Last week’s post dealt with grokking that there is no functional difference between a minimum or starting bid and a reserve on an item. A post last month pointed out that it’s bad to try to be sneaky when protecting a reserve on an item and that it’s much better to be upfront with the conditions of sale than to try to hide the house’s bidding practices from the other bidders.

Today, we’re going to examine bidding histories, another method of fostering trust between an auctioneer and bidders with regards to Internet bidding. Here’s an example of what we mean.

Bidding history showing the start of bidding to be $1

Internet bidding sites should absolutely allow a prospective bidder to view the previous bids placed on an item. Knowing when these bids were placed and the increments at which they were placed allows the bidder to know what the starting bid was. Knowing who is bidding – the number or username, not the identity – allows the bidder to spot perceived trends in bidding activity. This knowledge prevents an auctioneer or seller from starting the bidding at a low price and then immediately bidding to create an artificial minimum bid for the next real bidder.

We don’t have space to display all 63 bids in the example above, but here’s the finale that shows how the item – which started at $1 above – ended up selling for over $10,000.

Final bidding history showing the final price of an item

Another benefit of making bidding histories available to bidders is that the bid count can be shown in the catalog view. The number of bids shows the level of interest in items and sellers and bidders may be interested to know which items are the most active in an event.

In a live auction, any attending bidder can have access to the bidding history for an item simply by paying attention to the auctioneer. The number of bids and the speed at which they are received arguably builds excitement and can arguably increase the final sales price.

There aren’t any secrets to Internet bidding. Holding a successful auction is more like cooking, where many ingredients are important but different chefs may use different portions at different times to create uniqueness. However, there are ingredients that, if left out, can ruin the project. Internet bidding systems should make items’ bidding histories available to prospective bidders because these histories are a very important ingredient to a successful Internet auction event.

In a March episode of the Auction Podcast, we posited that it is wise to have a policy of starting every item at $10 for Internet bidding.

If your minimum bid at a live auction is $10, set the minimum bid for the Internet bidding to be $10. For every item. For every category from coins to real estate. For every auction. Every time.

The logic, of course, is that it looks suspicious to have starting bids that are anything other than the lowest bid an auctioneer would take at a live auction. If your lowest bid is $5, we reasoned, you should start the Internet bidding at that price since the bidding activity generated by a real auction will quickly advance the bidding to more reasonable prices.

Publications shouldn't try to be auctioneers

In our summer post called Publications shouldn’t try to be auctioneers, we mentioned in passing that Sandhills Publishing – the folks behind TractorHouse, MachineryTrader, TruckPaper and others – completely missed the concept that there isn’t a difference between a high opening bid and a reserve on assets.

Today, we’re going to get right down to the concept that a starting Internet bid is a reserve, plain and simple.

A reserve price is a price below which the seller won’t complete the transaction. An opening bid is a price below which the auctioneer won’t accept bids. A starting Internet bid is a price, entered into bidding software by the auctioneer, that prevents the bidding software from accepting a bid lesser than the starting Internet bid. Some times the software refers to the starting Internet bid as an opening bid, since the two are functionally the same.

If an item is selling at auction, the auctioneer must accept a bid in order to sell it. If the reserve is the lowest price a seller will accept, then all bids below this price are invalid. Because the auctioneer must receive bids to present them to the seller for acceptance, if an opening bid is used then all bids below the opening bid are invalid since the bidders have no way to submit them. Whether the bids are invalid because the seller won’t complete the transaction or the auctioneer won’t accept them doesn’t change the functional equivalence of an opening bid and a reserve from the perspective of the transaction. If it walks like a duck…

So if all opening bids are reserves, are all reserves opening bids? Many times auctioneers allow items with reserves to feature bidding activity below the reserve in hopes that the price will advance beyond the reserve, allowing the transaction to occur. This practice seems a little fundamentally disingenuous to us, but it is quite common in the industry. While many auctioneers are honest and upfront about the reserve status of the items they’re selling, we mentioned in September that there are still auctioneers who try to be sneaky and use house numbers or fictitious bidding accounts to protect the reserves on the items unbeknownst to the bidders. This practice is absolutely not what we’re advocating.

What we are advocating is that auctioneers understand that a minimum bid is functionally no different from a reserve. A starting bid and a reserve both invalidate all lesser bids. A $100 starting bid on a $10,000 vehicle means that the vehicle has a $100 reserve. Such an auction could not honestly and legitimately be referred to or advertised as absolute or without reserve.

We’ve been following the new features and website from Proxibid for the last few weeks. Today they’ve launched the new website and announced that you can start reserving the embedded bidding solution. Here’s the release.

