I don't get the wine auction market

So I’m perusing Wine Bid looking at some classified Bdx. Names don’t really matter, other than that it’s stuff that’s pretty widely available, and has a reasonably liquid secondary market (but not 1st growths or something that would show up at Christies). As I’m spot checking the prices with Wine-Searcher, it’s pretty clear people are pricing these so that they’ll be the lowest price in the US, or very close it. They have to do this A) because you’re taking a bit of a flier on a ‘used’ bottle B) people want to think they’re getting a deal a la Kelly Blue Book and C) Buyer’s premium means it’s not actually that cheap. That’s all fine by me. However I then go to CT, and I see that not only is the offered price (regardless of ‘realized price’) above the Community Average (side note I’ve never understood this value - it is, nearly without exception, much cheaper than I can find anything and if I can match this price I feel I’m getting a screaming deal) AND it’s above the “Wine Market Journal” price - by a decent margin! Where are all those auctions going on? Is Wine-Bid just for suckers like me? Are there extra costs in those Wine Market Journal prices that make them not representative? What gives?

  1. the CT community price is based on what people report. If you are buying older wine then yes it would make sense prices are lower. Another reason prices could be lower is prices in EUR are often lower for French wines
  2. the WMJ price is an average - it’s not the last price. It does include the buyers premium so it should be representative of the all in (ex taxes) price

Looking at the WMJ price a bit more closely:

The data is based on the trailing 12-month average of auction lots. The data goes back to 1997, and the most recently available 12 months is used for the valuation. The price is updated quarterly.

So, if you take 2009 Lafite you will see a lot of volatility around the WMJ price (from 697 a bottle about a year ago to 992 a bottle a month ago).

Which auctions does WMJ cover? Are mere mortals allowed in all of them? I ask because sometimes I see bottles I paid a fair amount for (at retail or for back-vintage) go for much less in the auction market, but it doesn’t say which auction or when. I would love to get in on some of them though.

All the standard ones:
Acker
Zachys
HDH
Christies
Sothebys
Heritage
K&L
Spectrum
Leland Little
Bonhams

Solely with respect to this point, the only time I can touch this value is when I buy direct from the mailing list, AND the mailing list prices are lower than what it can otherwise be had for at retail

I don’t think WMJ covers WineBid, which may explain part of the discrepancy.

I’ve purchased dozens of cases of back-vintage Bordeaux from WineBid over the last several years. However, I’ve noticed over the last few months the pricing of second to fifth growth Bordeaux (and wines of similar pedigree on the right bank) often exceeds retail. The bottles still sell through, so good for WineBid and the sellers, but I’m not a buyer at those prices.

I don’t have any evidence, but I’m chalking up the price action to COVID-19 boredom.

Yes, I am just making the point that the mailing list price of 1991 Harlan in 1995 was $65. People have bought it over the years at auction or second hand and reported a Community Average price of $526. If you look at WMJ they have auction pricing on the 91 only back to 2014 with an average annual price as low as $663 and as high as $782 (on CT they show the auction price as $702).

I don’t put much stock into these prices for older wines - newer wines are more interesting. If you take the 2017 DRC La Tache being discussed on the DRC thread you can see people entering their prices as they get allocation and you will notice the community price is lower than what people are writing (about $2039 now vs 3400+ quoted elsewhere) - that is likely because of the list and Europe vs USA pricing. I bet if you look in a year you will see the Community Price closer to the 2016 (at about $2340) and the auction price also inline with that once these bottle become available (about $4000)

It doesn’t - WMJ has a note at the bottom stating they “exclude internet auctions”

The CT price is an average of the price people actually bought the wine for, whenever they bought it. Since wine prices have been steadily rising in recent years it will be lower than current prices, as it reflects prices that existed years ago.

Yes this is what I was trying to show in my example. The only price pruning CT does is throwing out prices +/- 2 st deviations (to get rid of weird fat finger or normalization problems like wrong currency).

I think the WineSesrcher listed price for auction bottles is the starting bid, not the hammer price.
These can be wildly different.
Bottle X can be listed for $100 but it actually hammered for $280…

Yes, WS shows the book price (no buyers premium). The lots update depending on the auction (K and L will have the latest bid) while others are based on a static list and don’t reflect the current bid.

Something to keep in mind that Wine Searcher is not reflective of market value in any way. Just because someone “gives it away” on Wine Searcher does not mean that is the market retail price for something, and conversely, just because someone “asks” $12,000 for a bottle of 1982 Lafite (regardless of condition) does not make it a $12,000 bottle of wine.

Auction listing on W-S are ONLY the opening bid, and do not fluctuate as bids are made.

Wine Market Journal is a trade website, you need a liquor license to access the site, so the CT average of the last 12 months is probably your best barometer (although not perfect). That doesn’t include buyer’s premium though. It shows what you might be able to reasonably expect in return as the seller. Problem is auctions have good days and bad days. Some houses get better prices than others, etc.

You don’t need a liquor license. I have an account and I’m a regular consumer.

It does include buyers premium.

Not only is the WS price for auction wines the minimum starting bid, but it doesn’t even include the buyers premium even though that is guaranteed to be part of the final price! There is no reason not to include the premium as it is readily available from the auction house.

It’s kind of messed up how WS misleads people about auction prices. They are effectively providing free advertising to auction houses as compared to retailers by consistently listing the auction prices as the lowest around, even though they usually wouldn’t be if they were listed realistically. The advertising value of having your prices consistently appear as the lowest listed prices in the country even when they aren’t must be considerable. I wonder if auction houses pay them for maintaining those policies.

Interesting. Is that through CT, or through WMJ direct?

CT includes BP?

Yes directly through WMJ. Accessing the API (which I really want) is pretty expensive and only for people in the trade.

The CT auction price is with BP. The community price is expected to be a “final price” because it could have come from a list, store, auction etc. if someone punches in the hammer price w/o BP then that is the community price you see.

I understand your point but my guess is it’s not as nefarious as it looks - I would bet WS doesn’t have a way of ingesting the buyers premium from the auction houses. Is it easy to do? Probably. But given they’ve prioritized features like turning hiding auctions from search results and they write “fees applied” below the price instead of giving you the all-in price I would assume they haven’t received enough user input to get them to push for this feature.

I do agree it should be there. I emailed them asking them for the feature.

That’s good news they opened it up. Not like it’s much of a secret! People need to be more informed of the TRUE value of their wines if they are sincerely interested in selling.