We start 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 which we discuss here. I will also comment on some of the statistics presented.
The first topic discussed in the study was auction revenues versus GDP (Gross Domestic Product) in the United States. The figures are below with all values in Billions of Dollars:Gross Domestic ProductLive Auction RevenuesOnline Auction Revenues2004$ 11,867.8$ 217.2$ 4.42005$ 12,638.4$ 240.2$ 6.12006$ 13,398.9$ 257.2$ 7.92007$ 14,077.6$ 270.2$ 9.22008$ 14,441.4$ 268.5$ 10.2
Also calculated was industry growth rates, comparing live auctions to online auctions:Online Auction Growth RateLive Auction Growth Rate200539%11%200630%7%200716%5%200811%(1%)
As we study these numbers, it appears to us that this is a very short time frame to be concluding any certain future trends.
Secondly, the study seems to point to a “concern” of negative live auction growth; however, online growth has dropped from 39% to 11% while live auction growth has dropped from 11% to (1%) — and thus, online growth has dropped more significantly in this time frame, not live auction growth.
We see this:
Online auction growth from 2005 to 2008 has dropped 28%
Live auction growth from 2005 to 2008 has dropped 12%
Lastly, this study compares GDP to auction revenue. It is not clear to us that these numbers relate in any certain fashion. Gross domestic product refers generally to the gross production of new product, while auctions more-so refer to the sale of used property. And, auction revenue, despite previous studies, is largely an unknown quantity.
In fact, one might be able to conclude that if more new product is being produced and sold, that less used property would be in demand?
We will continue with three more articles, Parts I, II and III of the overall study, namely: about the auctioneer, about the auction business and about auctioneering.
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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