Omaha, NE – September 22, 2009 – Proxibid, the world’s largest provider of live auction webcasting services, today announced that the Company will now offer embedded solutions as part of its online auction service offering. Beginning today, auctioneers can reserve their embedded solution, which will be customized to fit seamlessly into the Web sites of auction companies that request this value-added service.

“An embedded bidding solution from Proxibid is a feature for which auctioneers have long been asking. Allowing bidders to participate directly on an auctioneer’s website creates a more seamless user experience that is a win for both the auctioneers and their customers,” said Aaron Traffas, editor of AuctioneerTech.

Proxibid’s embedded solution allows 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. The embedded solution fits seamlessly into the auctioneer’s Web site, enabling auctioneers to offer a full-service online auction experience to bidders from across the globe. Proxibid’s embedded solution enables auctioneers to develop a more strategic relationship with the bidder similar to the relationship that is created when the bidder is sitting in the live audience.

“Proxibid’s embedded solution is exactly what the market has been asking for,” said auctioneer, John  Schultz.  “The business implications of this are huge. Seamless integration means bidders can participate in an auction without leaving our Web sites, allowing us to create better relationships with our online bidders, while also significantly enhancing the services available to our sellers.”

Proxibid’s embedded solution was developed using an in-line frame. The design is built to allow some customizations by auctioneers, to ensure Web site aesthetics are not compromised. For example, auctioneers will be able to choose the color scheme which best fits their Web site. The solution includes new features developed for Proxibid’s newly-designed Web site, which launched this morning, including the new multi-bid mode that allows bidders to place pre-bids and online-only bids for multiple items in the same auction catalog at the same time.

“Proxibid is committed to providing our auction house customers with the best technology solutions in the industry,” said Bruce Hoberman, Proxibid’s CEO. “Our embedded solution is the next logical step in bringing auctioneers online in a manner that allows them to feel as connected to the bidder in the virtual world as they do when that bidder is sitting in the live audience, and vice verse.”

image from liveauctioneers.com/blackberry

In July, Internet bidding provider LiveAuctioneers announced the release of an iPhone application that allows its users to view auction inventories as well as to participate in auctions by placing pre-auction Internet bids.

Yesterday, LiveAuctioneers announced the release of an application for BlackBerry devices that has similar functionality but, unlike the iPhone application, is free to download and use.

While some other auctioneers attempt to deliver their bidding pages  so that they render easily in mobile browsers, LiveAuctioneers is instead developing applications that run natively on the devices. This approach has the benefit of creating a more controlled user experience for the supported devices. Unfortunately, it only works for supported devices. We still haven’t seen any provider release an application for Windows Mobile or the Palm Pre, though we’re guessing someone’s working on it.

Here’s the BlackBerry release.

NEW YORK – Following closely on the heels of its revolutionary iPhone application (“app”) with auction-bidding capability, LiveAuctioneers App Technologies has announced the release of a similar product for Blackberry devices. The new Blackberry “app” has the capability to connect users with catalogs from any auction house utilizing LiveAuctioneers.com’s Internet-bidding services. Additionally, it is the first Blackberry app to enable absentee bidding through LiveAuctioneers. It also includes an auction archive search function for accessing prices achieved in past sales.

The app is compatible with all current Blackberry models – Bold, Storm, Curve, Pearl Tour and 8800 series – and supports all major Blackberry service providers.

“We fully expect that Blackberry users within the fine art and antiques community will embrace this innovative technology, which includes immediate access to any auction catalog listed on LiveAuctioneers and the ability to leave absentee bids through our Secure Bidder Network (SBN),” said LiveAuctioneers LLC’s CEO Julian R. Ellison “With SBN functionality, which is unique to LiveAuctioneers, your absentee bid is kept private and unknown to anyone until auction day, when it goes direct to the auction house.”

Ellison said he placed top-priority status on the development of the iPhone and Blackberry apps because he wanted both to be finalized and available for download in advance of the fall auction season.

“From conversations we’ve had with auctioneers who use our services, we believe the next quarter may be the busiest ever for LiveAuctioneers,” Ellison said. “Some very exciting sales are going to be announced, and now with the addition of our new apps, auction houses will see bids coming in from all directions. There’s no reason why anyone should miss out on bidding now that our app technology is so widely available.”

The LiveAuctioneers app for Blackberry devices is free of charge and can be downloaded by visiting http://www.liveauctioneers.com/Blackberry.

Have you tried either of the mobile bidding applications from LiveAuctioneers? Let us know it worked in the comments.

