Kurt Aumann, CAI, ATS

Joining me today for the fourth in the Auctioneer Interview Series is my friend Kurt Aumann, CAI, ATS. Kurt is an auctioneer for Aumann Auctions from Nokomis, Illinois, and is currently the Vice Chairman of the National Auctioneers Association Education Institute Trustees.

You’re listening to the AuctioneerTech Auction Podcast. Today is Wednesday 28 January 2009. Auctioneertech.com. Technology, auctions and auctioneers, auction tech for the auction industry.

AuctioneerTech: Hello and welcome to the fifteenth episode of the Auction Podcast from the AuctioneerTech. My name is Aaron Traffas and joining me today for the fourth if our ActioneerTech.com interview series is my friend Kurt Aumann, CAI, ATS. Kurt is an auctioneer for Aumann Auctions from Nokomis, Illinois, and is currently the Vice Chairman of the National Auctioneers Association Education Institute Trustees. Good evening, Kurt, and thank you for joining me.

Kurt Aumann: Well thanks for the invite and I’ve been looking forward to this.

AT: We are trying something new this episode and we will try and do it in the future, but we are streaming this live, the recording anyway, from auctioneertech.com, so if you’re listening to this in the recorded version, know that if you pay attention to the website in the future you’ll be able to watch us recording these live. Back to the questioning, Kurt, tell us a little bit about yourself and how you came to be an auctioneer.

KA: Well I grew up in the business and went to auction school at the tender age of 12, so I have been in it my entire life. My dad started a business and it was, I would say a small local business – maybe county wide. And there were a lot of household and state auctions and so on and so forth. After I got out of school, I decided that maybe that universe just wasn’t quite big enough for me so we started focusing the business more on some niche markets. Things have grown since, so it’s been a good ride.

What is Aumann Auctions today and what kind of stuff specifically do you sell?

Well, we have a staff of about a half a dozen auctioneers and we’ve got 16 members of our support staff and we followed several niches, you know, throughout the company – throughout the evolution of the company. We have some things that we don’t sell anymore. Things we’re active in right now are the toy market, the petroliana market – the signs and the gas pumps, gas globes – we do a tremendous amount of business with antique tractors and actually do that world wide. Lately we’ve been getting into intellectual property, selling existing business as on going entities, and some commercial liquidations and of course real estate with the focus on farmland.

Aumann Auctions is one of many members of the MarkNet Alliance. You were involved, I believe, in the creation of that franchise. What is MarkNet Alliance and why did you build it?

Well, it’s legally a franchise, but frankly we operate more like a coop. kind of like the old farmers coop elevator, and it allows us to service national contracts, that we wouldn’t normally have a chance of service on an individual basis. That really creates a distribution network that we can use and it’s allowed many of us to really book some business and do some business that we wouldn’t normally have gotten a chance to do. It’s a best practices group. We share ideas and our resources and a lot of partnerships on different deals form. It’s a little hard to describe in just a few minutes, but it’s been a fantastic experience and we’ve got a really, really great group of guys that are in it and I really look forward anything that I do with MarkNet.

I was teaching the ATS course this last November in Baltimore and we were demonstrating different website technologies when incidentally went to your website and was demonstrating that, among others, when I discovered your Streamline Bid system. What is that and what does that do for you that other existing products do not?

Well, it’s actually it’s an online bidding system like many of them that are out there. The only difference is that it’s integrated into a piece of backend software. So it’s also integrated in the project management and task list and managerial over sight. It’s a piece of a much larger piece of software that serves a function of live capturing and conducting oline auctions.

We delayed the recording of this episode by a few days because you had this big auction that you mentioned earlier a couple of days ago that you’ve been working on for a while. Tell me a little bit about the propriety and kind of how you handled the event and how it went.

Well, actually I have to give MarkNet a part of the credit for this deal because it certainly helped us win the contract, at least that’s what the sellers told us. It was a project of selling an estate and was 3900 acres, almost 4000, and it was all high quality, highly productive farmland, over 99% tilable, and it was over 1600 acres that was contiguous which is very unusual in our part of the world. I know you get out in your country, Aaron, out in Kansas it’s not so unusual, but whenever the farms back here – there’s a lot of farms broken up in forties, eighties and in 160s, so to get 1600 acres contiguous is a pretty big feat. We broke the farm up into 43 different tracks and offered it in a multi-parcel method. The auction took just a little over 6 hours and it brought 24 million dollars. So it was a great day.

I assume you had some help from your MarkNet partners in the actual conducting of that auction – or was it handled exclusively with Aumann Auction staff?

