In reading a recent magazine article, good advice for an auctioneer is to, “mind your bidders” and thus sell client’s property by online auction instead of by live auction.
The article further noted four major points about online-only auctions, noted below:• A “soft” close provides last-second bidders with no strategic advantage• Starting bids don’t seem to make much of a difference in the eyes of buyers• Online auctions bring more revenue, help Auctioneers save on marketing• There are ways to connect Internet bidders with the live-auction experience
As many as 78% of all auctioneers in the United States sell at live auction without any way for bidders to bid via the Internet during the auction, and an additional 15% sell live with some sort of simulcast bidding capacity, per the Auction Industry 2010 (Part II) conducted by Michigan State University. So, apparently the 7% who don’t sell at live auction (6% online-only and 1% other) are serving their clients better?
We discussed the topic of Do online-only auctions realize more money for the seller? and concluded that there was little evidence that the online-only platform truly benefits the auctioneer’s client; more likely the online-only auction benefits the auctioneer with less overall labor and the opportunity to charge additional fees, and thus earn additional profit.
This recent article made references to live auctions, but only in how an online-only auction could replicate that experience. One of my college roommates who now lives in Zanesville, Ohio has an extravagant theater room with state-of-the-art audio and video. Yet, he drives to Columbus, Ohio for all The Ohio State University home football games — to watch them live. Maybe even the best of a simulated football game isn’t quite the same as the actual game?
As well, this aforementioned article cites only a handful of auctioneers including one from Eagle, Idaho, one from Alliance, Alabama, one from Schroon Lake, New York and one from Chehalis, Washington. As we published prior to this, “Within 500 miles of Charleston, West Virginia, there are about 67% of all the auctions,” and none of these auctioneers are in the “heart” of that area of the country.
In other words, would it be better to suggest that where are far fewer auctions (in Eagle, Idaho, for example,) the public is far less familiar with auctions, and allowing bidders to bid online — bidders from other geographic locations — may be much more prudent, contrasted with areas such as Illinois, Indiana, Kentucky, Ohio, Michigan, Tennessee, West Virginia, Pennsylvania … where live auctions are a material part of life?
While it would be impractical to interview 100’s of online-only auctioneers, it might be just as impossible as impractical since there aren’t probably even 100 auctioneers in the United States doing any significant amount of online-only auctions. Too, it is fairly well documented that there are a material number of online-only auctions which have been terribly unsuccessful — to the detriment of both the auctioneer and the auctioneer’s client.
Let’s take the article’s major points one at a time:
• A “soft” close provides last-second bidders with no strategic advantageTrue, and as true at a live auction.
• Starting bids don’t seem to make much of a difference in the eyes of buyersTrue, and the same at a live auction.
• Online auctions bring more revenue, help Auctioneers save on marketingUnclear. More revenue for the auctioneer or the client? Is the auctioneer’s gain at the expense of the client? And, do online auctions require more marketing than a live auction? The assumption that a live auction requires more marketing may be unfounded.
• There are ways to connect Internet bidders with the live-auction experienceNot really. The live auction experience is multifaceted and complex — much more complex than seeing the auctioneer, staff or the property on a computer screen, or hearing the auctioneer via a computer speaker.
Lastly, a particular quote in the article caught my attention: “It’s harder to get those people to come to the auction where 50 years ago it was a big community event,” he says, “Everyone went because there was nothing else to do.”
I would agree with that maybe there was less to do 50 years ago, but live auctions in most of the United States still attract large crowds, and active bidding. Further, I’m not convinced people went to auctions 50 years ago because they had nothing else to do, any more than I believe people today go to (or participate in) an auction because they have nothing else to do.
People go to auctions to preview, inspect, compare and possibly purchase real or personal property. The also go to auctions to see friends and acquaintances and gauge their interest in those items as well as see what others are interested in purchasing. Many people attend auctions just to watch property sell.
Mind your bidders? Good idea; but to equate this important concept with the premise that all auctioneers should sell at auction online-only versus a live auction is unsubstantiated.
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 serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.
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