Many auctioneers have without reserve auctions, and many auctioneers have with reserve auctions. Both essentially claim both are the best for the seller. We happen to see far more evidence without reserve (absolute) auctions draw more bidder attention.
Yet, does eBay tell us anything? We noted the essence of a comment presented as absolutely, positively true from an auctioneer, who has previously noted absolute auctions should never take place:
One only has to look at eBay. Many disclose an item has a reserve (without disclosing the reserve amount) and may not even receive a bid. Even those lots that do receive a bid, there may only be one or two bids …
What would this indicate? It seems without reserve (absolute) auctions and/or academic published reserves would produce better results for the seller than secret reserves? How else would one interpret this comment?
eBay might not be considered an auction in the strictest sense. Nonetheless, auctions in 49 of our 50 states are “with reserve” by default (thus disclosing they are) and only become without reserve with explicit language [whatever that is deemed to be] (thus disclosing they aren’t.)
This auctioneer also invited me to provide any counter-evidence that he was mistaken. I can’t, as I agree wholeheartedly. Secret reserves deter bidders, bidding, high prices, enthusiasm, excitement … and as such sometimes “may not even receive a bid.”
We wrote about “secrets” in the auction business which is the opposite of “more disclosure” two Nobel Prize winners noted auctions benefit from. This seems eerily similar to what this auctioneer held as true, besides otherwise claiming the opposite.
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 formerly at 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 Auction 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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