On the heals of declining revenues, eBay is beginning to refocus from online auctions to a “buy-it-now” platform. From the article, I gleaned some interesting tidbits that apply to our traditional auction business.
But as the business of buying and selling over the Internet has matured, the thrill and novelty of auctions have given way to the convenience of one-click purchases. Hershenson will hold his last eBay auction June 3. “The auctions are nothing like what they once were,” he says. “They won’t ever come back.”
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At the current pace, this may be the first year that eBay generates more revenue from fixed-price sales than from auctions, analysts say. “The bloom is well off the rose with regard to the online-auction thing,” says Tim Boyd, an analyst with American Technology Research. “Auctions are losing a ton of share, and fixed price has been gaining pretty steadily.”
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What happened to auctions? Not only do shoppers want convenience, they’re also looking for value. And the proliferation of pricing information online has made it easier for consumers to bargain-hunt and lessened the need to risk overbidding in an auction.
As a traditional auctioneer, some of the above information is concerning to me. However, most of the commentary doesn’t surprise me. In fact, it confirms what I’ve believed for a few years. The auction industry is completely different from what it was several years ago, and it needs to continue to evolve if it is to remain the first choice to for individuals to sell their assets.
“The bloom is well off the rose with regard to the online-auction thing.” Scary. The traditional auction industry has only begun to grasp the “online-auction thing.” This year marks the first year where there are as many (or more) online only auctions in the local papers as there are live auctions. The scary thing is that the bloom is off the rose for most industries, yet the bloom has only begun in the auction industry.
“What happened to auctions? Not only do shoppers want convenience, they’re also looking for value.” This has always been true. Nothing has changed here, except for a how much convenience “shoppers” want. It used to be that an auction was a day long activity. Buyers showed up early, and spent the day at the auction looking for value. Now buyers show up minutes before their item of desire (if they know when it will sell), and leave shortly after the item sells. In our experience, the majority of buyers leave an auction by 1pm – regardless of the start time. We’re now experimenting with earlier start times (8:30 in some cases) to leverage this pattern.
I’m not completely convinced it’s the convenience factor that “happened to auctions.” Rather, I am convinced it’s the busy factor of life. Buyers overwhelmingly indicate they enjoy auctions. However, they have so many other commitments (irons in the fire, if you will) that they cannot spend an entire day waiting for an item to sell. Perhaps, this points to auctions being an inconvenient way to find value. I’m not convinced. If you can’t spend the day, all companies will allow a buyer to leave a bid on an item, and most will allow a buyer to bid via phone on an item. In some instances, auctions include online bidding (pre-bidding), and live online bidding. All are convenient ways to participate in an auction without the time commitment.
We’re continually looking for ways to adapt our business and increase the convenience factor while maintaining value for both our buyers and sellers. Earlier start times are just one step. Other steps we’re considering are the inclusion of online bidding (pre-bidding) on major items, and online only auctions (eBay style – despite the bloom being off the rose). All three steps are an effort to make auctions more convenient to buyers, while maintaining prices for sellers. I’ve got another idea that I’ll explore another time concerning “buy-it-now” options for live auctions.