In regard to personal property, they can go to a store or retail outlet, warehouse outlet, a mall, a flea market, a yard sale, a garage sale, an auction and/or look online at retail store sites, eBay.com, Craigslist.com, Amazon.com (and many others,) and/or any other sort of online auction.
In regard to real property, they can drive around, call a real estate agent and/or real estate auctioneer and/or look online at a wide variety of real property offerings including HUD homes, sheriff sales, broker’s listings as well as other real estate auctions.
While today, many people wishing to buy real or personal property look online, our question regards if the Internet, via some electronic device, is the best tool to actually consummate the purchase. In particular, is bidding on auction items via the Internet better or worse for the seller than an in-person transaction?
We could just as well ask, is bidding on auction items via the Internet better or worse for the bidder?
- Best for the seller? High price.
- Best for the bidder (buyer?) Low price.
Of course, many immediately look at the comparison of online bidding versus in-person bidding, and assess the differences in terms of “number of [potential] bidders.”
In other words, online bidding allows for thousands (if not more?) of people to bid while in-person auctions, by contrast, can practically accommodate only a modest pool of bidders.
Other than sheer number of bidders, our question regards if we had the same number of bidders, would it be better for the seller (and/or better for the bidder/buyer) if all were bidding online or in-person?
Relatedly, we wrote about these two topics:
An experiment that might have taken place somewhere had 7 (seven) auctioneers standing next to each other, with a crowd of about 50 bidders. Each auctioneer was bid calling at the same time, each selling a different item, but an item which was of interest to many of the prospective purchasers.
What the coordinator of this experiment might have concluded is that the “distraction” of seven auctioneers all bid calling at the same time caused confusion, disorientation, and a lack of focus and attention to any of the particular items selling.
For instance, one bidder was interested in what auctioneer #4 is selling, but was distracted by what auctioneer #2 and auctioneer #3 were selling, and so forth. Would it be prudent to sell items in this fashion? Not hardly, as we would want the bidders focused on one item, and not distracted by other items of similar nature, nor distracted by anything else for that matter.
What about another experiment, where an auctioneer required all his live in-person bidders to carry with them an Internet-enabled laptop, tablet or smart phone? All the bidders could comparison shop while items were put up for bid — thus seeing comparable sales, other similar items currently for sale and reviews (good or bad, although most Internet reviewers are complaining about something) of those items.
What the coordinator of this second experiment might have concluded was that this “distraction” of Internet access during the live in-person auction caused second-guessing, reevaluation, and reflection — generally causing bidders to contemplate how much to bid, or more importantly, how much, “not to bid.”
For instance, several bidders found similar, if not identical Rolex wristwatches to the one currently up for bid. Those wristwatches included several currently for sale as well as recently sold. Would it be prudent for all the bidders to have this information? Not hardly, as we would want the bidders focused on this one item, and not overly informed by what the current market dictated as value.
It seems the common word here is, “focus.” Auctioneers want bidders to sense scarcity of supply, thus indicating a heightened value. Since the beginnings of economic study, it has been widely held that as supply lessens, and demand increases, prices (and thus value) increases. An auction exhibits demand in a material fashion, to an extent almost unseen in other markets. For this Rolex wristwatch, auctioneers want bidders to think it’s the only one on earth.
Further, considering how easily people are distracted, is bidding on a platform connected to the Internet prudent at all in light of the immense number of possible distractions (billions of other websites, pop-ups, Facebook notifications, multiple open windows … solitaire,) coupled with the likelihood of bidding at home or the office with all those additional distractions (coffee, television, kids, phone ringing, texts, conversations …?)
Matt Mullenweg, leader of Automattic, the company that controls blogging behemoth WordPress (www.wordpress.com and www.wordpress.org) recently commented about the Yahoo.com work-at-home program essentially being dismantled, with workers now required to come to the office to work:
- “The center of gravity for an organization should be as close to what they make as possible,” Mullenweg said. “If you make cars, you need people in the factory. If you breed horses, be in the stable. If you make the Internet, live on the Internet, and use all the freedom and power it gives you.”
Maybe an auctioneer could make the same argument, of sorts:
- “The center of gravity for an auction should be as close to what is being sold as possible,” the auctioneer said. “If you auction cars, you need people at the car auction. If you auction horses, be at the horse auction or in the stable. We want to “distract” people on the Internet to pay attention to our auction, but otherwise, we want them all for ourselves, in-person.”
I heard an auctioneer say in a seminar last year, “The Internet now allows bidders to be better informed and make more educated decisions.” Is that want an auctioneer is looking for when selling propeerty? Better informed? More educated? It would seem maybe the opposite — auctioneers can generally better enhance price with less informed, less educated bidders, particularly at the exact moment of bidding.
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.