I tried to pay attention at our last auction regarding “Bids per lot” and “Number of bidders placing bids” for some of our material auction lots. For example, we had maybe a couple dozen pieces of Reed & Barton Burgundy sterling flatware up for bid maybe 25 minutes into our weekly auction.
I asked for an opening bid of $1,000 and dropped down to $500 when a known-silver-buyer opened the bid at $300. I asked $350 and got it, returning to this previous bidder who bid $400. The bidding continued to $550 in this manner until the original bidder cut the bid to $575 where I returned to the other bidder asking $600.
This other bidder bid $600 and the original bidder didn’t — as well as no other bidders — bid any more and I announced, “Sold!” for $600. Bids per lot? 7. Number of bidders placing bids? 2. Is this final bid of $600 market value? Many in that crowd concluded it was in excess of market value. Nonetheless, our client was more than pleased with the sale price and brought more silver and other items in for our next auction.
I only bring this up because I keep hearing (and seeing) auctioneers posting the number of “Bids per lot” and “Number of bidders placing bids” from their auctions, suggesting they are serving their client better — with a very similar partial set of this sterling selling with 350 bids and 127 different bidders bidding. Sale price? $562.50 … about the same as us.
We could have had more hands in the air if I had suggested $1.00 as an opening bid — essentially malpractice in a live auction. Further, we could have had 125 different bidders if I took bids from various people without regard to the previous bidder and reasonable increments — essentially malpractice in a live auction. But we didn’t. We were not trying to maximize bids per lot nor number of bidders placing bids and neither should you.
As an International Auctioneer Champion (IAC) auctioneer told me a few years ago … “It’s okay to start a bit below market to get the momentum rolling, but get to market value as soon as you can and say, ‘Sold!'” Trying to maximize bids per lot or number of bidders is exactly counter to that — as if 350 bids (or 127 different bidders) ending at $562.50 is better for the seller.
I joked the other day that 286 of the 450 bidders at the live auction were wearing hats. How about the number of bidders wearing a sweater? Number who drove there with more than 2 in the car? I agree all of that constitutes statistics (data) from our auction, but is any of that germane? I don’t think so, and I don’t think John Schultz thinks so either when he says, “Using the minutiae to justify/compare the methods of sale is not relevant.”
We wrote about this concept a few years ago, but it seemed time to revisit the topic in light of many pronouncements of statistics from various online — and live — auctioneers around the country implying a contrast with those with less bids/bidders: https://mikebrandlyauctioneer.wordpress.com/2012/01/05/number-of-bidders-per-item-number-of-bids/
I have held my entire career that maximizing the number of bidders maximizes the chance of having the right two bidders. However, attracting and securing bidders costs money. If getting 20 more bidders costs $500 which produces $375 more in proceeds … it’s all about cost of sale. In fact, if you hire an auctioneer who says he can get you 11% more but his commission is 10% higher, find another auctioneer.
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.