More and more, auctioneers are being told not to use the word, “auction” in their advertising. We explored this in depth here: https://mikebrandlyauctioneer.wordpress.com/2016/01/29/the-word-auction-in-auction-marketing/
Why would someone — anyone — suggest the word “auction” is … inappropriate, counterproductive and/or detrimental in auction marketing?
What do people think when they see the word “auction?” Does this word in marketing or sales-format discourage bidders/buyers from participating?
There are lots of studies out there about auctions, and many focus on eBay and their (seller’s) transition from auction-style listings in the early 2000’s to now mostly “Buy It Now” listings.
It seems the overall trend these studies cite include that buyers (consumers) favor convenience over a possible discount. In other words, a fixed price offers convenience (I can literally “buy-it-now”) versus the seduction an auction offers of, “I can maybe get a deal …”
In early 2015, we wrote about Ashley considering her options to buy a necklace for her mother: https://mikebrandlyauctioneer.wordpress.com/2015/01/19/should-she-buy-at-auction/ She buys that necklace at a jewelry store rather than at a live or online auction.
I would agree that eBay auctions were a form of entertainment in the early 2000’s and that today, consumers have lots of ways to find entertainment outside of buying “stuff.” Too, the speed in which things can be purchased otherwise largely outpaces the auction-style sales format.
So what do people today think when they see the word “auction?”
- I’m sure the seller wants to sell.
- Humm … the seller may decide not to sell?
- I’ll have to bid.
- Other people will be bidding too?
- I might get a deal.
- I might not get a deal?
- I’d guess it’s fairly easy to bid
- Hold on … this appears somewhat complicated.
- I’ll just go over now and take a look at these items …
- Well I guess I won’t as preview is only 11:00 a.m. – 2:00 p.m. Tuesday.
- Auctions are fast and this will be a quick process.
- But I’m busy; I’m not sure all this fits in my schedule.
- I’m sure there’s a warranty, return policy, delivery …
- Wait, what’s all this “as-is” “where-is” “no guarantees” “no warranties?”
- There’s financing and/or payment terms, right?
- Oh, I have to pay in full right away?
- I’m hoping I have other options …
But do buyers always have options? 7,000 acres in Wyoming selling at auction … a one-of-a-kind Weller jardiniere … a guitar once owned/played by Bruce Springsteen? Auctions (and the word “auction”) are the perfect solution here: Very limited supply, lots of demand, and competition resulting in the highest possible price; bidders are drawn in on the prospect of a deal which far outweighs all these aforementioned purchase frictions.
This is no different than any time in history: Lots of supply coupled with not much demand moves sellers to fixed-price models where they might find a single buyer to hit (essentially) the buy-it-now button. This isn’t rocket-science; when there is less supply than demand, sellers rule, and when there is more supply than demand, buyers rule. This is the longstanding basis for a “seller’s market” and a “buyer’s market.”
Further, we’ve always had seller markets and buyer markets for certain items (property.) Our first auction events in the early 1980’s drew bidders by advertising the “seller-market” items and then selling those items as well as the “buyer-market” items. Our most recent auction this past Wednesday was marketed and conducted exactly the same.
We’ve told sellers for over 35 years that we can get people to your auction event because of your items in demand, and once we attract those bidders, these other items in less demand will also sell. However, with only items in less demand (or no demand) we can’t attract bidders at auction.
Or, even if property is in demand, but is readily available (both high supply and high demand,) many buyers today choose a retail outlet rather than wait to register-for, bid-on, and secure at auction. A friend of mine used to buy rechargeable batteries online, but now he just goes to a local store which carries them in stock; he says this is easier, less hassle, even if the batteries are about $1.00 more than that online auction.
The Internet hasn’t changed the game, its only amplified and clarified supply and demand. What we thought was a one-of-a-kind 6-drawer treadle sewing machine in a 1986 auction — is not one-of-a-kind today (and wasn’t ever) because we now find others on the Internet. Markets are continually in a state of change because we as consumers and collectors are as well: https://mikebrandlyauctioneer.wordpress.com/2015/08/10/what-some-collectors-cant-find-buyers/
Today, we can now see a much wider marketplace to gauge supply and demand. Property in demand sells well at auction; property not in demand doesn’t. Likewise, the word “auction” results in bidder participation when the subject property is in demand, and otherwise not.
In 2016, we see the word “auction” working (#AuctionsWork) in regard to real property, collector cars, farm equipment, yellow iron, artwork, guns, coins, jewelry … and we see auctioneers turning down projects involving solely glassware, stuffed furniture, manufactured collectibles and the like because there is little or no demand (#AuctionsDontWork.)
I would advise any auctioneer advertising property for which there is far more supply than demand to lessen the use of the word “auction” (or just don’t have an auction) and any auctioneer marketing property for which there is far more demand than supply [or an auction event containing at minimum a material amount of such property] to heighten the use of the word “auction” in order to maximize the seller’s position.
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, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.