We continue here with a 4-part series covering the recently released “Auction Industry 2010” research project conducted by the Broad College of Business at Michigan State University. This study was conducted by Dr. Forrest S. Carter, Associate Professor of Marketing and student researchers Marina Batchelor (lead), Kijun Yang, Sarah Andersen and Zoe Cai.
The study is broken into 3 basic parts, with a preface. I will also comment on some of the statistics presented.
Part III of the study concerned “about auctioneering.” A total of 1,972 respondents contributed to these statistics.
Some statistics:
Skills Required to be AuctioneerUse of technology within your business9%Utilizing internet bidding portals2%Business management / accounting6%Salesmanship12%Networking skills to obtain clients and/or …11%Marketing/promotion of auction event17%Marketing/promotion of auction items13%Bid calling10%Organizational skills17%Other3%
Other Skills RequiredNegotiation skills1.3%Money / Capital0.6%Lotting / Tagging / Prepartions (Preparations?) of consignors3.1%Staffing / Having Good Ringmen1.9%Goal setting / Persistence / Leadership3.8%Finding items or Customers / Marketing7.5%Consistency / Customer Service / Listening3.1%Honesty / Integrity35.6%Entertainment / Being a professional ringman8.1%Presentation (Auctioneer only refers to bid caller)1.3%Experience / Understanding psychology of …6.9%Use of Auction.Zip (AuctionZip.com?) / Right software2.5%Appraisal / Expertise in merchandise17.5%All of those listed6.9%
Management ChallengesAdministrative19%Appraisals8%Technology14%Networking & Business …12%Advertising & Marketing …19%Public Speaking2%Bid calling2%Negotiations10%Staging & Set-up …10%Other4%
Other Management ChallengesAccepting change0.6%Aquiring items, Clients …23.4%Accounting / Cash Flow4.4%Budgeting (especially …)8.2%Industry’s image / Honesty …8.9%All ov the above1.9%Discrimination / Barriers to entry2.5%Competition / Reduced Pricing …8.2%Customer Service / Dealing with …8.2%Government regulation8.9%Economic / Environmental …1.9%Employee relations / Labor …1.9%Growth / Management / Time …3.2%Knowing technology1.9%Legal requirements0.6%Not sure / None of them3.2%
Industry Revenue TrendsGross Annual CommissionsNumber of AuctionsAverage Revenue/AuctionOver $5 Million45$13,333$1 Million to $5 Million36.5$8,219$500,000 to $999,99935.8$2,095$250,000 to $499,99934.1$1,100$100,000 to $249,99933.2$527$75,000 to $99,99930.4$288$50,000 to $74,99924.8$252$25,000 to $49,99921.3$176Less than $25,00011$114
The study concluded that firms with gross commissions over $5 million held 4 times as many auctions in a year than firms with gross commissions less than $25,000; but they generated 117 times more gross commissions.
Further, firms with gross commissions between $1 million and $5 million held 1.7 times as many auctions in a year than firms with gross commissions between $25,000 and $50,000; but they generated 46.6 times more gross commission.
How Auctions Conducted by High/Low Revenue CategoriesAnnual RevenueLive Auctions OnlyLive w/ simulcast biddingOnline-onlyOver $1 Million52%35%13%Under $50,00090%6%4%
More on How Auctions Conducted by High/Low Revenue CategoriesAverage Annual RevenueAverage Number Auctions per yearLive$460,04723.5Live w/online simulcast bidding$1,498,46431.1Online only$1,412,17434.6
Social Media Usage Relating to Revenue & Number of AuctionsAverage Annual RevenueAverage Number Auctions per yearUse Social Media$903,61626.8Does Not Use Social Media$465,16423.3
Type of Auction Specialty by High/Low Income CategoriesAuction SpecialtyGross Commissions $1 Million & OverGross Commissions $50,000 & UnderResidential Real Estate11%9%Commercial Real Estate8.5%2.5%Farm/Land Real Estate8%5.5%Benefit4.25%13%Collectibles & Antiques7.5%15%Art2.25%1.9%Automobiles6%4%Livestock1%1.9%Estates and Personal …8.25%17.5%Farm Machinery and …6.25%7.9%Commercial7%3%Business Liquidations8%7%Auction House/Gallery3%4.1%Other0.25%1.25%
The study concluded that with the exception of automobiles, high gross commission business had more commercially based clients (commercial real estate, farm/land real estate, art, commercial machinery and equipment, and business liquidations.)
The study came to the following two conclusions:
When auctioneers were asked what areas they required assistance they responded marketing / advertising and technology 43% of the time.
The industry is aging both in terms of the professional, and in terms of potential customers.
Areas Requiring AssistanceBusiness Proposals10%Licensing4%Contracts8%Clerking / Billing4%Accounting / Record Keeping13%Marketing / Advertising20%Insurance / Bonding6%Technology23%Human Resources9%Other3%
Other Areas Requiring AssistanceGetting more …2.2%Laws / Legal23.7%Bonding / Insurance2.2%Image / Integrity14%Cost / Business …11.8%Customer Srvice (Service?) / …25.8%Staffing5.4%Not Sure / Think …2.2%None of those listed8.6%All of the above4.3%
New Entries in the Auction BusinessAge GroupExposure to Family BusinessReferral from Someone in BusinessCareer Counseling / Career ProgramExperience Attending Auctions18-2463%6%0%31%25-3551%11%0%39%36-5033%10%2%55%51-6524%14%161%Over 6518%13%1%68%
340 Michigan State students were randomly selected and surveyed on their attitudes and experiences towards live auctions and eBay. Results showed students:
moderate users of eBay
having very favorable attitudes towards the site
with limited experience with live auctions
but open to the live auction experience
Frequency of Using Ebay for PurchasingLess than once per month83.8%1-5 times7.1%6-10 times5.9%11-15 times2.2%16-30 times0.6%More than 30 times0.6%
Frequency of Using Ebay for SellingLess than once per month90.9%1-5 times4.4%6-10 times2.6%11-15 times1.2%16-30 times0.6%More than 30 times0.3%
Attitude Towards EbayVery favorable15%Favorable48.5%Neutral30.3%Unfavorable3.5%Very unfavorable2.6%
Have Attended a Live AuctionYes33.3%No66.7%
Types of Auctions AttendedCharity Event53.9%Real Estate9.8%Surplus Items31.4%Art / Antiques21.6%Automobile30.4%Memorabilia / Collector’s Items14.7%
Consider Attending an AuctionYes73.6%No26.4%
Expectations When Attending AuctionsIt would be interesting71.4%It would be generally boring10.4%It would be a waste of time and energy7.4%It would be fun48.9%It would provide some real bargains and unique items50.6%Would expect neither positive or negative feelings10%
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.
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