You're Wrong About Marshall, Carter and Dark!

Link to article: You're Wrong About Marshall, Carter and Dark!.
(none)
(none)
(none)
[[include :scp-wiki:theme:black-highlighter-theme]]
[[include :scp-wiki:theme:black-market]]

[[>]]
[[module Rate]]
[[/>]]

Sorry for the clickbait title -- an anonymous essay needs to get people’s attention from that alone.

What I really mean by the title is that nobody on the wiki is writing an auction house even marginally similar to what they actually function like in real life. This is an incredibly widespread issue; the MC&D GoI format contains elements that seem to outright conflict with the idea of being an auction house. It is to the point where it might be better to just stop calling it an auction house than fix it up to be one.

The real-world auction industry is pretty small, so I don’t want to identify as working in it publicly (hence this essay being published anonymously), but it is one that I have been working in for a few years. I’m not an expert in this field, but I have at least a baseline understanding of the business flow and how a high-end auction house (such as Christie’s or Sotheby’s) would function, which nobody on the site seems to have. Christie’s and Sotheby’s are going to be the two best reference points for how Marshall, Carter, and Dark would actually function, as they are the largest two auction houses and the fanciest.

To be clear: this essay is not saying that you have to change how you write Marshall, Carter and Dark. Many users on the site tend to write MC&D as an exclusive gentleman’s club with a boutique rare objects store attached -- and that’s perfectly fine! It is probably a more realistic interpretation of how Marshall, Carter and Dark would function, rather than an auction house. An auction house’s business model is reliant on having a large number of potential buyers -- something that might not line up with your idea of the Masquerade or publicity. If you read this article and think “Interesting, but the way I was writing it works better for my story / headcanon.”, you should feel free to do so. Just maybe think twice about //calling// it an auction house if you choose to break from these ideas!

+ The Consignment Model

The basics: **An auction house does not buy property. An auction house does not own property. An auction house does not have inventory.**

This is the biggest thing that people get wrong when writing MC&D, and this is the fatal flaw that kills it and makes it different from how auction houses actually work. Auction houses are, for the most part, a neutral third party that operates to connect anonymous sellers with anonymous buyers. Although they take into possession the material that they will be selling, they do not take ownership of it. Further, they typically only sell goods that have already been offered on the market (although exceptions occur).

After a //specialist// -- a senior representative of the auction house who appraises items and convinces owners to consign -- and an consignor agree to sell something, the auction house will enter into a contract with the consignor and agree to a //reserve// and estimates. The reserve is the minimum price the seller is willing to sell for and is not typically made public. This is //the lot//, which can be more than one physical item, but is purchased as a whole. Sometimes a lot will have no reserve price and can sell for any amount; the fact that a lot is //no reserve// is typically disclosed. A reserve is never higher than the low estimate. The estimates will be a range that the auction house expects something to sell for and are public. However, many factors are considered for these, and they can sometimes be misleading; estimates can be aggressively low to drive interest in the lots.

This is one of the big problems with the GoI Format. It asks for a “Value” (although it does nominally allow for a range) and makes no mention of the reserve. “Value” is not a term that an auction house will use, except in rare cases where they have to give a fair market value[[footnote]]In the real world, this is primarily for insurance reasons (so not actually a rare case, but not a part of the business flow all the same). The other time is when the proceeds are being donated to charity, in which case any amount of the hammer price in excess of the fair market value can count as a charitable donation. Neither of these are //super// applicable to MC&D.[[/footnote]], and those are an uncommon exception. The MC&D format would look better like this:

||~ Reserve|| XXXX USD/GBP/HKD||
||~ Low Estimate|| XXXX USD/GBP/HKD||
||~ High Estimate|| XXXX USD/GBP/HKD||

Also decided between the specialist and consignor is the //Vendor’s Commission//. This is the percentage of the winning bid price (called the //hammer price//) that the auction house will take from the proceeds. This is normally between 0% and 10%, and generally decided by the desirability of the lots being consigned. In the real world, this is often used to attract buyers to consign with a certain auction house. Christie’s might know that Sotheby’s is offering a 7% Vendor’s Commission to a client, so they’d undercut them by offering a 4% VC. Marshall, Carter and Dark, not having competition, might be more cutthroat about this, and charge a flat percentage for all clients, rather than negotiating with each. (Heritage Auctions does this, and Sotheby’s tried it briefly).