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.

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.

Our post on Wednesday described an announcement by Proxibid of their forthcoming embedding bidding service. This service will allow auctioneers to seamlessly embed Proxibid’s systems into the auctioneers’ web pages. In Wednesday’s post, we posed five questions we felt were important to ask of Proxibid and other providers who are looking to offer this type of service. Here’s a recap of the questions we posed.

• Pricing structure – will it cost more to use the embedded solution?
• Simultaneous exposure – will inventories exist on the portal and the auctioneers’ websites simultaneously?
• Branding – will the bidding experience be non-branded or simply embedded?
• Difficulty – how easy will it be for auctioneers to integrate the bidding system within websites?
• Customer pooling – what will the bidder registration process look like and how will buyer information be shared?

We were contacted by Tom Clark, Proxibid’s Chief Operating Officer, and in a phone call this morning he answered these questions.

Pricing structure
Proxibid will not alter its pricing structure for auctioneers who elect to use embedded bidding. “Everybody gets it,” said Clark.

Simultaneous exposure
Items listed on auctioneers’ websites will also benefit from the exposure on proxibid.com. This simultaneous exposure means an auctioneer’s bidders can place bids on xyzauction.com and Proxibid’s existing customer base can place bids on proxibid.com.

Branding and customer pooling
Clark made it clear that Proxibid’s goal was to provide a wholesale product that could be seamlessly integrated into an auctioneer’s website. The Proxibid logos, headers and footers will be removed, providing a user experience that feels congruent with the auctioneer’s site. Clark said that the goal was to remove the Proxibid branding from everywhere except where it would be required for legal reasons, such as upon registration where users must agree to Proxibid’s terms and conditions. Any existing Proxibid bidder will be able to participate in embedded bidding after meeting the requirements for the event set by the auctioneer without having to create a new account. Proxibid will be exploring allowing the ability for an auctioneer to further customize the pages with CSS and perhaps embed a logo into the bidding application, but those advanced customization options my not be available until future releases.

Difficulty
Clark said that Proxibid’s goal has been and will continue to be to “provide solutions that are economically viable and make sense.” With this regard, it is important that the embedded service be usable by the greatest number of Proxibid’s auctioneer clients. By using frames to include the inventory listings, anyone with a rudimentary knowledge of website design will be able to easily utilize the service and users won’t be confused by changing domain names.

All in all, we think these are the answers auctioneers were hoping for and we look forward to reviewing this service, as well as those from other providers, in the months ahead.

proxibid

One of the most popular feature requests made of Internet bidding providers is that they offer a non-branded, embedded solution for auctioneers who want the ability to host bidding on their sites rather than having to push people to a third-party website.

Today, in an email to their auctioneer clients, Proxibid announced that they were working on such a solution and that it would be available soon. Here’s the official announcement.

Just when you thought it wasn’t possible for the world’s most popular live auction webcasting service to get any better…stay tuned for exciting news and information about Proxibid’s embedded online auction solution.  Our embedded solution will enable you to offer online bidding seamlessly on your Web site, making it easier than ever to provide your bidders with a full-service online auction experience.

We’re working overtime to ensure our embedded solution provides you with the leading-edge technology you’ve come to expect from Proxibid, and we’ll be ready to share the details in early September!

Allowing auctioneers the ability to completely brand their users’ experiences will be a very powerful tool. Jeff Johnstonbaugh announced in the most recent Auction Podcast that BidSpotter is working on a similar solution, and its realistic to expect that the other players in this space are working frantically on the same type of offering.

Competition is good, but it’s not quite accurate to say that the first one there wins. There are a lot of questions that will matter a great deal that have yet to be answered.

• Pricing structure – will it cost more to use the embedded solution?
• Simultaneous exposure – will inventories exist on the portal and the auctioneers’ websites simultaneously?
• Branding – will the bidding experience be non-branded or simply embedded?
• Difficulty – how easy will it be for auctioneers to integrate the bidding system within websites?
• Customer pooling – what will the bidder registration process look like and how will buyer information be shared?

This move will be a win-win for both Proxibid and their customers – both auctioneers and bidders – regardless of the details. We’re very excited about this announcement, and we look forward to learning more about the details of this next evolution in real-time Internet bidding methods.

Real-time Internet bidding is a process that allows an auctioneer to accept Internet bids during an auction. A bidder downloads client software, usually either Flash- or Java-based, and can hear the auctioneer and place bids until each individual item is declared sold. There are several prominent real-time bidding service providers competing in this space, each with its own software and feature set.

