The Ebb and Flow of Whisky Auctions: A Look at Reserve Pricing Through the Years

The attached graph and accompanying data from Whisky Hunter offer a vivid picture of the trends in whisky auctions from 2017 to 2023. It's a tale of increasing offerings and shifting outcomes, with a particular focus on the lots that remained unsold, presumably not meeting their reserve price.

The Surge of Supply and its Consequences

As we delve into the numbers, we notice a steady rise in the total lots from 193,188 in 2017 to a peak of 655,097 in 2023. While the sold lots also increased, the percentage of unsold lots grew from 3.36% to 12.2% in this period. This upward trend in unsold lots suggests that while there's no shortage of whisky being put up for auction, a growing portion is not meeting the reserve price set by sellers.

Understanding Reserve Prices

Reserve prices act as a safety net for sellers, ensuring that their valuable whisky is not sold for less than what they deem it's worth. However, the increase in unsold lots indicates that sellers and the market might not always agree on that worth. When a similar lot without a reserve is available, it often becomes the more attractive option for buyers, leaving the reserved lots waiting for the hammer that never falls.

The Buyer's Strategy

For buyers, reserve prices can be a hurdle or a sign of value. A high reserve might indicate a seller's confidence in the rarity or desirability of their bottle. Yet, if the market doesn't share this confidence, the bottle remains unsold. Buyers may prefer to target no-reserve lots, where the final bid, no matter how low, wins the prize.

The Seller's Dilemma

Sellers are faced with a conundrum: set a high reserve and risk the lot going unsold, or set no reserve and risk undervaluing a potentially rare find. The data suggests that sellers may need to recalibrate their expectations to align more closely with market valuations.

Conclusion

The graph paints a clear picture: the whisky auction market is growing, but so is the gap between seller expectations and buyer willingness. This poses critical questions for sellers about the right reserve pricing strategy and for buyers about the true value of a lot.

We invite you to share your thoughts on this trend. Have you passed on a lot due to a high reserve price? As a seller, how do you determine the right reserve for your bottles?

Let's open up the discussion on our Facebook page.