Why does anyone attend (or otherwise place bids) at any auction? We have held for years, the likely reason (or the only reason) is the “prospect of a deal.” We’ve also held that without this “prospect” auctioneers [and their clients] can expect little if any reaction to their subject auctions.
We coined the phrase “prospect of a deal” to describe why people are attracted to auctions. We have held for decades that successful auctions have it, and unsuccessful auctions probably don’t have it: https://mikebrandlyauctioneer.wordpress.com/2009/12/11/auctions-and-an-iowa-corn-field/.
Once an auction attracts a sufficient number of bidders, are there other factors that affect that bidding? Indeed. One such factor is “inflation.” Inflation is the “overall increase in prices” over a given period of time, and if prices are up, the prospect of a deal is certainly heightened.
However, how does inflation affect auction sellers? While one might expect higher prices with more bidders participating, the costs of sale might be higher as well, as advertising, setup, staff, software, fuel, etc. are also up in price. With costs up as well, the higher net-to-seller might be more moderate, and even for some, less than that with tempered inflation.
Inflation affects both sides of the auction equation. Higher prices and higher costs to obtain those higher prices. Bidders (buyers) and sellers likely both pay more where the final outcome is uncertain. When inflation subsides (deflation,) I suspect the increased costs to sell will remain, where then sellers may in fact earn [even] less.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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