Don’t penalize Internet buyers

Our friend John Schultz wrote a great blog post this morning about the importance of ensuring that registration requirements were similar for Internet bidders and live bidders. He describes the effect of restricting Internet bidders as follows.

John Schultz

Auction companies need to apply the same set of registration terms to both online and onsite bidders. In fact, approving an online bidder to participate in your auction that has a history of purchasing and paying for items is safer than handing bidding numbers out to anyone that produces a valid photo ID in person. By overly restricting online buyers, auctioneers are dampening the impact online buyers will have on the bottom line of an auction, and are not serving the seller’s best interest.

We completely agree. We’d like to take that thought a step further, however, and say that there should not be a difference in cost between bidding live and using Internet bidding.

Many auctioneers charge a higher buyer’s premium to Internet bidders, usually because there is a sell-through percentage charged to the auctioneer by some Internet bidding providers. The sell-through percentage is a fee charged by some bidding providers that is a percentage of each item sold to Internet buyers. Most auctioneers elect to pass that sell-through percentage on to the buyers.

Here’s the problem. A higher buyer’s premium charged to Internet bidders is absolutely a penalty for placing Internet bids as opposed to placing bids at the auction. The incentive is to not place Internet bids, and the bottom line of the auction suffers.

How, then, can an auctioneer pay for the sell-through percentage charged by the Internet bidding provider if he uses a provider with such a fee structure? Is it simply a cost of doing business like credit card fees? Should it be passed to the seller?

The majority of the costs of conducting an auction are incurred because of the live bidders. The live bidders require bathrooms. The live bidders require labor to clean the auction location. The live bidders require paying a ring staff, bid callers, cashiers – all sorts of expenses that are in addition to and greater than the after-auction labor involved with handling the Internet bidding. With this regard, it absolutely makes sense to increase the buyer’s premium for live customers at least to match that premium incurred by Internet bidders.

Auctioneers who figure out how to make not only buyer registration requirements the same but also make sure that there is no financial penalty for placing Internet bids will see more participation from Internet bidders and do a better job for their sellers.

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Proxibid announces redesigned homepage, timeline for embedded bidding


Proxibid's new website, launch expected in mid-September

Following last month’s announcement of an upcoming embedded bidding solution, Proxibid today announces that auctioneers can begin reserving this solution in mid-September. Also announced today is the preview of the new layout of the Proxibid website which looks like it sports a much cleaner appearance. Gone are the borders and tables, the auction calendar has been moved off of the front page, and a prominant graphic greets the user advocating different types of auctions.

Also in the press release are example screenshots of the upcoming embedded bidding solution. The example given is on the Miedema Auctioneering and Appraisals website and it appears to be a very seamless integration. You can view the screenshots.

Here’s the release.

As you already know, in just a few short weeks, auctioneers will have access to the auction industry’s most powerful embedded solution. Proxibid’s embedded solution will allow bidders to create an account, register to bid, launch the online bidding application and place bids through the auction catalog without leaving the auctioneer’s Web site. Our embedded solution will fit seamlessly into the auctioneer’s Web site, ensuring bidders have access to a full-service online auction experience. Auctioneers can begin reserving their embedded solutions in mid-September.

Because we’re full of surprises, we have another special announcement. In addition to the launch of our embedded solution, Proxibid’s Web site is soon to have a new look and feel. Our new Web site design will feature enhanced navigation and a much cleaner, faster-loading homepage. Advertising will move off the homepage and will be located on category-specific landing pages, providing auctioneers the opportunity to market directly to a captive audience, and enabling bidders to go right to the content in which they are most interested! While the Web site will have a new look and feel, the core of the site will remain familiar to the user, ensuring a smooth transition for everyone. Watch for Proxibid’s new and improved Web site design to make its debut in mid-September.

To see examples of the embedded solution and the new homepage, please visit .

Follow us on Twitter for updates on both of these exciting projects, as well as advanced notice for launch dates, at

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NAALive finally comes to an end

Long a thorn in the sides of other Internet bidding providers, the National Auctioneers Association‘s affinity relationship with is coming to an end. We’re excited about this development, as we feel it will foster a more open and competitive development of Internet bidding methods and techniques among all the vendors. Here’s the release.

