This auction company is merging with this other auction company “to serve our clients better” and that’s typically the given reason. We can service you, our clients, better because we’re bigger.
Size does matter from an efficiency standpoint — maybe one marketing department instead of two, one human resources department rather than two, and the like.
However, bigger isn’t necessarily better in all regards, in that smaller companies are often more agile — flexible — and can customize a solution for a client more quickly than a larger company.
The number of corporate mergers has been going up lately and the auction business is no different. It seems possible as one company merges with others, other auction companies feel they must merge to stay relevant.
Auctioneers might note that the online auction platform business has embraced this trend with less than optimum results. Complaints include lack of response, less customer service, indifference, and in some cases, higher prices.
It also appears to us that there are numerous auction company principals who are currently taking specific steps preparing to merge with (or possibly acquire) other auction companies. This will be an interesting trend to watch in the coming months and years.
Mergers of like-minded companies with auction experience probably net a good result. On the contrary, when venture capital (private equity) companies take over, often times the consumer experience obviously suffers.
This current trend makes me wonder if the majority of the entire auction industry is housed within 4-5-6 or so companies total sometime in the future. This could result in few choices for the public (sellers) and higher prices for everyone.
Do you disagree? How much of the online auction platform business is housed within 4-5-6 companies? Certainly, individual companies can have their own online platforms, but how many can build a marketplace comparable to existing companies? Few — if any — it would appear.
We have advocated for individual auctioneers to establish their own platforms and marketplaces, but wonder if it’s too late. https://mikebrandlyauctioneer.wordpress.com/2021/02/27/auctioneers-is-it-too-late-does-it-matter/.
Individual auctioneers can make a good living in the auction business by capitalizing on a local/regional area with good name recognition. Otherwise, it may be increasingly difficult for “small town” independent auctioneers to stay in business other than working for one of the larger entities.
Of course, these large prominent auction companies need staff for setup, sales, procurement, marketing, clerking, cashiering, registration, day-of-auction ringwork, online auction management, and bid calling.
Is it reasonable to assume many already in and now entering the auction business today have greater opportunities working for others than creating and maintaining their own auction business?
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, Brandly Real Estate & Auction, 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 has served as 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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