Well, we had all of our staff there, but there were also a lot of MarkNet members that came in and worked the floor. I’ve gotta tell you that I had the likes of Troy Crowe and Bryce Hansen and Brian Beckort and J.J. Dower and Chris Pracht, Joe Burns. I had a team on the floor. As you know on the multiparcel method sale, those floor guys are the ones that make the money, and explain the process and the bidding methods to those bidders and it was a sight to see. It really was, ’cause I mean those guys were just all all-stars and it came off very smoothly. I gotta tell you, and it’s not just because I did the project, but I don’t think we left a dime on the table.

Wow. That was actually the term I was gonna use in describing that crew of auctioneer you just named was all-stars. It sounds like a great team that anybody would be pretty lucky to have on site at an event. I think I’ve mentioned it before, but I don’t know for certain that I’ve covered it or that I’ve discussed it a whole lot with any of my guests up to this point. Would you, if you wouldn’t mind, briefly kind of describe what the multipar auction method is, how it works and what kind of software, if any, you used for this event?

The method is actually, in my opinion, the absolute fairest way to sell a piece of real estate because it allows the small tract buyer to bid at the same time with a large tract buyer by allowing the auction to proceed by the cumulative total, not by the individual track price. So in other words, three small tract buyers, the total of the bids for three small tract buyers, as long as they exceed the bid of the large tract buyer, then that’s how the propriety sells. So it gives the bidder the freedom to put together any combination of tracts he wants to put together. So it sounds a little confusing when you see it. I always tell people that the best way to understand it is to just place a bid. You start to understand the process really quickly then.

So did your propriety sell – how many buyers were winners on your propriety and was it broken up or was is pretty big chunks that were bought and how long did the auction take?

Auction took six hours and we actually had 10 buyers, although one of the buyers was a consortium of farmers that elected to bid collectively. So that was the largest bid up on the board which was around $15.5 million and that was about 2,400 acres and 2,400 acres ended up being divided, I think, 16 times, maybe, something like that. So there were 16 people in that consortium.

What technology tools did you use during the sale and in a normal course of multi-par?

Of course we used a piece of multipar software that we’ve modified a little and came off well. Probably the neatest thing we did that we got the most comments on was we really made it a multimedia event; we had a lot of screens. We had video coverage throughout the room and of course we had alternate screens between different bid boards so people can get any kind of information they wanted at any time. It really came off well; it looked like a multiplex theater.

Well certainly congratulations on it, I heard nothing but good things both from you and from other people around you that I’ve talked to since you conducted the event. It sounds like it was done very well and very professionally. You are based there in Nokomis Illinois, a bustling metropolis of a couple thousand people.

Actually downtown Nokomis

Downtown Nokomis. Little smoggier down there than it is elsewhere?

That’s right, that’s right. I mean I just wanted to draw that distinction.

Well, there were you are, about an hour and a half I think northeast of Saint Louis, as an auctioneer of some more specialty kinds of items – you mentioned the petroliana and the toy market and the antique tractor market – what are some ways you’ve overcome the problems posed by geography using technology or other means?

The remainder of this episode will soon be posted.

Auction Podcast

The Auction Podcast has reached its first milestone. We’ve recently rocketed past 1000 listens to the series. Indeed, according to WordPress plugin Podpress, each of the first five episodes has over 100 listens.

When we first started the podcast, the goal was a weekly release. We have some exciting plans for the podcast series in 2009, but in order to focus on the quality of episodes and guests we’re going to step back to a monthly or semi-monthly release schedule.

We’d like to continue to cater this podcast to the listeners. If you have suggestions for topics or guests, or if you are interested in being a guest, please let us know by visiting the feedback page and leaving us a message.

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Seasonality is the curse of all auctioneers. Even auctioneers in roughly the same geographic area can have consistent yearly downturns during several months each year. The goal is to manage those downturns so that cash flow remains as steady as possible.

One tempting solution used by many auctioneers is to hold events on or near holidays and market them as a special opportunity. I’ve been involved with auctions on labor day and memorial day, though I’ve always questioned whether our crowd might have been better had we held the auction during the week rather than on a weekend where many consumers have plans centered on relaxation and recreation rather than shopping.

Pre-auction only Internet bidding mitigates the importance of scheduling an event around the varying schedules of expected auction participants and Internet only bidding eliminates it. However, I’ve seen a few auctioneers holding auctions without Internet bidding of any kind on this coming Black Friday.

It’s my guess that auctions of items that are gift items or personal items – furniture, electronics, appliances, antiques – may come up short in the holiday months with the stiff competition with retail stores eager to make the sale at all costs. Commercial assets should hold strong, as business decisions are usually more immune to the impulse-purchase-affected, constantly-fluctuating disposable cash-on-hand levels associated with gift shopping.

I think the best thing an auctioneer can do is to save the gift items from the live crowd on Black Friday and, instead, hold an Internet only auction on Cyber Monday when everyone is going to be looking to the Internet for the remaining gifts that they need to complete their holiday portfolio.

