Auctioneers and eBay can learn a lot from each other
In the late ’90s when eBay was branding itself into the consciousness of consumers, traditional auctioneers were asking themselves how to slow the Internet auction juggernaut. They considered auctions conducted in cyberspace a threat to their livelihood. A decade later, traditional auctions are more viable than ever.
“There may be pockets of the pre-existing auction business that have been affected (adversely) by eBay, but by and large, the entire auction market has benefited by eBay,” said Dennis Kruse, president of the National Auctioneers Association.
Today the NAA is encouraging auctioneers to embrace what the Internet and technology has to offer.
“It’s becoming more and more important to utilize the Internet because clients, especially in urban areas, are requiring it. They come to the auctioneer saying, ‘I want you to offer my auction simultaneously on the Internet,’” said Steve Baska, director of communications for the NAA.
Participation in auctions by Internet bidders assures that goods will be offered to a wider audience, thus increasing the chance they will sell at fair market value.
“There are times when it is useful to put certain items on eBay, for instance, art collections or pieces of equipment, that need a larger audience than just the local auction,” said Baska, referring to programs such as eBay Live Auctions.
“Part of what NAA is doing is to educate auctioneers about options available to them on the Internet and how eBay can be useful and not just a competitor,” said Baska.
Meanwhile, the NAA is embarking on a mission to assimilate nontraditional auctioneers.
“NAA is widening the scope of what it is trying to do beyond traditional auctioneers to everybody involved in the competitive bidding method. We’re trying to bring in folks who sell over the Internet in the auction method,” said Baska.
The NAA also is attempting to bring into the fold peripheral personnel involved in the so-called competitive bidding industry.
“There are an increasing number of professional people who help in auction companies putting together real estate deals, for example. We’re reaching beyond the bid caller who gets up and does the auctioning on site,” said Baska.
The NAA acknowledges nontraditional auctions are here to stay. Its new mission statement is “to promote, increase and build the trustworthiness of the competitive bidding method of marketing, including live, Internet and sealed bid auctions, and enhance the professionalism of its practitioners.”
The NAA believes it has much to offer eBay sellers.
“That’s going to be one of the discussions we have with eBay corporate,” said Baska. “The one thing we can offer eBay sellers is education: seminars about auction laws, accounting practices and ethics — how to instill confidence in customers and earn a better reputation. Certainly right now a lot of online sellers do not have a good reputation nationwide because of fraud.”
An argument could be made for the public’s lingering distrust of traditional auctioneers. The NAA strives to dispel that notion.
“We encourage members to use in their marketing and discussions with clients that they abide by a code of ethics. The new generation knows that it’s important to be completely honest and helpful to the client,” said Baska.
The NAA’s benefit programs such as health insurance and credit card service may also appeal to prospective members.
Kruse believes the NAA needs “to stay on top of current trends … what’s happening in the industry, what’s happening in business as a whole and how the auction business can fit into a bigger business model and not be limited to what we traditionally have done.”
Baska, who edits Auction World newspaper, the auctioneer magazine for the NAA, said the hottest topics among member auctioneers are how can we get into real estate, how do we deal with the Internet and how do we use it?
NAA seminars and specialty designation programs address these how-to questions. Topping the NAA’s educational programs is the Certified Auctioneers Institute, which observed its 30th anniversary March 17-19 at Indiana University, the site of the CAI course offerings. CAI coursework takes two years to complete and includes three weeklong sessions.
“It really covers a broad range of things in more depth than they’re able to do in auction school,” said Baska, comparing the CAI designation to that of a master’s degree, “whereas auction school is like a quick bachelor’s program.”
For more information about the National Auctioneers Association, go to the Web site www.auctioneers.org.
Statistics show live auction revenues are rising
Anyone who maintains that Internet auctions have crippled the live auction industry needs to rethink that position. Statistics show live auction revenues rose by $23 billion in 2005, to $240 billion.
“This strong growth of 10.6 percent in 2005 shows that the live auction method is a successful and desired method of marketing for buyers and sellers,” said Dennis Kruse, president of the National Auctioneers Association.
Morpace International, a market research firm, conducted the study that produced the following statistics:
• The total value of all goods and services sold at live auctions in the United States in 2005 was a record $240.2 billion This is broken out as gross auction sales of $225.6 billion plus professional charity auction gross sales of $14.6 billion.
• The 2005 gross sales figure of $240.2 billion represents a 10.6 percent jump over 2004 gross sales of $217.2 billion. The 2004 figures accounted for a 6.8 percent jump over 2003 sales $203.2 billion.
• Real estate was one of the most active live-auction categories in 2005. Residential real estate sales showed an increase of 8.4 percent over last year. Land and agricultural real estate grew 7 percent, and commercial real estate sales increased 4.9 percent.
• Art, antiques and collectibles sold at live auctions saw a modest increase from $11.7 billion in 2004 to $12.1 billion last year.
• Automotive sales, the industry’s largest sector, experienced a slight increase of 2.7 percent.
• NAA-member auctioneers reported that their businesses are growing. By the end of 2005, nearly 67 percent said they had seen an increase in business over 2004; 22 percent reported no change, and 11 percent reported a decrease in sales.
• A breakout of 2005 gross sales figures by major category revealed that live-auction automotive business was still king ($81.9 billion); followed by land and agricultural, commercial and industrial, and residential real estate ($51.2 billion); agricultural machinery and equipment ($18.2 billion); livestock ($17.2 billion); art, antiques and collectibles ($12.1 billion); commercial and industrial machinery and equipment ($12 billion); and personal property ($10 billion). Intellectual property and other sales accounted for the remainder of gross 2005 live auction sales.
Kruse is encouraged by the statistics, prompting him to recommend careers in the auction business to young entrepreneurs.
“I think the opportunity for auctioneering is the best it’s ever been. You have more potential of earning a good income in the auction business than ever before,” he said.