auction, auctioneer, auctioneers, auctions, Board of Directors, cost benefit analysis, data, marketplace, National Auctioneers Association, online platforms, prices
Yes, prices do indeed go up somewhat frequently. We noted in 2020 that prices did go up for many auctioneers, and we were surprised by their surprise: https://mikebrandlyauctioneer.wordpress.com/2020/09/10/what-your-vendor-raised-prices/.
More recently an online auction marketplace platform raised its prices and the general reaction was to find another cheaper provider. Yes, as long as it costs less, “I’m switching.” I think I remember this type of analysis in college … “cost/it doesn’t matter” analysis?
For instance, a platform that charges $39 per auction is far better than a platform that charges $500 for the event, and 5% sell-through. Why is it better? It costs less and nothing else matters.
But other things do matter. You see, I didn’t actually study “cost/it doesn’t matter” analysis, and, rather “cost/benefit” analysis. This little-used theory in the auction business suggests auctioneers should use the platform that has the highest net benefit (benefit minus cost) and not just the lowest cost.
Part of this cost/benefit analysis is how easy the software is to use for the auctioneer, but also what reach the software has, how many people are in its marketplace, how easy is it for bidders to use, payment processing, and other features. However, you wouldn’t know it from how most auctioneers shop.
Costs certainly include the platform charges, but also what additional marketing must be done for any auction event. For example, if I can pay $500 plus 5% sell-through instead of $1,000 in additional marketing, maybe I should? Nope — never mind — as that would require cost/benefit analysis and “benefits” don’t matter.
Relatedly, some are arguing that the National Auctioneers Association should do something about these online marketplace platforms (which are raising their prices) competing against us traditional auctioneers. For instance, “What is the current Board of Directors doing?”
For that matter, what did the 2020 Board of Directors do? What did the 2016 Board of Directors do? What about the 2010 Board of Directors? The 2004 Board of Directors? It seems to me the current administration and Board are doing quite a bit …
It could be, as some have suggested, most auctioneers are set in their ways, and as I’ve suggested, it’s too late to do anything about all of this: https://mikebrandlyauctioneer.wordpress.com/2021/02/27/auctioneers-is-it-too-late-does-it-matter/.
Finally, back to this raising of prices from these marketplace platforms, we would humbly suggest auctioneers look at the cost/benefit and net benefit rather than using the dubious “cost/it doesn’t matter” method.
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, Brandly Real Estate & Auction, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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