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agency duties, auction, auctioneer, auctioneers, auctions, fiduciary duty, online bidding, reasonable care, simulcast
Many auctioneers conduct simulcast auctions with online and live bidding occurring at the same time. These same auctioneers often allow online bids prior, coupled with simulcast when the live auction starts.
In other words, if the online high bid on lot #68 is $700 then the auctioneer might say, “I have $700 and who’ll bid $725?” If a live bidder bids $725 then the auctioneer might ask $750 … and so forth.
Yet, can the online bidder that was on at $700 bid again? Can that bidder bid $750? He can’t if the auctioneer shuts off the online bidding prior to the live auction. We ask here, why would any auctioneer do this?
Auctioneers are tasked to maximize the bidder pool and as such maximize price for the benefit of the seller/client. If online bidding is “suspended” at the beginning of the live auction, the auctioneer is doing neither.
Could a seller be disappointed with a lack of a bidder pool and associated prices — especially if it was the auctioneer’s decision to lessen the number of bidders? Certainly.
It would seem reasonable that if the seller/client had knowledge of this “odd” arrangement and consented to such, that it would be acceptable, but every auctioneer should make sure their seller/client knows of the obvious downsides — fewer bids and lower prices.
Auctioneers are tasked with fiduciary duties owed their sellers/clients and those include “reasonable care.” It would appear to us shutting off online bidding when the live auction starts violate such duties owed. https://mikebrandlyauctioneer.wordpress.com/2009/11/18/what-do-auctioneers-owe-their-clients/.
Even if this wasn’t required behavior, it’s not a heavy lift for any auctioneer to continue online bidding during the simulcast (live & online) auction; more for the seller, and likely more commission for the 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, 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.
Mike Brandly, Auctioneer Blog 
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Sometimes I feel like you’re baiting me.
We did this for many years – essentially using the internet as mechanism to capture a very large number of absentee bids. It was quite successful and I would argue, at the time we did it, much more successful than were we to offer simultaneous internet bidding. Because everyone was forced to place absentee bids, we had the luxury of not having to wait for internet bids since we had them all already. We sold north of 70% of our items to those absentee internet bidders – and we had some big crowds at our events.
That was 15 years ago, and things have changed during that time. But this was once a very successful mechanism that allowed huge internet participation – and successful purchases – and a cadence north of 100 items per hour on average at the in-person events. Had we been forced to wait for real time internet participation, and our online bidders waited to – and often forgetting to – participate until the event, our auctions would have been slower, our crowds smaller and our prices lower.
I believe we might have done it 15 years ago, but it’s 15 years later, and we do simulcast all the time now. Maybe it seems academic to me because I have such a talented staff that makes it appear seamless, and it’s great for the seller and me.
As I said, things have definitely changed!
There are a ton of requirements for this method to be successful, for what it’s worth. It’s not going to work well for an auctioneer who hasn’t spent years building a community that is used to it. It would likely fail for anyone trying it who has existing customers used to real time internet bidding. And it would probably fail for a company trying to alternate methods from one auction to another.
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I love simulcast in the retail environment…
Here’s an interesting one… a charity auction I do annually (coming up in a week) told me about a month ago that they were adding an online bidding component through a partner company, to which I asked if they would be able to simulcast during the live auction. Regrettably the partner hadn’t thought of that yet, so the announcement on their website to potential contributors is to bid very high prior to the start of the live auction. I tried… maybe next year…