One of the important features of any real-time bidding provider is the way bids are accepted by the software. There are two ways bids can be handled and today we’re going to look at the good and the bad of each. The players in this discussion are the Internet bidder, the auctioneer, and the auction staff member who represents the Internet bids and conveys the auction action to the Internet bidder – known as the bid implementer. Also relevant is the client software used by the Internet bidder, and the auctioneer interface used by the bid implementer.

Automatic acceptance
Internet bids can be accepted automatically by the software. An Internet bidder places a bid and the software automatically updates the current price and winning bidder, with the expectation that the bid implementer will let the auctioneer know that the price has changed due to a placed bid.

Manual acceptance
With manual acceptance, the Internet bids wait in a queue until they’re specifically accepted by the bid implementer, presumably once the auctioneer has acknowledged the bid.

There are problems with both methods. With manual acceptance, the Internet bidders perceive a delay in the action or a problem with the software or auction staff when their bids aren’t immediately impacting the event. With automatic acceptance, an Internet bidder may believe he’s the current winning bidder because the software reflects this status, while in actuality the auctioneer is currently recognizing a live bidder at the same increment.

Automatic acceptance is better for newer auctioneers with less-established buyer bases. Because their starting pre-auction bids are lower, perhaps less than 50% of the final sales price, the chances are higher that a couple Internet bidders will create a bidding war between them that is faster than the auctioneer and bid implementer can accurately represent. Automatic acceptance removes the human limitation in the speed of the bidding. Internet bidders are able to immediately see the results of their bids and they feel like they are taking part directly in the auction. The problem for more experienced auctioneers with larger buyer bases and more realistic starting bids is that the real-time Internet bids are both fewer and closer to the final sales price, increasing the chance that an auctioneer will take a bid from the crowd at the same time an Internet bidder is placing a bid. The resulting price collision could result in legal action being taken against the auctioneer, especially if the item is sold before resolving the collision.

Manual acceptance is perhaps a more accurate representation of a live auction. At a live auction, many ringpersons can signal to the auctioneer that a bid has been placed, but only the auctioneer decides which one individual bid is accepted at any increment. In the case of bid collisions, only the bid recognized by the auctioneer is legally valid. The problem with manual acceptance for the auctioneer is that it requires much more vigilance on the part of the auction staff. Internet bidders can only bid as fast as the bid implementer can accept bids, and an inexperienced auctioneer or bid implementer may have a hard time running the system with such a high level of maintenance. The problem with manual acceptance for the bidder, as mentioned earlier, is that it’s easy to perceive a problem with the software or the auction system as a whole. When bids aren’t immediately accepted, the frustration can lead to complaints or even bidders who refuse to participate in auctions conducted by the auctioneer or the bidding platform.

We’re currently in a time that could be described as the wild west of Internet bidding. Real-time Internet bidding is but one of three ways auctioneers accept Internet bids. There are several providers who specialize in this service, and they all continue to innovate and iterate. It’s our belief that there is room for all kinds of bidding. As the industry and products mature, we’ll eventually see some standardized practices fall into place by themselves, unless patents or lawsuits force faster, more immediate changes to real-time Internet bidding.

You’re listening to the AuctioneerTech Auction Podcast. Today is Thursday, 26 March, 2008. auctioneertech.com – Technology, auctions and auctioneers – auction tech for the auction industry

Hello and welcome to the seventeenth episode of the AuctioneerTech Auction Podcast, my name is Aaron Traffas. In this episode, we’re going to discuss starting bids for Internet bidding and why you shouldn’t ever start the bid above your lowest acceptable bid at a live auction. This is a common practice, so I encourage your feedback and discussion of this possibly controversial issue.

Most bid callers in the act of selling an item begin by asking the crowd for a bid at a price that is higher than or equal to the projected sales price. When they don’t receive a bid, and they rarely do at this initially requested price, they reduce the price until someone makes an initial bid. The price goes up from that point until nobody else bids, at which time the auctioneer declares the item to be sold.

Most bid callers have a low bid below which they won’t ask for another bid. This price is usually between $1 and $25 for personal property, depending on the auctioneer and the type of property in the auction. It’s in noone’s best interests to cry for bids below such a threshold, and in the case of items without pre-auction bids, the auctioneer has the option to put an item without bids together with another item without bids in an effort to sell the items.

Most, if not all, Internet bidding platforms allow the auctioneer to specify a starting bid price. When the item is first listed, no bids below this starting price are allowed.

