If my grandfather knew I’d become an auctioneer, he’d roll over in his grave.
Back in the Great Depression, my family was one of many that were turned out of their homes by a bank foreclosure. Since auctioneers were agents of the bank, the family’s ill will toward the bank transferred to all auctioneers. Nary was a kind word said about those in my profession as I grew up.
Consequently, I didn’t attend my first auction until I was in my mid-30s. Seeing that first auction changed the course of my life. I found the whole affair invigorating: the chant of the auctioneer, the competitiveness of the bidding, the energy of the crowd. Soon thereafter, I began my apprenticeship in the auction trade and never looked back.
In the years since, both the auction business and commerce in general have changed substantially. When I started in the business, auctions were mostly local affairs with a bidder pool derived from the surrounding community. Crowds would vary and were generally the worst during bad weather. Bigger crowds equaled more competition and higher prices for the consignors (not to mention higher commissions for the auctioneer).
As an auctioneer, I hated to see a poor crowd. Poor crowds cut down on the competition and resulted in lower bids and a lower commission check. As a buyer, though, I absolutely loved to see a poor crowd because that meant I would pay less for merchandise and profit more later. If it rained or snowed, I looked for an auction to attend.
Auctioneers have always used whatever means was available to them to increase the bidder pool. “Left bids” (bids placed prior to the auction) have always been a standard practice. A hundred years ago, buyers who couldn’t attend an auction sent proxies to bid in their place. Fifty years ago, bids could be placed by telephone with an auction assistant acting as proxy at the other end of the telephone line. Thirty years ago, auction houses began to accept bids by fax. Fifteen years ago, auction houses began to offer their lots online.
Today’s bidder pool can be worldwide thanks to the Internet. Bidders can participate in an auction from the comfort of their homes. With online-only auctions, however, bigger crowds do not automatically translate to better prices for sellers. Why? Because online auctions lack the key element that makes live auctions work so well: The imminent drop of the hammer within seconds of when the bidding is opened. Bidders at a live auction know that in order to win they have to act quickly or their item will be lost.
The bidding pressure of a live auction simply doesn’t exist in an online-only auction. Online-only auctions drag on for days, with most bids being placed by electronic proxy or in the last few seconds by sniping software.
Where’s the excitement in that?
Bidders set their maximum bid and then walk away. I used to enjoy buying on eBay, but it has become just another e-commerce retail outlet, with most items being sold with reserves or a “buy it now” option. EBay’s current focus is fixed-price selling, and the results are noticeable: fixed-price sales have nearly doubled from just more than a third of overall sales in 2006 to almost two-thirds today. Not only is there no “action” in eBay auctions, there are precious few actual auctions.
In the 21st century, technology has once again given a boost to auction selling. Live auction streaming (live auction webcast with bidding capability) offers buyers and sellers the best of both worlds: The immediacy and excitement of a live auction combined with the drawing power of the Internet. Live auction streaming puts online bidders right into the thick of the auction bidding, competing with bidders at an auction’s physical location. Live auction streaming increases the bidder pool, and with it the prices achieved by the sellers and the fun had by the bidders. Three of the world’s top auction companies — Christies, Sotheby’s and Heritage — all employ a combination of live and online auctions. Mid-sized to small auction companies, even local charity auctioneers, successfully employ a combination of live and online auctions.
That being the case, why don’t all auction houses offer live streaming? Every week I see auction ads in local newspapers and industry periodicals that advertise a stunning selection of goods for auction, but the only bidding option advertised is to show up in person and bid. I’d love to attend some of these auctions, but I’ll be darned if I’m going to fly to New England or Texas to do so. Neither will anyone else. Soon, sellers will begin to demand the national and international audiences that live streaming auctions can provide. Then, auctioneers will either have to jump on the live streaming bandwagon or close their doors.
Clearly, auction houses that employ live streaming or other “simulcast” live-online options hit higher sales numbers than auction houses that depend on local bidders only. Industry statistics are not available and private companies are reluctant to advertise their sales numbers. But, anecdotal evidence of doubling sales by combining live and online efforts abounds, as in this video clip provided by Proxibid: http://youtu.be/i9BwYq9Iya8.
Proxibid isn’t the only show in town, but they might be the largest. When it launched in 2002, Proxibid had five clients. Today, the company provides services for more than 1,000 auctioneers around the world. Other significant players in the live auction streaming business are LiveAuctionGroup.com, iCollector.com and RealTimeBid.com.
In my next column, I’ll discuss the pros and cons of a few of these streaming auction platforms, so that those of you who are not yet “hooked up” can discover what might work for you. Following that, my column will contain an interview with the owner of an estate consignment store who developed an auction platform for having in-house auctions — without an auctioneer — and with full Internet bidder engagement. In the meantime, register for a few live streaming auctions, see what they have to offer and get a feel for how they operate. There’s more to come!
|About our columnist: Wayne Jordan is a Virginia licensed auctioneer, certified personal property appraiser, and accredited business broker. He specializes in the valuation and liquidation of estate and business assets. His column Behind the Gavel appears in every issue of Antique Trader. Learn more at www.waynejordanauctions.com, 276-730-5197 or email@example.com.|