The other major source of profit for an auction house comes in the //Buyer’s Premium//, which is an additional charge on top of the hammer price. This is consistent for all buyers and is typically 26% to 28% of the hammer price, although it will be closer to 14% to 15% for the most expensive lots. The houses that charge a flat Vendor’s Commission tend to also have a flat Buyer’s Premium of 20%. These are rates that have been increasing, so if you write a historical MC&D article they might be different. For a simplified look at how this looks in practice:

> Alice bids on Lots 1 and 2 and gets the highest bid on both.
> 
> For Lot 1, which had a reserve of $100 and estimates of $120 to $200, Alice places a bid of $90. As this is below the reserve, Lot 1 does not sell. The consignor is returned the lot after the auction.
> 
> For Lot 2, which has a reserve of $70 and estimates of $80 to $120, Alice places a bid of $100. This is above the reserve, so Alice wins the lot. Assuming that MC&D has a Buyer's Premium of 25% and is charging a 10% Vendor's Commission to the consignor, Alice will need to pay MC&D $125 for her item. Of that money, MC&D will give the consignor $90 and keep $35 for themselves.

Returning to the consignment itself, the item itself will normally be given into the care of the auction house, who will keep it in their inventory on a temporary basis until the auction. This is not normally in line with how inventory is portrayed in MC&D articles. The format contains the following line for "Availability":

||~ Availability||None/Unique/Current Inventory (Numerical Value), Estimated (Numerical Value) Worldwide/Established Supply Chain||

In the auction industry, this would exclusively be None/Unique. None of the other entries here are particularly in line with how an auction house would function; they do not do supply chains and they don’t keep multiple of an item in stock. An auction house is interested in unique things that multiple people might want. This is not a minor detail, mind you: this is hugely critical to the business model. **An auction house does not sell things you can buy elsewhere, or things that exist in multiples: they sell singular, rare items.** This isn’t ironclad, but the assumption should be that MC&D is selling Unique items, and anything else is an unusual exception.

+ How Many Auctions Per Year

Most real world auction houses have specialist departments[[footnote]]They also have support departments. These are things like finance, HR and IT teams. Outside of the executive board, and the warehouse/inventory departments, these probably won’t be too interesting for the SCP Wiki, but can reasonably assumed to operate like other companies might.[[/footnote]] -- such as Fine Arts, Wine, or Watches -- which organize separate auctions from each other on an annual basis. Normally, a department will have somewhere in the order of two to four auctions per year, with lot counts tending to fall in the 100-200 range. This is an area, however, where I don’t think MC&D would operate like its real-world counterparts. The anomalous is a fairly defined and specific category already, and they would likely have one singular, rather large specialist department which focuses on any kind of anomaly. Further, the anomalous is much harder to come by than artwork, so they likely have smaller auctions -- the 50 to 100 range is more reasonable. The absolute low end that I would envision here is an average of 25 items per auction -- any less than that and they wouldn’t have enough volume to run an auction -- certain overhead costs must be met to cover advertising fees and other expenses. It would not be unreasonable to imagine MC&D not having a permanent auction room in any city and instead renting out different venues for each auction: another significant expense.

You might disagree! You might see MC&D as having a department for Art, a department for Food & Drink, a department for Weapons, or more! However, I have trouble seeing MC&D selling hundreds of different kinds of anomalous artwork per year, every year. A hundred anomalies of any stripe feels more appropriate, and I see them as most likely having one specialist department, and two auctions, each likely around 75 items, per year, per location. That can easily be adjusted up or down, depending on how large of a company you think they are, how prominent the anomalous is for you, and if your canon has a Masquerade.[[footnote]]All of the above applies to a Masqueraded canon. In a Broken Veil canon, I could easily see MC&D having multiple specialist departments in each location.[[/footnote]]

If MC&D has multiple departments, each specialist department will have international counterparts at the other major branches. They assist each other where possible and when needed but generally operate independently of each other. Generally speaking, however, the New York Anomalous Food Department will run largely independent of the London Anomalous Food Department.

This is, oddly enough, the most rigid element of Marshall, Carter and Dark. The logo, which is in the theme, specifies three locations: New York, London and Hong Kong. In my opinion, it is unlikely that MC&D would have the volume of consignments to support anything more than these three locations. You could reasonably say that they have smaller branch offices in other cities which have smaller or less frequent auctions, but it is more probable the satellites would send their items to the big three cities rather than hold an auction themselves. These satellite offices, if acting as support for the main offices, will be very small -- think teams of less than five.

Putting this together, my view is that Marshall, Carter and Dark would have six auctions per year, total, auctioning off an average of 450 anomalies per year. You can change this as you choose, but be mindful of the math here, and what it implies. Adding a new MC&D location indicates either another pair of auctions per year, or that the office is small and only has a few people working in it. Saying they have multiple specialist departments and themed auctions rapidly increases their auction count, and implies they are able to take in enough anomalies per year to support a department.

As an aside on this part, the mere existence of MC&D implies a staggering amount of turnover. Even the absolute smallest version of MC&D -- three international branches, one auction per year, average 25 anomalies per auction -- is auctioning off 75 anomalies per year, every year. That’s at the lowest extreme, and it’s still a pretty significant amount of volume! The figures I think are more reasonable are 450 per year, every year, which is still a lot. Many versions and interpretations of MC&D imply even more volume than that!

