lawrenson wrote:Hi,

and thinking about it, the T&T buyers will pay more for items at the auction than they will elsewhere (I know this from personal experience).

Cheers,
Malc

They can pay more because they only effectively pay a percentage of the final cost, even if the paperwork shows otherwise and the politics is moot. I am glad we are starting to see through all the political BS and the smoke and mirrors that have been put in place.

I just think it's immoral for Mr Toad to benefit financially from having his company bid up thousands of auctions, making additional profit regardless of whether they win or lose. Bottom line is if Mr Toad did not own or run the auction body, it is doubtful that Mr Toad would be bidding so highly or on so may items, and he would not be profiting directly from those items he failed to win.

The difference between this arrangement and the ones you have sited as comparable is that the same person does not contol the auctions or profit directly from failed bids, and he does not have a financial bias increasing the value of his dollar to him.

I think a lot of people see this sort of insider trading, or whatever the correct term is, as morally suspect.

They used to bid on everything prior to being partners in the auction.  Nothing changed

There you go using pejorative language again.  A kickback is something else.... ie coerced, a bribe, and not transparent.  

They appear to just be doing business and you don't like it.

Pipswich wrote:There you go using pejorative language again.  A kickback is something else.... ie coerced, a bribe, and not transparent.  

They appear to just be doing business and you don't like it.

I stand corrected. The words financial incentive seemed too vague, but I think things have been simplified enough for most people to see how Mr Toad gets a payout whether he wins or loses the auctions, and gets abigger payout the higher he can push the prices. And I think we all understand that what costs you or me $11.60 at auction costs Mr Toad a lot less because of all the payments and percentages he collects on the transaction.

Kickback is the wrong term. Maybe rebate or incentive discount or some such thing? I have no idea what this sort of biased/preferential financial benefit is called.

But I stand corrected on my choice of words.
Thanks, Pip.

deimos3428 wrote:Just wanted to ask one more little question.  

Are the T&T employees bidding for their own personal use, or on behalf of T&T?  One's certainly more forgivable than the other.

Personal use is a completely different ball game. This is buying up shop stock on the back of the financial bias offered them by their relationship with the auctioning body.

Gus Landt wrote:I am not making any claims about any impropriety. I am just trying to sum up the argument.  Unless I am mistaken, the argument is this:

Normal buyer off the street, bidding $10 on an item and winning:
$1 for the bid card
$10 for the item
$0.30 to pay for it

Cost for $10 item = $11.30

T&T, bidding $10 on an item and winning:
$10 for the item
-$0.75 (15%, or $1.50, of the item price goes to The Partnership. The owner of T&T is around half of the partnership, meaning he gets around half of this price, or $0.75)

Cost for the $10 item = $9.25

AGAIN, I am not making the claim that this is what actually goes on. I am merely trying to summarize the argument.  Did I summarize correctly?

Without knowing the inner workings of the business (and, as I have said, I have no involvement with the auction other than as a bidder and, for the first time this year, a seller), it's hard to say.  But I don't think the math is that simple.

First, the cost of the bidder card is $1, no matter how much you buy.  If you buy 20 items (around the number I did, probably), that's only $0.05 per item.  For other buyers, it's a lot less per item.  Also, the additional 3% is only charged if you use a charge card.  If you bring cash, that amount isn't added.  And where it is, some of that is in fact actually being used to pay the card interchange fees, and isn't profit to The Partnership (or, indirectly, T&T).

So, let's take Gus' example, and say I buy an item at $10.00.  Cost to me was about $10.05.  Of that, $8.50 goes to the seller, and the other $1.50 to The Partnership.  I have no idea what Jon Huston's investment in The Partnership is.  For the sake of simplicity, assume he's got 50% of TP, and 100% of T&T (which he may or may not; I have no idea).

That means $0.75 goes to T&T indirectly, from my purchase.  Of course, before they get that money, all of TP's costs of running the auction must be deducted.  But, again to keep things simple, assume that was all profit to them.

