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Our staff was sitting around the other day, discussing our schedules and seeing when one or the other was needed to cover for others, with vacations, prior commitments, and other auctions conflicting. The question was raised briefly, “Are auctioneers commodities?”
We concluded rather swiftly, that the answer was, “No,” that auctioneers were not commodities. Let’s first look at what a commodity is:
Several definitions found on the Internet note that: A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market and that commoditization occurs as a goods or services market loses differentiation across its supply base.
Back to our discussion about auctioneers. Are auctioneers, or the ability to provide auction services, or auction services themselves, commodities? In other words, with the obvious demand, is there any qualitative differentiation across the supply base?
Said another way, is one auctioneer just like any other?
When a person hires an auctioneer, there is commonly regard for that auctioneer’s expertise on the subject items. For example, for a seller wishing to sell at auction a large inventory of prehistoric artifacts, would that seller likely choose one particular auctioneer (or survey only a small group of auctioneers) with expertise regarding prehistoric artifacts? The answer is, most seller do exactly that.
Sellers otherwise, look to hire auctioneers who have an understanding of their circumstances — empathy for their situation. Here, a seller may be wishing to sell an entire estate with a wide variety of items, and rather than product expertise, possibly a more valued trait of an auctioneer would be someone with experience with this type of circumstance.
Too, some sellers consider the best auctioneer to be someone with a good local reputation and following, concluding that those traits produce the best bidder responses in that geographic area. However, with the Internet allowing bidders to participate from remote locations, many bidders respond more-so to the property being sold, rather than the auctioneer.
We do believe that some sellers choose the least expensive auctioneer, nearly without regard for expertise, location or product knowledge. While we think this is a mistake, it suggests that some sellers do consider auctioneers, “all the same” and so price becomes the single deciding factor.
It does appear that auctioneers are no different than other professionals, such as attorneys, doctors, accountants, real estate agents … For example, with attorneys, many feel there is a real difference between attorneys, and hire the one best suited to handle their case — either that particular attorney has experience in cases such as this, or has the appropriate amount of understanding and empathy, or both.
Many auctioneers report that sellers will assume (or insist) that the auctioneer they have hired be the one managing their auction project, and doing the bid calling the day of the auction. This suggests that some sellers think there is a real difference in auctioneers, and that those differences have value. Certainly, qualitative differentiation here.
Sometimes with larger auction firms, a seller might hire a firm to provide the auction services required, and the auction firm would retain the right to assign the project to the auctioneer of their choosing. Obviously, the seller would be advised to inform the firm of any particular requests, such as a particular auctioneer, before engaging the firm.
Are auctioneers commodities? We believe they are not, and that sellers are advised to choose the best auctioneer for their circumstances.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.