Do you believe holding auctions on or around holidays improves attendance? Are people willing to spend more at auction during the holiday shopping season? How can you effectively compete against the retail establishment on the one day of the year when they take no prisoners? Let us know in the comments.

If you’re holding an auction on Black Friday and wish to advertise it using guerrilla marketing tactics, please leave a link to your auction in the comments.

In this episode, we’re going to cover the basics of Internet bidding including the different types of Internet bidding, or online bidding, and the different kinds of providers.

There are three main types of Internet bidding. Some Internet bidding providers allow some but not all of the types of auctions. I’ll cover some of the basics here, with future articles and podcasts building on these topics by discussing the combinations of the types of Internet bidding as well as going deeper into the benefits of certain types of auctions and providers.

Let’s begin by discussing the three main types of Internet bidding which are Internet only, pre-auction only Internet bidding, and real-time Internet bidding.

First, let’s address Internet only bidding. When the items sell based solely on the bids from the Internet, it’s an Internet only auction. Internet only auctions may have a bid caller and they may have a crowd, but when software is calculating the time remaining and the current and final bid prices, it’s an Internet only auction. Internet only bidding is sometimes referred to as an eBay-style or static auction, but those are horrific terms for it. Modern Internet only auctions have staggered endings and automatic extensions, more closely simulating a live auction. These modifications move the game so far away from eBay rules that there isn’t a legitimate comparison. The term static implies nothing changes. It’s very definition means fixed or motionless and the auction industry is doing itself an enormous disservice by using the word static to refer to this very active and exciting method of bidding. This method drastically lowers overhead, as well as provides a viable means of selling small groups of assets in multiple locations.

Second in our types of bidding is pre-auction bidding. Pre-auction bidding is the method of accepting Internet bids up to a point slightly before the auction begins to end and representing the Internet bids as absentee bids against the live crowd. This method offers the advantage of increased speed of the event as the auctioneer can see everyone who can possibly bid and doesn’t have to wait for an Internet bidder he can’t see. When the live crowd is done bidding he can sell the item and move on. It offers the convenience for buyers to place bids without having to attend the event or sit in front of a computer.

Finally, real-time bidding is probably the most common type of Internet bidding currently. The process involves an audio or perhaps video stream so that buyers can view the auction as it happens on their computers. They can place bids during the auction based on the audio and the display of the current bid price on their computers. This method has the advantage of allowing bids right up until the second the item closes, but forces users to wait in front of their computers until the items in which they’re interested sell. Many buyers no longer have that time available, or, when first seeing the auction, plan to sit in front of their computers during the event but forget by the time the auction starts to end.

Now let’s move on to the two classes of Internet bidding providers which are portal site solutions and integrated solutions.

When Internet bidding is offered but that bidding occurs on the website of a third party, that third party is a portal. That is, auctions from many auction firms are listed and the bidding is handled all within that site. This method offers the benefit of cross-promotion, where the customers driven to the site by one auctioneer may see the assets listed by another. The downside is that it makes brand-building very difficult and makes buyer retention next to impossible. This kind of solution is good for an auctioneer who needs results quickly. Examples of this kind of provider include Bidspotter, Proxibid, AuctionFLEX and NAA Live.

The concept of an integrated Internet bidding solution is less well-known in the industry. An integrated solution embeds the Internet bidding pages within the website of the auctioneer. The software may not reside physically on the auctioneers’ servers, but the website is built so that the buyer can’t tell the difference and never sees any logo or promotional materials of the provider. This method has the advantage of being excellent for brand building and buyer retention, but has the disadvantage of taking some time to build a buyer base. Examples of this kind of provider include JBS Software’s Maxanet and NextLot.

That’s it for episode six. I’m excited to announce that my friends Robert Mayo of Mayo Auction and Realty and Darron Meares of the Meares Auction Group have agreed to be the first two guests on the show, so look for those two interview episodes over the next two months.

You’ve been listening to the Auction Podcast from AuctioneerTech. If you have suggestions, questions or comments, or are interested in being a guest, please let me know by going to www.auctioneertech.com/feedback and leaving a message. You can also post public comments about this or any other episode, as well as find show transcripts, on the auction podcast page of auctioneertech.com.

Thank you for listening. Now go sell something.

Image via CrunchBase

eBay recently announced that in late October it will be eliminating checks and money orders as valid payment options for eBay sales. Remaining valid payment methods are as follows.

• PayPal, owned by eBay
• ProPay, partnered with eBay
• Credit or debit card payments direct to seller
• Payment upon pickup

There are several categories that are exempt from the payment restrictions, including vehicles, real estate, some machinery and the mature audiences category.

