The "basics" of the auction business?
I published this blog on June 6, 2018 about the auction industry losing bidders due to some illegal/unethical practices: https://mikebrandlyauctioneer.wordpress.com/2018/06/18/how-the-auction-i...
In that blog, I noted that a federal judge asked me to bid call during testimony, demonstrating an auctioneer running the bid (taking fictitious bids.) My remark to the judge’s question, “How prevalent is this practice?” was that it was quite prevalent in this subject auction, and all too common otherwise in the United States — meaning it happens way too much.
Nevertheless, the subject of without reserve (absolute) auctions was referenced, as sellers can and do bid during with reserve auctions. That topic caught the attention of a major player in the auction industry.
Chris Holmberg is Director, Sales Effectiveness at US Ritchie Bros and Iron Planet and commented as follows:
"Page One, Paragraph One of “The book of Ritchie Bros., never play games with your buyers and be fair and transparent to both your buyers and sellers.” So many auction companies don’t get this. For anyone at those auction companies that continues to play these games … please consider all of the options now available to consumers and wise up. Here are the basics of the auction business: Serious sellers sell absolute/unreserved. Serious buyers buy absolute/unreserved. Serious buyers won’t tolerate games or reserves. Put serious buyers together with serious sellers and your company provides a valuable and needed service …"
Auctioneers who routinely sell property absolute know what Chris is talking about — larger crowds, more bidders, higher prices and happy sellers. If you are an auctioneer routinely avoiding selling property absolute — it might be worth a try to see if you realize similar results.
Of course, on the seller side, it’s about qualifying the seller. Not all sellers are suitable for an absolute auction; as well not all sellers are suitable for selling at auction at all … Sellers with equity, some sense of urgency and reasonable expectations are good candidates to sell at absolute auction.
I think it’s fair to say that sellers who opt for with reserve auctions have reservations about selling at auction. Likewise, sellers selling without reserve suggests to me they have no reservations about doing so and believe in the process.
So far as bidders and buyers, the word, “absolute” and/or the notion that the property is selling to the highest bidder no matter what is a powerful marketing technique. Such draws bidders/buyers to any such auction and is the reason some auctioneers abuse the term — essentially attempting to sell with reserve but advertise absolute.
We wrote about the power of absolute auctions here: https://mikebrandlyauctioneer.wordpress.com/2016/08/25/the-power-of-the-... There is likely no other word or phrase which excites bidders to participate in any auction — and likely no word or words like “with reserve” which suggests “we might sell, and we might not …” to keep people disinterested.
This article has been published with permission from the author.
The original article and image can be found here.
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, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.