I attended an interesting auction where an item was put up for bids (offers) and then if the price was deemed sufficient, suddenly more of that same item appeared for sale. Likewise (in a way) other items were put up for bid, and when the bid was deemed insufficient, there were no more available.
We wrote prior that some auctioneers might sell only a limited amount of something, holding further undisclosed inventory for later: https://mikebrandlyauctioneer.wordpress.com/2020/05/14/can-auctions-misrepresent-supply/.
There is no question that bidders and buyers assess supply (and demand) to arrive at their desired bids, and with less supply, prices tend to increase. Auctioneers and their sellers are right to limit supply to help prices, but is this practice of “on the fly” supply manipulation proper?
The buyer who buys where no more is offered might feel he got a deal, whereas the buyer who buys and more is offered might feel he paid too much. This scheme is far from what auctions used to be where all the property (supply) was displayed, and all sold.
Interestingly, I spoke briefly to the auctioneer before I departed, and he admitted he had more supply of items where he deemed the price insufficient. He told me he would “try those items again” next week … I’m not convinced next week will work any different with many of the same bidders, but he’ll surely find out.
It reminds me of the timeless phrase, “It’s only worth what someone is willing to pay for it.” Yet, supply and demand matter. I would submit properly determining the supply ahead of time would be better than “on the fly” as the latter makes buyers wonder just how much is available — possibly making them bid less with less disclosure.
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.
Comments