In the case of a successful Internet bidding system, few, if any, items in an event should start without pre-auction bids. The only way to achieve such a system is to ensure that the starting bid is equal to the lowest bid the bid caller will take at the live auction. Why would an auctioneer want to set a start price that was anything other than the lowest bid he would accept?

In the case of an auction with reserves, I understand the logic behind setting this starting or minimum bid price equal to the reserve. In the case of an auction without reserve, however, this practice makes no sense.

If your minimum bid at a live auction is $10, set the minimum bid for the Internet bidding to be $10. For every item. For every category from coins to real estate. For every auction. Every time.

Low starting bids encourage participation. They encourage speculation. Bids are placed by bidders who realize that an item is well under-valued and who have no intention of purchasing an item, only to perhaps do further research and maybe bid again when they get the email hours or days later that they’ve been outbid.

What does setting consistent and low initial starting bids hurt? Absolutely nothing. The auctioneer gets more bids, and if those bids aren’t significant in relation to the value of an item, the crowd will initiate the bidding just as if there were no Internet bids and nothing is lost. Bidders who started bidding at $10 on the John Deere combine may bid again at $100 and $1000 and tell the story to their neighbors who may bid at $10,000 and then again at $50,000. All of a sudden the $100,000 combine finally sells after 30 different bidders have placed bids. The huge increase in speculative bidding means more participants who get outbid notifications and come back to the website. Website traffic goes up and as the visibility increases, excitement about the event goes up.

What do arbitrary or varying initial starting bids hurt? They look like reserves, even if they aren’t. It’s much harder to convince a seller to sell an item absolute – which means with no minimum or reserve – if items without any bids require certain prices in existing listings. Fewer bids are received and the chances increase that an item won’t have a starting Internet bid when it is sold at the auction. The lack of consistency lends further credence to some customers’ mistrust of auctioneers. The combine with 30 different bidders in the above example only receives bids from five people willing to bid from $50,000 to the selling price of $100,000. Fewer stories are told and less excitement is created.

Take another example of an item with an expected sales price of $100. An auctioneer with a rule of thumb to set the starting bids to 60% of expected sales price sets the start bid to $60. A prospective bidder who would have bid up to $50 sees the item but can’t bid on it. No bids are received and at the live crowd the item sells for $40. While an argument can be made that the auctioneer should have made a better prediction, we say that the auctioneer should be in the business of finding value and not predicting it.

Auctioneers with varying starting Internet bids in an event are trying to add complexity where there should be simplicity. Why spend time figuring a starting bid of a percentage of the expected selling price when it’s advantageous to set every item at $10 and encourage more participation from more bidders? Even if bidders aren’t serious, it hurts nothing to enlist their help spreading word of an event to others who may be serious.

Remember, we’re not advocating setting the start bids lower than the price at which you would rather pass on items than ask for lower amounts at the risk of letting the crowd set the pace and tempo of an event. If your base bid is $5, set the starting bids there. If you pass on items at the auction when you can’t get a $25 bid, set the starting bid there.

That’s it for episode 17. Do you set arbitrary or varying starting bids? Why? Let us know in the comments. We have some exciting guests coming up over the next couple of months before Conference and Show, including Tom Clark from Proxibid; Walt Kolenda, also known as AuctionWally; Steve VanEerden from JBS Software; and NAA President Randy Wells.

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.

We mentioned how easy it was to create web forms with Google Docs back in November. Now, technology blog TechCrunch is running a story about a very interesting do-it-yourself project combining the ease of Google Doc form creation with the enormous prospective bidder pool of Craigslist to form a rudamentary Internet bidding system.

Craigslist doesn’t natively support auctions. It does, however, have a ton of regular visitors, most of whom are looking to buy something. Those of us auctioneers who realize this fact about Craigslist frequently advertise our auctions there. The subject of the Techcrunch story had a Macintosh G5 to sell. He created a Google Docs form that posted name, email address and price to a read-only spreadsheet that hid the email addresses from everyone but him. He said that the highest bid received by noon Pacific time would be the winner and linked to the form and the spreadsheet from his Craigslist ad listing the auction.

What do you think of consumers directly leveraging the Craigslist buyer base using the auction method of marketing? To read the whole story, complete with screen shots of the bidding form and the spreadsheet, visit techcrunch.com.

We start the new year with an obituary for eBay Live Auctions, not to be confused with eBay Live!, the eBay convention for buyers and sellers held regularly in cities around the country. As of the first of the year, the website ebayliveauctions.com now redirects to www.ebay.com.

eBay Live Auctions was the division of eBay that allowed live auctions to take some advantage of eBay’s enormous bidder pool. Through the use of authorized providers such as iCollector and Live Auctioneers, auctioneers could post inventories and accept real-time Internet bidding like many other providers, but with the help of eBay’s bidding community which is still very large.