Considering how many objects they must be selling, it’s worth noting that most of what MC&D is auctioning off wouldn’t be considered an SCP item but would more likely fall under the anomalous items list. A group of levitating stones wouldn’t be an SCP but could make for an expensive art installation that a wealthy buyer would want. A Daevite cultural artifact might not be anomalous, but can’t be sold on the open market, so the only place to sell it would be with MC&D.[[footnote]]It would not be unreasonable to imagine the Foundation as a frequent bidder at auctions.[[/footnote]]

+ Auctions and How They Function

This is a little more basic, but it’s good to get this down.

As I said before, the primary function of an auction house is to connect anonymous sellers with anonymous buyers. Unless the seller has agreed to disclose their identity[[footnote]]This will normally only happen if the provenance of the item being sold is important and will add value. This is most frequent when the seller is famous.[[/footnote]], all of the items are brought to auction without information on who owns them, or without disclosing who is involved in the auction. In most auctions, buyers can buy from multiple sellers at the same time, and vice versa. In essence, an auction is a vehicle to connect a seller to the most interested buyer in the market.

This means that most auctions are not single consignor and instead contain a collection of items owned by a number of individuals. It is not impossible for an auction to be single consignor, but these are rarer and tend to be bespoke auctions outside of the normal auction season. MC&D might rely on these more frequently -- there are likely only so many buyers for the anomalous, and when one dies their entire collection might be put up for auction by the estate.

Auctioneers do not speak as quickly as you are expecting. This is a more typical auctioneering style for someone whose auction consists of hundreds to thousands of lots and is typically used by cattle auctioneers. It’s not a style associated with the luxury, high-end auction that Sotheby’s or Christie’s (and thus Marshall, Carter and Dark) would be going for. This is even more true if your headcanon for MC&D has them having small and selective auctions -- they can afford to let items breathe and wait for bids. For a high-end auction, they’ll normally spend about 1-3 minutes per lot; longer if a bidding war happens over a given lot.

All auctioneers stick to bid increments. You aren’t typically able to place a bid for a marginal amount more than the previous bid. Bid increments typically increase by 10% and are standard for a range. At a bid of $100, the increment is usually $10, so the next bid the auctioneer would accept would be $110, and the next bid after that is $120, until the bid reaches $200, at which point the auctioneer would ask for $220. (This is a simplified explanation -- it’s different at different houses and more complicated than this.) It isn’t unheard of for an auctioneer to accept a split increment (e.g. taking a bid of $105) but this is rarer.

There are a few ways to bid during an auction. These days, there’s typically support for in-person bidding, phone bidding, and online bidding -- these all work basically the same way. For phone bidding, a staff member of the auction house will call a registered client shortly before the auctioneer gets to a lot and bid on the lot at their direction as though they were in the room. Bidders can also place an absentee bid, in which case they will specify the maximum they are willing to bid, and then the bid will be executed at the lowest price needed to get the item. The auctioneer will have this in front of them, and anyone bidding in the room, on the phone or online will need to bid against it.

The auctioneer will open up with a starting bid, typically at some price point under both the reserve and low estimate. If there is a single absentee bid, the auctioneer will begin at the reserve and call for bids. If there are multiple absentee bids, the auctioneer will begin one increment above the lowest absentee bid higher than the reserve. As an example: 

> Imagine an item with an estimate of $100 to $200 and a reserve of $80. There are three absentee bids on the item, Alice with $70, Bob with $90, and Charlie with $120. Since the lowest absentee bid is under the reserve, it gets ignored, and the first bid will be a bid from Charlie at $100 -- the lowest amount he would need to beat Bob’s bid. David, in the room, could place a bid of $110, to which the auctioneer would respond by noting that Charlie’s bid is now $120. If David was to bid again at $130, the auctioneer would note he had beaten the absentee bid and accept David’s bid of $130, and the auction would proceed with just the in room, phone or online bidders.
> 
> (It’s entirely possible for Charlie to have an advance bid of, say, $240 and for this to go on for a while, as each bid that David places would immediately be overridden by a new bid from Charlie, until the bid of $240 is met.)

+ In the End

This is meant to just be an informative essay about the basics of an auction house, rather than urgent cry to write Marshall, Carter and Dark differently. A Marshall, Carter and Dark written closer to what this essay outlines would work more similarly to its real world counterparts, but it also has a number of other downsides that might make it harder to work into a story, or stretch realism in different ways -- for a lot of authors and canons, you might be trading the realism of MC&D’s business logistics for a sudden lack of realism in the scale and number of anomalies they sell per year. Maybe neither of these is a concern to you, and you’ll keep writing MC&D in the same way you have before -- that’s totally fine, just maybe don’t call it an “auction house”.

[[footnoteblock]]

[[include :scp-wiki:component:license-box | author = Anonymous]]
[!-- N/A (No Images)  --]
[[include :scp-wiki:component:license-box-end]]
You're Wrong About Marshall, Carter and Dark!

Module Styles

Inline Styles

Includes

CSS Classes

Page Source
