Tim is an auctioneer in Florida. His once-a-month antiques and collectibles auction is about to begin. This particular auction has a large consignment of antique lighting, along with some early side tables and parlour seating. He has a large crowd in attendance.
As Tim sells the first few items, he comes to a 1930’s parlour floor lamp with an unusual slag shade. The opening bid for this lamp is $100 and quickly reaches $300, $325, $350, $375 … and ultimately sells for $475 to bidder # 268.
The next few items are tables and fern stands of the same period of this parlour floor lamp. Bidder # 268 is the high bidder on both tables, and all three fern stands.
Of course, bidder # 268 could be a collector of such items or a dealer who deals in such items … or is there another possibility?
Henrik Hagtvedt, a professor at Boston College co-authored a study where it was suggested that the purchase of one “luxury item” may well lead to the purchase of another — similar to the purchase of just one sweet desert might lead to the purchase of more sweet items, in defeat of a dieting effort.
- “When we buy something with unique design elements and it doesn’t fit in, it frustrates us,” says Professor Hagtvedt. “This is because the design has intrinsic value. Rather than returning the item, we actively seek ways to make the item fit, often by making complementary purchases.”
This study seems to say that as auction buyers make their purchases, what some may be doing is purchasing complementary items of like kind based upon their previous purchases.
As I was discussing this theory with another auctioneer just the other day, that auctioneer told me that he had this exact situation occur at his auction back in December. As he reported it, a bidder — who had never been to one of his auctions before — purchased a few lots of tools and related hardware, and then purchased a workbench, tool cabinet, and other related items thereafter.
Of course, this could simply be explained as this bidder buying the tools, and then needing the tool cabinet, for example, but the auctioneer asked this bidder about his behavior. The bidder told the auctioneer he had a tool cabinet, and workbench at home, but with these new tools, he felt almost compelled to buy a new workbench and new tool cabinet. In fact, this bidder asked the auctioneer about consigning his old workbench and tool cabinet to his next auction.
There is also the notion of the economy of scale, where applied here might suggest that a furniture dealer might tend to buy more items — once he buys one — since he will have to send for his truck anyway. The theory here might be, “If I have to bring my truck tomorrow to pickup this bedroom suite, I might as well buy other items that can be picked up at the same time.”
How can auctioneers structure their auctions to take advantage of this behavior? Can auctioneers structure their auctions to take advantage of this behavior? It would seem that the more spread the purchases are at the beginning of an auction, the greater number of vested bidders will be there to possibly bid more on subsequent items as one auction purchase might encourage another.
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 serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.