The downsides to eBay Live Auctions  were many. eBay treated it like an unwanted stepchild by not allowing the items to be found by searches using the default search bar on eBay’s home page. The link to get to the live auctions always seemed buried and hard to access. The providers charged a percentage of each item sold to an Internet buyer in addition to a hefty setup fee per event.

Still, other Internet bidding providers charge a percentage of each item sold and eBay’s huge community still provided thousands of eyes on the live auction listings. The biggest problem was that eBay’s buyers are not auction buyers. While they may be much more familiar with Internet transactions than Joe Allbox, they balk at terms such as as is and buyer’s premium and simply don’t understand that there should be bigger punishments to not completing transactions than negative feedback. Unfortunately, eBay’s unwillingness to disclose personal information, to say nothing of credit card information, to the auctioneers it was attempting to serve made it very difficult to ensure buyer performance for transactions with eBay’s customers.

All in all, the death of eBay Live Auctions  will be good for the auction industry and eBay. eBay has been good for auctions, but eBay Live Auctions has blurred the lines between eBay’s style of auctions and the methods of Internet auctions practiced by auctioneers, causing bidders to not understand how real auctions work. As eBay rearranges its deck chairs after hitting the iceberg, eBay Live Auctions is one of many logical cost-cutting culls.

As for those companies who had business models built around eBay Live Auctions, it seems that they will continue to operate by attempting to build their own buyer base, a task that is not hard as their auctioneer-clients will advertise their portals while advertising their events.

Did you use eBay Live Auctions or one of the providers associated with the service? What are your plans? Will you continue with the provider or switch to a different solution?

Example of extended bidding caused by a bid submission in the last few minutes of an Internet only auction

We discussed back in September how Internet bidding has been referred to as eBay style or static bidding, and we’ve explained why those are bad descriptions for this type of bidding. Features like automatic extension and staggered ending make most modern Internet only auctions nothing like eBay and they certainly are exciting and dynamic enough to not come close to deserving to be called static. Now, a new twist has been released by Purple Wave, an auctioneer based in Manhattan, Kansas. This twist is grouped extension. Here’s the explanation from Purple Wave’s website.

Purple Wave is pleased to announce a new feature called grouped extension has been added to its industry-leading Internet auction platform….Occasionally, Purple Wave will group together similar assets in an Internet only auction and place them in a bidding extension group. Any bid within the last few minutes that causes an automatic extension of bidding on any one of the assets in that group will now automatically extend the bidding on ALL assets in that group. When no more bidding has occurred on any assets in a group for the specified time, then bidding on all assets in that group will close simultaneously.

“We continually look for ways to try to translate traditional auction concepts into the Internet auction world,” said Jerrod Westfahl, Purple Wave’s Executive Vice President of Business Affairs. “Our grouped extension feature does just that. It’s really all about creating aggressive bidding activity without creating unnecessary risk to the bidders. This feature is a win for both buyers and sellers. Buyers don’t miss out on what might be an otherwise good value. It allows auctioneers to add value for sellers by exercising their professional judgment in deciding how to create the groups.”

This new feature allows the Internet only auction to more closely replicate a choice sale at a live auction. When items are sold as a choice at a traditional auction, the winning bidder gets to select among a group of items at the winning bid price, taking one or multiple items with each item costing the high bid price. The auctioneer then sells the remaining items to other bidders, usually in the same way. While it’s true that some real-time Internet bidding platforms have options to facilitate choice sales, we don’t know of any companies outside of Purple Wave that yet facilitate choice bidding for Internet only events.

grouped extension example - the group association is listed at the end of the description

Take for example the equipment auction for which Purple Wave will be unveiling the new grouped extension feature. There are three 2004 John Deere combines. Let’s suppose for this example that there may be one that is more desirable than the others. Let’s take the example of a traditional Internet only auction where the one with the best current bid is listed first and the other two are listed directly after it in descending order of current bid. As the bidding begins to end, more bidders are bidding on the first item, the one for this example we’ve assumed is more desirable. This bidding activity causes the item to extend for a greater period of time than the two items following it. When the second-highest bidder realizes that he cannot afford to bid again on the first item and decides to try to bid on one of the other similar items, he cannot place more bids because the other items have closed at lower prices than he was willing to pay. Since he wasn’t willing to pay those prices on the other items until he was absolutely sure he wasn’t able to purchase the first item, he was unable to purchase any combine at the auction.

