Continue reading »]]> It’s becoming increasingly common for auction companies to offer online bidding at their auctions. There are a multitude of types of auctions with online bidding. However, I’d like to focus on live auctions that have an online bidding component (i.e. pre-bidding, live bidding, or a combination thereof). In particular, I’d like to examine the registration requirements of two fictitious bidders at an auction with live online bidding. Let’s call the bidders Online Guy, and Onsite Gal. The auction can be of any asset class you’d like, for arguments sake it doesn’t matter.

Online Guy and Onsite Gal both come across an auction that they’d like to attend. They both notice it has online bidding. Onsite Gal has an entire day to spend at the auction. Online Guy on the other hand is taking care of his two toddlers, and finds it more convenient to stay at home than go to the auction with the two toddlers. Online Guy still wants to participate so he decides he’ll bid live online from his home.

Let’s examine the registration process for each bidder.

Onsite Gal
Onsite Gal shows up about twenty minutes before the auction is to begin. She heads over to the clerking trailer and asks for a bidding number. In most cases, the cashier asks for a picture ID. In exchange for the information on the ID, and verification that Onsite Gal is really who she says she is, Onsite Gal is given a bidding number. When Onsite Gal makes a purchase and is ready to leave she is asked to stop and make payment with the cashier. Payment can be in the form of cash, check, or credit card, and once payment is made, she can take her purchases home. However, there is nothing stopping Onsite Gal from leaving the auction with her purchases and not paying.

Online Guy
Online Guy registers a few days before the auction is to begin. He logs in online, and is asked for his address, multiple phone numbers, credit card information, and in some instances is required to provide a bank letter of credit. In exchange for this information, the auction company issues a bidding number. When Online Guy makes a purchase, he is emailed an invoice, and his credit card is typically processed for the purchase (in some instances alternative arrangements are made). Only once payment has been secured and verified as in the account of the auctioneer is Online Guy allowed his purchases. In addition, every transaction that Online Guy makes is tallied and tracked. His complete purchasing history and payment history is logged in a database.

Something Doesn’t Add Up
Somewhere along the line, because we can look a buyer in the face, we’ll give them a credit card (i.e. bidder’s number) with no credit limit, allow them to take their purchase home prior to verification that the funds are good (i.e. bounced check). However, in instances where we can not look a buyer in the face, we require additional safeguards, and in actuality have more historical data about the online buyer (i.e. purchase and payment history) than the onsite buyer. Somehow that just doesn’t add up, and in fact seems backwards.

Auction companies need to apply the same set of registration terms to both online and onsite bidders. In fact, approving an online bidder to participate in your auction that has a history of purchasing and paying for items is safer than handing bidding numbers out to anyone that produces a valid photo ID in person. By overly restricting online buyers, auctioneers are dampening the impact online buyers will have on the bottom line of an auction, and are not serving the seller’s best interest.

Continue reading »]]> I had the opportunity to attend the 2009 National Auctioneers Association Conference and Show in mid-July. The conference is one of my primary networking vehicles of the year within the auction industry. In addition to the networking opportunities, there are numerous seminars over the course of the 5 day conference. Traditionally, I spin through my notes, and highlight key talking points that I can apply to our business.

In a twist, this year, I thought it’d be interesting to post those talking posts here. When possible, I’ve tried to match the point to the speaker, and these are not necessarily direct quotes by more of a paraphrase of their thoughts as transcribed into my notes. Many are applicable to business and general, and many are targeted to the auction industry. Feel free to review them, and make comments about points you like or maybe don’t like, and why. My apologies, ahead of time, if I’ve mixed and matched speakers, or mis-characterized their thoughts.

Aaron McKee
Keys to growth: Capital and Resources; Do good work; Don’t allow technology to make it non-personal; Company serving two industries is never a growth company.

Are we trying hard like our business is on fire?

When we stop prospecting, in 60 to 90 days there will be a significant drop in revenues. If we do not run non-stop, we’ll stop the revenue stream.

If a properly marketed asset takes a maximum pool of buyers, why do we self-select buyers out of the market by providing price ranges?

That last point really got me thinking about how we conduct business. We often inform inquisitive buyers, if they ask, of the expected price range of an asset. But when you consider Aaron’s point, it really is counter-productive to give any type of range. By not providing a range, we are ensuring that our marketing has reached all interested parties, and that they’ll participate. Why market to a specific group, and then “self-select” buyers out of the group and not allow the auction method to work (which coincidentally is dependent on parties at all price levels participating)?

Judd Grafe
We are professional exit strategists.

Companies are setup to be in business not to go out of business.

Judd primarily works in the business liquidation/industrial asset category of auctions. Yet, his comments about being professional exit strategists hit home for me. We primarily sell specialty collections (coins, firearms, stoneware, sporting goods, et cetera) and real estate. Within this realm many of our sellers are first time and only time auction sellers. They’ve spent years amassing their collections, and need us to provide an exit strategy from the collection. So often, we jump to offer them one option: auction. By repositioning as professional exit strategists, or perhaps “asset disposition specialists” we better serve our clients.

Will McLemore
Provide consistency across auction asset classes. Bring uniformity to the asset class by always selling it the same way.

Check website traffic for peak moments to our site. That is the recommended close time for an online only auction. Use the stats and the traffic to our advantage.

Will had much more to say, and I caught up with him during one of the banquets and exchanged thoughts on the industry (and put faces to the Twitter accounts). He is one sharp individual, and his ideas and comments are spot on. Because of his comments, we’re already exploring ways to provide more consistency within asset classes, and I’ve already explored the busiest times on our website (Monday nights at 9pm), and those of other companies to whom I provide tech consultations.

Ross Dove
We will have one mass integration of items for sale with results. Consumers will become dependent on auctioneers for advice, comparable sales, et cetera.

Use of a search engine levels the playing field. Search engines are bigger than the biggest companies.

Auction industry is becoming less transaction and more relational and interconnected.

If an asset has “one right buyer”, an auction is not the best method of sale. In an auction, the price is set by the backup bidder.

Creation of three to five global asset exchanges exclusive to auctioneers, and run by auctioneers.

Mr. Dove had a lot of forward looking, insightful comments – some of which I agree with, and some which I don’t. Yet, overall I left his seminar rejuvenated, and excited about the future. As I say that, I also realize his look into the future paints a picture that is drastically different from the current industry. His picture is of an interconnected commerce platform of all auctioneers providing services to all consumers similar to the MLS approach used in the real estate industry. There are others that champion this future, and those that embrace this “exchange” view of the industry are growing.

I currently straddle the fence a bit on the idea (not a good position to be in) only because there are many assets that we sell that it wouldn’t “pay” to list individually on an exchange (i.e. smaller household goods, certain hand tools, et cetera). The exchange will work for globally traded assets. But assets that can be consumed and traded in a local market, would not be served by the exchange. Yet, I see the immense power in leveraging the consumer to a primary exchange where all assets would be located. As an industry, each auctioneer would loose some of his/her uniqueness, but their clients would be better served.

The above is just a smaller teaser of my notes, and the amount of information and ideas that I packed into my head. I trust you’ll find some of it insightful and helpful. Above and beyond the seminars, the conference was a great opportunity to connect with friends and colleagues and make new connections with colleagues, and now friends. A case can be made that the educational offerings are not always at the level that an individual person desires. However, one cannot argue with unbelievable opportunities to network and get direct insight from industry leaders. We often joke that more is learned in the hallways than in the classrooms. Yet, the more and more I plugin to those individuals floating in the hallways, the more I get out of conference. I’m already looking forward to Greensboro, NC in 2010.