Using eBay to Help Determine Value
Valuation Perspectives by Erik Kafrissen and the online appraisers at wiw2u.com

When your business is providing valuation information day in and day out, it is important to step back from time to time and look at where this information is coming from.  How do our appraisers arrive at these "magic" figures and just how much emphasis is placed on the eBay marketplace when determining the value of an item?  After all it is "The World's Online Marketplace" so shouldn’t it be relatively accurate in regards to establishing market prices for items?

I contacted some of our appraisers recently to find out their individual perspectives within their areas of expertise. I asked them for their frank opinions regarding the prices on eBay and if they take them into account when coming up with values for their appraisals. 

It certainly sparked a huge volume of replies as varied as imaginable.  It seems just about everyone has an opinion about eBay and I have categorized their comments below.

Price Ranges

Terry Husk from Buttermilk Hill Antiques comments, “eBay prices are all over the map and one must look at the descriptions to see what makes one left handed pink widget worth $200.00 and the next one only $10.00 . It is also instructive to take note of the items that did not attract an opening bid.”

Fine art appraiser Vivien Hessel goes a step further and remarks that she “… does not feel at all confident in using auction prices on eBay as anything more than a quick reference for an appraisal.  The reason is that the same item can go for $25 on Monday and $100 on Wednesday. It is too erratic.”

Stamp dealer and expert philatelist Jean Lafortune states, “Sellers on E-bay range from extremely knowledgeable people who describe their material in an expert manner, to first-time sellers who cannot identify or describe their material adequately. They either price it too high, and it does not sell, or too low and it is snapped up in minutes by sharp-eyed collectors or dealers.”

Randy May of Hightower Collectibles writes "eBay is indeed a good judge of wholesale value; it has to be considered somewhere between wholesale and clearance. There are exceptions, of course, that occasionally sell for a lot more than retail price too."

Pricing Rules

“One sale does not a pricing rule make. You have to look at a range of recent sales and, taking into account condition and other variable factors, arrive at a value.”, states veteran appraiser Judith Katz-Schwartz.

This sentiment is echoed by personal property appraiser Daryl Schafer who notes “As appraisers we are expected to know the correct market for the items we are appraising.  In other words, if the item commonly trades online in any auction format, then a review of recent prices and the level of interest (number of bids) is a legitimate basis for value.  The key is, knowing when eBay is the correct market.”

Art appraiser Lisa Manzi’s comments illustrate a perfect example of this. She remarks that “For certain artists’ work, eBay can be the main currently active and researchable venue, especially for artists that the main auction houses don't handle like Kinkade, Erte or Nierman.”  Lisa goes on to elaborate further by noting that “eBay has, in some ways, brought a bit of reality into some artist's markets, particularly the artist's that may be very heavily hyped in retail venues.  It can certainly be hard to argue that a Kinkade print is worth $2,000 when in fact they are selling on eBay on a regular basis for a fraction of that price!”

Jeff Motsinger from Millius Estate Services affirms that “eBay is a legitimate market and I use results from there whenever appropriate.  The key is, knowing what kind of market eBay represents for different items-wholesale or retail.  Understanding the limitations of buying just from photos and then waiting for the shipment to arrive is important.  Items that are mass produced and identical will achieve a price closer to retail than items that are unique and need close inspection to assure value.”

Location, Location and Location

It was no surprise that many of the appraiser’s comments were in regards to the variations in prices which arise due to the location of the items.  Even eBay recognizes the necessity to provide clear and easy links between their sellers and buyers in their local area.

Long-time antique dealer Cathy Sykes emphatically states that  “Location makes a huge difference on the price of items. Issues of shipping, nostalgia, appreciation, local demand, rural vs. urban and basic business acumen of the parties involved all play into the final value.”
 
Jean Lafortune continues this line of thought while reflecting that “eBay remains a very useful place to sell all kinds of merchandise not easily sold in a person's  immediate area of residence, especially for people who live in small or remote communities away from major urban centers”, to which Judith Katz-Schwartz summarizes “eBay constitutes a worldwide market. Values may vary in different locales, so that has to be considered when determining a value.”

Are eBay Prices Reflective of the Market as a Whole?

So what about all of those prices on sold eBay auction items?  As it turns out the general consensus is that just because you see an item similar to yours listed on eBay, it doesn’t necessarily mean that yours is worth the same amount.

“eBay has done a lot for the antiques and collectibles world” remarks dealer Elizabeth Parodi.  “It has made a lot more items available for sale to the buyer or collector, but has also brought down the market values that people would have been willing to pay, say, three to five years ago.” 

This sentiment is echoed by long-time eBay seller and autograph expert Lon Strickler who makes the observation that “Frequently an item will sell for a lot less than its actual value. Giving this price, as an appraisal to a customer, really isn't accurate or fair. The auction business, virtual or live, is typically unpredictable!”

Native North American expert Michael Higgins goes a step further by commenting “I don't put much stock in the selling prices on eBay for my field.  There are a lot of people out there with ‘more money than common sense’. They think they're getting great items for very little and most of the time it's not real or it’s misdated”.

Textile expert and eBay Powerseller Camille Buda feels that “The level of knowledge regarding antiques on eBay, is abysmal.  Most bidders or sellers don’t know an antique from their elbows! Because eBay prices are so erratic, fairer prices can be established by using antiques trade references and traditional auctions as guidelines. ”

Art consultant and appraiser Martin Barnes Lorber notes that “eBay, by its all-encompassing offerings, is basically the nation's yard sale, but a yard sale that millions take seriously.”