Let's assume instead that T&T bought the item at $10.00.  They buy so many items that the effective cost of the bidder card is going to be zero.  Of the $10.00 they pay, just like before, $0.75 would go back to T&T indirectly.  Which means they really spent only $9.25, in effect.  So, they have a $10 item, and are out-of-pocket $9.25.  But they also don't have the $0.75 they would have gotten, had I bought the item instead.  And so they don't get my money, to defray costs of running the auction.

If T&T turns around and immediately sells the item for the "market" price of $10, they end up with a profit of $0.75.  Which is exactly what I would have effectively given them, had I been the auction winner.

Except . . . if they sell it on eBay, they still need to pay the eBay fees.  So, it seems to me, they end up coming out behind.

So, why does T&T bid?  Probably, I would think, because they can buy a good number of fairly common items, at prices sufficiently below what they would obtain on eBay, to make up for both the lost profit from beating me out, and the eBay listing fees.  For the same reason, other resellers are present trying to buy up similar items.

Which gets back to another theme of this thread.  The GenCon auction may not be the forum most favorable to getting the "best" price.  But I sold at GenCon because of other factors.  The simplicity of doing so was certainly a major factor.

Bottom line, there does appear to be some, unknown, amount of a bidding advantage to T&T, given that they indirectly receive a portion of the fees from each sale.  But that benefit is limited by the loss of the profit were they to sell to a third party, plus resale fees.  In all, if my math is right, the benefit has to be quite a bit less than the 7.5% it might otherwise appear.

I have no idea how accurate these assumptions or conclusions are, but I think it is helpful in keeping this all in perspective.  Some of the posts have suggested a Cthulhoid evil is lurking in the GenCon auction.  My question is:  Is a fully disclosed "conflict", which results in a benefit of, say 3% to 5% (or less), really "reprehensible" or "corrupt"?

Smoke and mirrors are metaphorical, and cover the assurances that there was no financial incentives in place, and at one poit that there was no relationship between The Partnership and T&T. Whether people posting were not avoiding telling the whole truth, or did not know the whole truth, or did not understand what others were actually getting at, the questions being put by many were being avoided, misread, or replied to with inaccuracies, for what appear to be political reasons. It is these maneuverings that I refer to when I used the metaphor.

mbassoc2003 wrote:Smoke and mirrors are metaphorical, and cover the assurances that there was no financial incentives in place, and at one poit that there was no relationship between The Partnership and T&T. Whether people posting were not avoiding telling the whole truth, or did not know the whole truth, or did not understand what others were actually getting at, the questions being put by many were being avoided, misread, or replied to with inaccuracies, for what appear to be political reasons. It is these maneuverings that I refer to when I used the metaphor.

Ian, I (and many others) knew the entire relationship via T&T and the partnership as early as Gencon 2007. That you didn't know doesn't speak to any vast conspiracy, it's just obvious that YOU didn't know. It had never been discussed here before under such a microscope and in such minute detail, so there were probably quite a few in the same position as you.  That so much interest is being paid to it is puzzling, as it seems to be driven by those who have never been to Gencon, nor bid in the auction. Next topic for me: Protesting the criminal lack of restroom space at the Lucca games convention in Italy (which I've never been to).

Whether or not T&T or the Partnership is taking nothing, or 90%, of the amount from the auction is entirely immaterial. If you don't like it, don't bid. I don't have relationships with entities I don't trust and that have been proven to have problems in the past (I.e. Cougar for example), so anyone with any problems in this regard probably shouldn't have anything to do with the auction (or any auction in the US) and I'll hope that many more follow your example and I'll get some great RPG items for low prices.  

This has got to be the most absolute waste of Acaeum brainpower since the last waste of Acaeum brainpower.....I'm afraid to leave for a month or so, I'll come back and this will be Dragonsfoot (complete with OT: My new Refrigerator Wall Magnets! as topics)

Mike B.