Two of the line-item questions on the FAQ are answered in a way that directly answers yes that eBay is trying to eliminate third-party checkout and no to the availability of checkout services offered by Google and Amazon. They say that they’ll work closely to integrate eBay Certified Solution Providers into their eBay checkout in 2009. I guess that Google and Amazon are not allowed into the club.

This change in the payment polices of the Internet’s biggest online auctioneer, a term eBay both needs and can’t accept, follows a fee-change-based depreciation of what used to be its core auction business in favor of more retail sales methods found in its Buy It Now and eBay Stores listings.

eBay can’t be called an auctioneer if it wants to maintain a lack of responsibility for the items sold and remain exempt from auction legislation. It’s biggest legal defense has been we’re not an auctioneer. Every news story, however, adds the tag to eBay like it would define an acronym. Even though it’s becoming more and more difficult to find auctions on eBay, and even though it’s becoming more and more expensive to sell items in a true auction method, the media still refers to eBay as an auctioneer rather than a storefront.

eBay has greatly affected the auction industry. There are auctioneers who were devastated by it and auctioneers who were built by it. Many people falsely believed that because they sold items on eBay they were auctioneers.

eBay has brought the term auction into the forefront of people’s consciousness. This rebirth is good and bad. While the auction method of marketing is now more widely known and understood, it’s also more frequently assumed that when you say auction you mean an eBay auction. The frequency of this assumption is diminishing, but auctioneers have a long way to go to teach the public that there are many other types and methods of auctions than what can be found at ebay.com.

eBay has leveled the playing field. Where once some auctioneers had a solid market for certain antiques and collectibles, eBay stole their buyers away with the lure of sexier, cheaper, like-kind assets. Why wait for 30 minutes at an auction when you can log in and get the item for half what you would pay locally? The other side of the coin finds auctioneers who used to sell rarities for pennies to a small local crowd. The use of eBay’s massive buyer base – by either the auctioneer or the local crowd – skyrocketed their items from $10 lots to $1000 lots.

I’ve always hated eBay’s auctions. I hated the waiting. I used eBay on a regular basis a few years ago, and I would always select to filter for Buy It Now events because I wanted to enact a transaction and get the item. I didn’t want to have to worry about having to worry about it again later. In the same way customers can no longer afford to spend a day at a live auction, eBay is recognizing that for commodity assets, customers are no longer willing to wait to know if they’ve made a purchase or if they have to continue to shop.

As eBay swings more and more away from an auction marketplace and towards an ecommerce storefront model, the aspects that differentiate it from services like Amazon and Google Product Search disappear. eBay has already begun to lose both its dominance and its extraordinary income. As it does, it will look for ways to capture more of the transaction costs. What is the first and most logical way to capture non-commission-based revenue? Take a percentage of the payment. Forcing users to use PayPal means they get to dip from the payment as well as the sale.

Now I’m going to go to eBay and look for my Halloween costume among their Buy It Now listings.

I’m typing away on my Apple slim aluminum keyboard. It’s the one I poured nearly a full cup of coffee into a couple weeks ago. I dried it, wet it, dried it again and when it wouldn’t work I’d left it for dead. A week passed and I tried it one more time and it’s been working well ever since. I guess I bought a pair to have a spare. With all the damn computers around here, I guess it will get plenty of use.

Everex Cloudbook CE1200V, photo by Aaron Traffas

I sold my Cloudbook at last Thursday’s auction. I couldn’t ever get the wireless to work as well as I wanted, though it seems I’m not the only one. The graphics always seemed weak, though VIA just released an open source driver for it.

I’m currently rocking the ASUS EeePC 900 netbook. It’s quite possibly the finest piece of equipment on which I’ve ever laid my hands. I turned it on long enough to hit restart on the Knoppix distribution of Linux so that I could install Ubuntu. I had good luck with Ubuntu-eee as opposed to Eee-Ubuntu. Everything worked pretty much right away. I had to load a different kernel to get the microphone working so I could play with Skype with my girlfriend. I got her an Acer Aspire One netbook as an early birthday present. It’s slightly bigger than my Eee, but the difference in the keyboard size is pretty huge. It also runs Windows XP, which is pretty much a must for her iPod Touch. It was also crazy-cheap, weighing in at $349 at Best Buy.

Both the Acer Aspire One and the Asus EeePC come with either Windows or Linux. A Windows netbook makes a great and very affordable terminal for running stand-alone clerking software at auctions that aren’t at your facility. A Linux netbook is an even more affordible way to make a statement about how cool you are and how much fun you want to have with your computing experience.

Dell has hinted at releasing a netbook, similar to their Inspiron Mini 9, with Windows and built-in 3G, which would be a great solution for web-based clerking software. Immagine being able to clerk an auction wirelessly without having to setup a wireless network.