With grouped extension, any item in a group receiving a bid in the last few minutes will keep all of the items in the group from closing for a period of time. This new method solves the problem above by allowing the second-highest bidder on the first item to bid strongly on that item while knowing that he has the option to bid on either of the other two items should the price on his preferred item exceed that amount which he is willing to pay.

This grouped extension system is an interesting twist on the way items are offered at Internet only auctions. Do you know of another company who offers this kind of service? What are some other twists on Internet only auctions that haven’t yet been discussed here? Let us know in the comments.

As a matter of disclosure, Purple Wave is this author‘s employer and this author was directly involved in the development of this new tool.

You’re listening to the AuctioneerTech Auction Podcast. Today is Saturday, 6 December, 2008. auctioneertech.com – Technology, auctions and auctioneers – auction tech for the auction industry

Hello and welcome to the thirteenth episode of the AuctioneerTech Auction Podcast, my name is Aaron Traffas. In this episode, we’re going to discuss Internet and absentee bids, agency, fiduciary obligations, and how best to represent the client when accepting absentee bids. I’ve witnessed several heated discussions among auctioneers concerning the various aspects of this speciously complicated issue. I intend to show that the only way to consistently obtain higher prices for all an auctioneer’s sellers is to execute absentee bids competitively.

One of the first lessons an auctioneer learns is that his clients the seller. For the purposes of this discussion we’ll assume that auctioneer means the bid caller, the sales crew, and any other employee or agent of the auction company. It is the seller who has hired the auctioneer to work on her behalf, meaning that the auctioneer is an agent of the seller. This definition of agency carries with it the obligation of the auctioneer to act in the best interests of the seller. These best interests, in most cases, involve obtaining the highest sale price possible for an asset. This goal isn’t always the case, as sometimes the best interests of the seller could involve a lower price but grant the seller fewer responsibilities or legal liabilities regarding the transaction. For the purposes of this discussion, however, we’ll assume that the fiduciary obligation carried by the auctioneer for the seller implies that the auctioneer wants to get the highest price for the client.

For a traditional auction, the relationships and roles are black and white. The auctioneer, acting as an agent of the seller, finds the highest and best sales price available from the bidder pool in front of him and executes a transaction between the highest bidder and the seller at that price.

An absentee bid is a bid left from a bidder with the intent for that bid to be executed by the auctioneer at a time when the bidder isn’t present. It doesn’t matter if an absentee bid is delivered verbally, on paper or over the Internet, it’s still an absentee bid. This absentee bid can be executed one of two ways, the first of which is direct execution.

When a bid is executed directly, the auctioneer immediately begins the bidding at that price. Similar to a hand being raised at an auction, the bid is implemented one time only and the auctioneer doesn’t have knowledge of the bidders possible intent to bid more. This method offers little if any departure from the example described earlier where the auctioneer simply accepts bids from bidders and maintains his position as exclusively an agent of the seller.

The second way that bids can be implemented is by competitive execution. With competitive execution, an absentee bid is treated as a maximum bid with the assumption that the auctioneer will bid only as much as necessary for the bidder to win the bid up to but not exceeding that maximum bid. In this case, the auctioneer must actually make decisions on behalf of the bidder. For the auctioneer – and remember we’re including all staff and associates of the auction firm – to act on behalf of both a bidder and a seller at the same time results in a condition of dual agency.

Dual agency can be a bad for an auctioneer, as an absentee bid executed competitively could result in a sales price less than that maximum absentee bid. A seller could correctly argue that the auctioneer failed to satisfy his fiduciary obligation to her because he had information that a bidder was willing to pay more than the final sales price of the transaction. In many, if not all cases, the law is on the seller’s side in this case.

So if dual agency is bad, why wouldn’t an auctioneer simply execute absentee bids directly to avoid assuming that position? Many do. The downside to the practice of direct execution is that it discourages bidding. A bidder doesn’t want to pay any more than necessary for an item. If an auctioneer’s policy is to directly execute the bids, the bidder has an incentive to bid as low as possible because he doesn’t want to risk paying any more than necessary to win an item.

If an auctioneer’s policy is to execute bids competitively, a bidder no longer has an incentive to bid low. A bidder can bid higher, resting assured that the auctioneer will bid just enough to win the item, just as the bidder would do were he at the auction himself.

It seems clear, then, that direct execution is in the interests of the seller and competitive execution is in the interests of the buyer. Since the auctioneer works for the seller, and since there is a possible legal issue with preventing the dual agency found with competitive execution, why don’t all auctioneers execute bids directly?

