Market Intelligence
Walking the high wire? Watch out!
This article is a report on the failure of the online auction "Open Roads - North America" organized by RM Auctions between 23rd and 30th July. The article notes the low number of cars and the reduced average price per car, suggesting that RM might have become overconfident and careless due to their past success. The auction resulted in a poor performance, with only 50.56% of the lots sold and takings of just $2,840,700. However, the author notes that there were some good deals to be had, including a 1985 Ferrari Testarossa that sold for a bargain price of $84,000.
My job is to try to objectively report the market for the benefit of enthusiasts and collectors. Sometimes I use a light-hearted tone or digress onto subjects that for some may appear slightly off-topic. As a matter of fact, I love this world and this job and often talk about it, on a scientific basis, in a loose and informal way to avoid sounding boring and monotonous (at least, that is my intention). All this to say that there are occasions when objective reporting might come across as severe. But those who follow us would be much more severe on us if we chose to do otherwise. And that’s exactly what I’m required to do with the RM Auction “Open Roads – North America”, an online event organized between 23rd and the 30th July, which didn’t go well. Accordingly, just like in any field of work, it’s important to learn from our failures so that we don’t repeat them.
Given that RM has always handled its online auctions exceptionally well, transforming them into a recognised success, one has to wonder whether this euphoria tricked them into believing that everything was easy. A quick glance at the catalogue was all it took to raise some doubts:
First of all, the number of cars, 89. Why is the number of cars important? Well, as virtual events give you infinite space (and fixed costs close to zero), it’s tempting to “throw in” almost any car that comes your way, as the financial risks are so low. And this in itself is dangerous. Then the average price: $77,100 per car, a decidedly reduced figure, which comes to blows with the number of lots on offer: usually, either you bet on a large number of cars on sale or on fewer cars of higher quality. Offering 89 cars at $77,100 each meant aiming for $6,862,000 (I know that 89 times $77,100 is a little less but the total value on offer was $6,862,000). Too little to believe that RM was truly committed.
