Guns At Auction

Concentrate On Value Not Price When You Bid!

By S.P. Fjestad

Rare Japanese Nagoya Arsenal Type I folding stock paratrooper carbine with matching dust cover.
While not having much eye appeal, this Japanese military carbine remains very desirable to WWII
long arm collectors. Photo: Rock Island Auctions

So you have a little dough stashed away the old lady doesn’t know about, and might come in handy at an upcoming auction. Over the decades, the first question I ask these potential buyers before the auction starts is: “What are you looking for?” The replies are mostly alike. “Am not exactly sure — depends how the bidding goes on a few items.” But you should think further than that before raising your numbered sign to bid.

Here are two auction items you might be interested in and are within your price range, but you can only afford one. The only consideration now is value — which item(s) represents the greatest value, not which lot may hammer for less. The WWII Japanese Nagoya folding stock paratrooper is an ultra-rare military carbine that, in all likelihood, may not be encountered for sale again for some time — think non-rational bidding. As an advanced collector of WWII Pacific Theatre long arms, this presents a very unique buying opportunity, especially since it’s in 80 percent condition with matching numbers, including the dust cover — very unusual.

Even though these Colt SAAs have consecutive serial numbers, observe how much deeper the
roll-die strike is on number 43018SA compared to 43019SA. Photo: Rock Island Auctions

But …

Your alternative purchase? A pair of consecutively numbered (43018SA and 43019SA), 51/2″ Colt 2nd Generation SAAs in 98 percent condition, but without boxes. Chambered for .44 Spl., this is the rarest caliber on 2nd Generation SAAs, with only 1,129 revolvers manufactured from 1958–1966. Interestingly, the Colt Historian shows these guns to have gone to two different K-Mart stores — one shipped on July 6, 1966 to Nashville, TN and the other to Charlotte, VA on July 7, 1966.

These are up on the auction block first, and you bid the set up to $4,250, but you are the underbidder after it hammers for $4,500. The pre-auction estimate for this set was $3,500–$5,000, and while this represents a fair value, you decided to save your money in case the Japanese carbine goes cheap.

The Game Is Afoot

This carbine has virtually no collector recognition, notoriety, or eye appeal — especially the Hardware Hank-looking door hinge for the folding stock that usually broke, rendering the carbine useless. This lot potentially represents a bonanza for the auction house if only two or three advanced WWII military long arm bidders decide they want it. The auction estimate is $5,000–$7,000, but you’re thinking a $4K hammer might take it home.

The bidding starts at $3,500, quickly shoots past $4,000, and your paddle is the last one upright when it hammers for $5K. It appears only one phone bidder was interested at the end. After a brief period of exhilaration, you’re a little surprised you didn’t stop bidding at $4,500, as was your pre-auction strategy.

When the emailed invoice for $6,000 arrives several days later, you finally realize you paid too much. Along with the $5,000 hammer price, other line items include: $750 auction commission (15 percent), $175 credit card processing fee (31/2 percent) and $75 for shipping and handling. And this doesn’t include the $30 you’ll give your FFL to process the transaction.

Usually selling for a fair value (including at auctions), this consecutively numbered
pair of 2nd Gen. Colt SAAs were manufactured in 1966, are chambered in .44 Spl. cal. and
remain in 98 percent original condition overall.Photo: Rock Island Auctions

Huh? What?

So what happened to all your good pre-auction intentions? It’s simple — you concentrated on price, and lost sight of value. The real question here is what’s the actual value of your rare WWII Japanese carbine? Not as much as you might think. If you really needed to cash it out quickly, what’s its realistic liquidity factor? If you took it to a pawn shop, getting over $500 for it might be very difficult. And the cash a gun shop would give you for it probably wouldn’t be much different, considering the limited demand for such a specialized item. Moral to this auction purchase? This lot is almost impossible to resell and you will probably never get your money back.

Would it have been the same situation if you had purchased the pair of Colt SAAs instead? The answer is definitely not. Even a pawn shop might take them in at $3,000, strictly because of the notoriety and proven long-term investment performance of this make/model(s). With a demand factor this strong, the price you could get may not be that much different than what you paid when the final hammer dropped.

Cost Vs. Value

This is where things need to be clarified in terms of an auction purchase. Most auction houses now list post-auction prices as the hammer price, plus the auction commission, typically anywhere from 15–25 percent. As a result, many customers now think this auction house commission is part of the gun’s value. It isn’t. While it certainly contributes to the overall price paid for an auction item, in no way does it contribute to the item’s value.

In the case of the rifle, only $5,000 of your $6,000 expenditure might qualify as the value. However, your winning bid on this item still represents a price, not a value, since who really knows for sure what the current value is? If you had bought the Colts, the hammer price of $4,500 would have genuinely represented a value.

So when bidding at auctions, try to follow these rules. Don’t concentrate on price, focus on the current value; never lose track of your pre-auction strategy, including your maximum bids — and know what your final auction costs will be ahead of time.

S.P. Fjestad is the author and publisher of the Blue Book of Gun Values with over 1.8 million copies in print worldwide.

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