Cathy Sykes feels that “As a general rule eBay prices are way below the average we see in New England.”

On the other side of the same coin Jack Bogert comments that “eBay is often the topic of conversation at train meets and most often we are trying to figure why something sold so high when we all know the true value. Most train dealers don't count on eBay for their prices. We do have a pricing guide which can also be very wrong. The best way to ascertain value is to actually deal with the product on a daily basis.”

Fakes, Forgeries and Frauds

In the world of coins, tokens and paper money, veteran dealer Milton Lynn has seen many frauds and scams.  Although he buys and sells on eBay he does not use it as a price guide for appraising as he feels “The quantity of questionable material is too great and short term exposure is not a reliable market indicator of truly scarce or rare items.”

Even experts aren’t immune from getting scammed as Michael Higgins relates. “Many items in my field selling on eBay are fake, new, incorrectly dated or misrepresented. When you bid, you’d better be sure you know what you're doing, because even someone like me, (and I humbly consider myself a bona-fide specialist in my field) can get taken. I'm still sitting on a plains pipe, that a seller guaranteed, and it turned out to be fake.  Even though I won a court judgment against him, it's hard to collect.”
Lon Strickler comments “Authenticity is a big issue in the autograph market and especially on eBay.”

Leveling the Playing Field

Even with all of its shortcomings eBay still remains the undisputed king of online auctions and like all other fields associated with it, the appraisal discipline has had to adapt to this new medium.
Daryl Schafer shares her true thoughts when she unequivocally states,“ eBay has leveled the playing field for hundreds of categories of items.”
 
Gemologist Frank Benson gives us his perspective from the jewelers market. “In Appraisal School, they teach you the definition of ‘value’.  The value of an item is what an unhurried buyer and a non-distressed seller agree the value is.  eBay personifies this principle and is so pervasive across geographical and social borders that it literally defines the de facto ‘value’ of an item listed there.  The eBay search of completed items provides important insight into the value of jewelry.”

What’s Hot and What’s Not

Ephemera expert Michael Rice uses eBay as one source of information, partly to see what is selling, but more to see how many (if any) of a particular item are listed. He comments that “If several or more items are listed and all sell around the same price (condition etc. being equal), then this does provide one benchmark towards establishing a value.”

Terry Husk almost always checks the going price on eBay for a lot of the items that he is assigned to appraise. “What it does tell us is whether a particular category is stale or flat,” remarks Terry. “However there are categories that we never consider checking on eBay . Furniture is a good example. It never sells well and there is no point in checking that category out.”

The Foreign Aspect

Jean Lafortune adds his perspective and writes that “eBay is not necessarily a magical venue to sell philatelic material.It was founded by Americans, is based on American attitudes and preferences, geared to Americans, British, Australian, English-Canadians and other primarily English-speaking audiences. This means that material from English-speaking countries, including the  British Commonwealth, tends to be more popular. The number of people on eBay who are interested in used stamps from Yemen, specialized philatelic literature from Portugal or a  collection from Bolivia are not that numerous.  The true specialists of those areas will tend to look to specialized dealers and auction houses for this material and hence the price obtained by such items on eBay may not truly reflect the actual value and scarcity of the material.”

Fine Art and Rare Antiques

Martin Barnes Lorber’s comments relating to the high end Asian art field reveal that “eBay is useful for determining the value of ‘collectables’ like commercial export items and items bought on whim rather than knowledge, but not for anything Asian approaching the serious level.” He goes on to assert that “To determine the value of Asian art that most collectors would consider ‘serious’, one needs to keep track of auctions by Sotheby's and Christie's in New York, London and Hong Kong. Yes, there are constantly updated price guides for certain Asian ‘collectables’ such as Nippon porcelain, but just imagine asking a Nippon collector questions about the influence of Korean ceramics on the Japanese Tea Ceremony, the Chinese influence on enameling designs of 17th century Nabeshima porcelains, or to describe the similarities and differences between early Chinese Yue wares and Japanese Sué wares. The eBay market is completely separate from the market for these serious items. They coexist, yes, but with buyers whose interests and level of knowledge rarely meet.”

This sentiment is echoed by fine art appraiser Richard Schlom who adds that “Although eBay is a viable venue to buy and sell property, with few exceptions it is a bottom feeders market.” Richard further adds “It is my experience that in the majority of instances good art sells on eBay for almost half its value. Though I have used eBay to help determine the wholesale value of certain property it is unreliable for better art.”

A Tool in the Toolchest

Just about all of the appraisers were unanimous when it came to the issue of multiple sources. Like a good journalist, a good appraiser always looks at more than one resource when coming up with a value.

Author and antiques expert Pam Wiggins notes “I don't use eBay as a pricing gauge singularly, but it does give a good indication of the market for antiques and collectibles these days.” 

Cathy Sykes is quick to point out that “eBay is an effective and wonderful tool as it is a broad, very complete, compilation of all demographics. However any good appraiser knows a proper appraisal should be based on more then one comparable item - 3 or more is best.”

Terry Husk sums it up when he says “eBay prices are not a Bible and need to be taken in context and with other sources.”

I hope you have enjoyed reading the various perspectives presented by these very talented appraisers. To read more viewpoints from our experts, simply visit our News and Reviews section.

Erik Kafrissen
wiw2u.com