

"What is misleading & deceptive conduct?

There is a very broad provision in the Australian Consumer Law that prohibits conduct by a corporation that is misleading or deceptive, or would be likely to mislead or deceive you.

It makes no difference whether the business intended to mislead or deceive you—it is how the conduct of the business affected your thoughts and beliefs that matters.

If the overall impression left by an advertisement, promotion, quotation, statement or other representation made by a business creates a misleading impression in your mind—such as to the price, value or the quality of any goods and services—then the conduct is likely to breach the law."

As I said, I am very surprised that Woolworths has not stopped the practice. I would have thought that it likes to operate in more subtle ways to achieve outcomes it wants .

[mark as]

But how is it any different from a house auction?

At a house auction there is no legal requirement to declare when a property is above reserve, it has merely become convention to attract further bidding. But I believe they have no obligation to declare, and can actually move the reserve up or down to suit themselves. You're always effectively bidding against what he vendor is prepared to sell for, just like at Langtons. I find the whole house auction process frustrating, so understand that it is frustrating at Langtons too. But I don't think it's illegal. Perhaps someone more familiar with the inner workings of house and/or wine auctions can clarify things.

[ticklenow1]

I guess the difference is in a house auction, the auctioneer states that he is making a vendor bid. In an Internet auction such as Langtons, you have no idea who you are bidding against. It could be another bidder or merely Langtons pushing the price up artificially. I have had issues with some of their practices which I see as shady at best, but if you want old collectable wines then you almost have no choice then to go through an auction house. There is no doubt that the way they conduct their auctions has changed in the last few years. It is maybe better for the sellers now but having never sold, only bought, I can't be sure.

At the end of the day, if you don't want to pay the prices, don't. I occasionally have secured a bargain on Langton's but they are becoming much harder to find. The clearance rate has definitely dropped the last couple of years though. You only need to check the sales page after an auction has finished. Maybe this is their way of maximising the selling price which benifits them through an increased commission and the seller through a higher price recieved. If the wine doesn't sell, then who does that benifit? Also you can note the wines that are passed in each auction and just keep coming up next auction. Whether this is due to their new auction practices or the state of the economy is definitely up for debate.

Ian

[mark as]

I guess the difference is in a house auction, the auctioneer states that he is making a vendor bid. In an Internet auction such as Langtons, you have no idea who you are bidding against.

Ian, is it law that the auctioneer must state that it's a vendor bid? If so, I can see why the Langtons approach would seem out of step with this.

It would be great to know whether you're bidding against reserve or another bidder. If it's the case in house auctions that vendor bids need to be declared now, then it would make sense that Langtons clarify in a similar manner.

I have heard via conversations with people at Langtons that a lot of wine that swings between auctions and exchange at the moment, and is not selling, belongs to a few vendors who they are trying to convince to bring down their reserves. High reserves and high percentages of pass in lots are generally not in the auctioneers interests. Perhaps a more transparent bidding process would actually compel these vendors to seek more realistic targets, and thus increase the selling rate, which is in Langtons interests.

[orpheus]

I guess the difference is in a house auction, the auctioneer states that he is making a vendor bid. In an Internet auction such as Langtons, you have no idea who you are bidding against.

Ian, is it law that the auctioneer must state that it's a vendor bid? If so, I can see why the Langtons approach would seem out of step with this.

It would be great to know whether you're bidding against reserve or another bidder. If it's the case in house auctions that vendor bids need to be declared now, then it would make sense that Langtons clarify in a similar manner.

I have heard via conversations with people at Langtons that a lot of wine that swings between auctions and exchange at the moment, and is not selling, belongs to a few vendors who they are trying to convince to bring down their reserves. High reserves and high percentages of pass in lots are generally not in the auctioneers interests. Perhaps a more transparent bidding process would actually compel these vendors to seek more realistic targets, and thus increase the selling rate, which is in Langtons interests.

Mark, there does not need to be an express law that a vendor bid must be stated, though most States have such legislation in relation to real estate auctions ("dummy bids" are not allowed). It is clearly misleading and deceptive, which is a contravention of the Australian Consumer Law, because it gives the impression there is a market for the wine at a higher price than there actually is.

Who wants to join a class action ?