Overland Park, Kan., August 31, 2009 – National Auctioneers Association (NAA) announced today the dissolution of its relationship with Inc. (NYSE Amex “AAC”) , a high-tech liquidator and online auction facilitator that operates the domains and NAA Live is an online auction site utilized by members of the NAA to market auctions both live and online. The NAA has maintained an affinity relationship with Inc. for over 5 years. The NAA is the nation’s largest professional association dedicated to the auction profession and industry. Membership in the NAA ranges from real estate and art auctioneers, to heavy equipment and automobile auctioneers.

“It was determined by the NAA and Inc. leadership that the two organizations would terminate their affinity relationship effective August 31, 2009,” said Hannes Combest, NAA CEO. “Since the relationship was created, Ableauctions (NAA Live) has been a proud supporter of the association and its membership. NAA Live and other live online auction companies have led the way in the expansion of auction technology and thanks to their endeavors the auction method of marketing continues to grow and flourish both live and online in today’s marketplace.”

“While we have enjoyed our relationship with the NAA, this does not mark the end of our support for members of the association. Rather, we look forward to a new beginning with a cutting edge platform suitable for all types of auction and one which is fully adaptable to the needs of today’s auction marketplace. We will continue to support the NAA wherever possible and remain a proud advocate of the auctioneering profession.” says Thorsten Bonn, CEO of Inc. will continue to operate the domain name until April 30, 2010. Effective May 1, 2010, will direct back to the National Auctioneers Association homepage

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Watch champion auctioneers on YouTube

We follow @naaauctioneers on Twitter and so should you. Recent tweets from NAA have alerted us of today’s posting of video of the winners of the IAC to YouTube. Here are our 2009 IAC champions Kevin Borger and Terri Walker.

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Strengths of Internet bidding

Image representing TiVo as depicted in CrunchBase
Image via CrunchBase

There is a device for your TV called a Slingbox. This device does what is called place-shifting, allowing you to watch your cable TV – that for which you’ve paid and normally watch at your home – on your mobile devices like your iPhone.

There is a device much more popular than the Slingbox – a device that has become so ubiquitous that its name has become a verb – called a TiVo. The TiVo, as we all know, does what is called time-shifting, allowing you to watch your programs on your schedule so that you’re not required to be in front of the TV when the show is initially aired.

There is a company in the Kansas City area called Public Auto Auction that is using a fairly unique Internet bidding model. It is essentially a real-time Internet only auction that is designed to emulate a live event. Their pre-auction bidding actually closes before the event and then bidders log in for a “lightning round” to establish the final price. Here’s the description of the mechanics from their website.

Each new bid will appear in the bid window. Click on one of the Set Bid Amount buttons to set your bid price, then click the Place Bid button. The High Bid button will turn green if you are the winner, and red if you have been outbid. When there are no bids for 5 seconds, the program will start a countdown. If there are new bids, the clock starts over.

Once the countdown reaches zero, a winner is declared, and the next vehicle is brought up for auction. These auctions continue as long as there is bid activity, so no one can place a bid at the last second.

Elsewhere on the site they write, “Place a prebid if you wish.” It’s clear that the majority of the activity is expected to occur during the lightning round. We have no firsthand knowledge of how successful this approach is, and we certainly aren’t criticizing such an interesting system, but we can’t help but notice the effort that went in to trying to simulate a live auction.

One of the biggest problems with a live auction is that someone is forced to pay attention at a specific time. All Internet bidding obviously takes care of place-shifting, so it doesn’t necessarily matter where you are, but for real-time Internet bidding it still matters when you are.

The specious defense often used is that pre-auction bidding is always available. However, buyers will understand that the real action occurs during a specific event like a live auction or a lightning round of bidding and won’t make their best bids until that time. We can never completely eliminate time from the equation, and the use of automatic extensions is a great way to ensure that time is less of a variable at the end of the auction, but Internet only auction that simply begins to end at a set time will reduce the perceived importance of an event and cause bidders to place greater trust – and greater bids – throughout the entire course of bidding.

This isn’t an article advocating Internet only auctions over live auctions. There are decisions we all must make based on the best interests of our sellers that will govern the choice between a live auction or an Internet only auction. However, when the selection has been made in favor of an Internet only event, we need to remember that our customers will get the benefits of both place-shifting AND time-shifting. When we try to create an artificial event to create excitement, we actually take away from the benefits of time-shifting and our bidders get fewer benefits and our sellers get less value.

Any system that forces or appears to force customer participation at a specific time will, in our opinion, ultimately lose out to systems that don’t offer an advantage based on the time of participation. Why is the TiVo much more popular than the Slingbox? Being at a specific place isn’t nearly as difficult as being somewhere at a specific time.

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