[mark as]

Who wants to join a class action ?

I'll pass. I might prefer a more transparent system, but for many of the wines I want I don't have other avenues to pursue them.

[orpheus]

Who wants to join a class action ?

I'll pass. I might prefer a more transparent system, but for many of the wines I want I don't have other avenues to pursue them.

Yes. I haven't used Langtons for several years. There is too much discounted wine available from various sources to tempt me back.

[Brucer]

As a seller with Langtons, I have confirmed the following....

The exchange selling price is the sellers reserve. The buyer then pays 15% commission over that.

When selling at auction, the maximum reserve price a seller can put on a wine is the low price of the selling price range estimate.
For example, if the selling range is $100-150, then the reserve must be $100 or lower. It used to be up to the midway point, ie $125. But now it is $100.

It means buyers will buy cheaper, and sellers must accept lower reserves, and some lower selling prices.

As a seller, this is not very appealing.

[mark as]

As a seller with Langtons, I have confirmed the following....

The exchange selling price is the sellers reserve. The buyer then pays 15% commission over that.

The price listed online now includes the 15% commission. So the price that's shown and what you pay is the sellers reserve plus 15%. Did I misunderstand you or is that what you mean?

When selling at auction, the maximum reserve price a seller can put on a wine is the low price of the selling price range estimate.
For example, if the selling range is $100-150, then the reserve must be $100 or lower. It used to be up to the midway point, ie $125. But now it is $100.

I have also been told this, except that it is very clearly not the case all the time. Many wines are going through the auctions for reserves well above the low estimate. Perhaps they are sellers who had their wines at Langtons before the new systems came into place. Or perhaps they're sellers who for whatever reason (eg volume of sales) are allowed some dispensations. But the "rules" seem more flexible than they'd have us believe.

[mf]

I was not very impressed when they told me the expected price on some wines I was selling would be $15 to $25 and then one of the wines was given a range of $10 to $20 - i.e. I would now have to sell if somebody bid at $10. It was particularly unimpressive given the wine actually sold for greater than $20 (so they were a fair bit off even when using very wide range).

It seems auction sites are often most aligned to buyer's (e.g. Ebay which practically only allows buyer feedback and no meaningful seller feedback), which is unsurprising given this also aligns with the auctioneer's objective.

[GRB]

As a seller with Langtons, I have confirmed the following....

The exchange selling price is the sellers reserve. The buyer then pays 15% commission over that.

When selling at auction, the maximum reserve price a seller can put on a wine is the low price of the selling price range estimate.
For example, if the selling range is $100-150, then the reserve must be $100 or lower. It used to be up to the midway point, ie $125. But now it is $100.

It means buyers will buy cheaper, and sellers must accept lower reserves, and some lower selling prices.

As a seller, this is not very appealing.

Not a big deal in most cases the estimates are fanciful these days anyway. Check a few yourself and they bear no relationship to what a wine has sold for recently, which was the case in the past. This is probably the reason for the low clearance rates yet woolies want's to blame the vendors . I have seen estimates for wine that has sold numerous times and never reached the estimate. It is now a figure that they would like to see it sell for not what it is worth which is determined by the market.

[markg]

Estimating a wines value is a tricky business (there are loads of scientific papers on the subject, mostly crap if you ask me). As mentioned many times before on this forum, wine has no intrinsic value at all beyond the pleasure it can give (or as a chemical additive ), thus we have to look at historical prices people are willing to pay.

A couple of points from my point of view only (not representative of the wine auction community as a whole, they may do things differently):

- Prices fall as well as rise which is why reserves are "suggested" to be set at less than the lower price range. At its base level its an agreement between what both the vendor and the auctioneer is comfortable with.

- Low values are usually the historical average sale price of the wine over a given period. Highs are .. well... the historical highs, again, its a grey area about the period of time, most of the time its the all time high.

- Low value aggregation is another issue. I personally use the published values from as many Australian auction houses as possible as well as my own (looking out for any anomalies and outliers), oh, and I generally ignore ebay prices, I find its not really representative of the mainstream wine market.

- I price wines with little or no history at the wholesale price OR if thats unknown then at 40% less than the lowest price as shown on the internet (professional wine searching option).