Within the scope of one item for one seller, the choice is clear and the auctioneer has the obligation to obtain the highest price possible. Suppose, however, that the seller has 10 items. A competitive bidding policy encourages several absentee bids to be placed on each item. While some of the items may sell for less than the maximum bids, the aggregate sum of all the items is more because of the increased bidding activity. When the scope is expanded beyond one item for one seller to include all the items from one or more sellers in an auction, it is clear that competitive bidding encourages participation and more, higher absentee bids, eventually resulting in a higher aggregate sales price for the seller.

What about the legal argument? It is important to precisely define how the bids will be executed in both the contract with the seller and on the absentee bid form or website terms in the case of Internet bids. With proper disclosure, the legal issues regarding dual agency are negated. Any reasonable seller will understand that the increased bidding activity generated by a competitive execution of absentee bids will result in higher prices, even if there is a possibility that the item will sell for less than the maximum bid.

I sold a truck at auction a few months ago. The absentee bid was $10,000. The final sales price was $7,200. I have no doubt that without the policy of competitive absentee bidding, the $10,000 bid would never have been left. I also believe that the final sales price would have been hundreds if not thousands of dollars lower without the absentee bidding activity.

I routinely work auctions with hundreds if not thousands of absentee bids for the items in the auction. That bidding activity often results in sales of greater than 50% of the items to absentee buyers. If the bids were executed directly, the absentee bidding activity would plummet, and our sellers would receive lower prices.

That’s it for episode 13. I hope I’ve successfully made the case that only by also serving the interests of the buyers can the interests of the seller best be served. If you disagree with me, as I’m sure several if not many auctioneers will, please leave a comment or feedback on the website.

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 http://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.

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.

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.

Types of Internet bidding

Internet only
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.

Pre-auction Internet 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.

Real-time Internet bidding
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 the computer during the event but forget by the time the auction starts to end.

Classes of Internet bidding providers

Portal site 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 all handled 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 of another. The downside is that it makes brand-building very difficult and makes buyer retention next to impossible. This kind of solution is very good for an auctioneer who needs results quickly. Examples of this kind of provider include Proxibid, Bidspotter, AuctionFLEX, and NAA Live.

Integrated solutions
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 building a brand 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.

Do you use a provider other than those listed above? Let me know in the comments so I can learn about them and reference them in the future.

You’re listening to the AuctioneerTech Auction Podcast for the week of 8 September 2008.
AuctioneerTech – Technology, auctions and auctioneers – auction tech for the auction industry

Hello and welcome to the second episode of the AuctioneerTech Auction Podcast, a primer for advertising Internet only auctions. My name is Aaron Traffas.

I received a question a couple of weeks ago from a friend and fellow auctioneer who was looking at the possibility of conducting some Internet only auctions. He asked me about places where he might advertise such an event. I realized that many auctioneers who have no experience with Internet only auctions may not feel comfortable building an advertising campaign. Many times, the advertising strategy for an Internet only auction should be the same as a campaign for an auction with pre-auction Internet bidding or simply a live auction with no Internet participation.

The biggest misconception about Internet only auctions is that an item will sell to someone other than the person to whom it would have sold had you used a live auction. It very well may, but if you move completely from a local advertising campaign to a completely Internet-based advertising campaign, you’re bound to see a big drop in participation. Using the Internet to take bids doesn’t mean that the item will sell to Guam or to Kansas. The Internet is simply an easier way for customers to participate in the auction process than the act of driving and spending time at a live auction, time that customers many times no longer have.

If the assets you’re selling are of general use, then they’re more likely to sell to someone across the street than across the state because of the lower cost in transportation or shipping. If a car is worth $1000 and someone from another state has to spend $200 in time and fuel to come get it, he’ll only spend $800 at the auction. Someone across the street can bid the true $1000 because there’s not really any cost associated with item acquisition. Because it’s logical for the local buyers to spend more, it makes more sense to spend more effort reaching them. Unless you’re selling niche items, make sure you have your local and existing possible buyer base covered before you expand your reach to include farther away customers.

The key is to supplement your existing, local campaign with additional advertising. If your current customers find out about your auctions through paper – brochures and newspaper ads – then you shouldn’t quit using those mediums all together. While it may be an arguably good idea to migrate away from paper ads and postcards in general, doing so only because of an Internet auction will only mean that your existing customers won’t participate.

The first place to advertise your auction and the items in it is on your website. Whatever Internet bidding platform you select, be sure that the auction and all relative information is posted on your website first. This strategy ensures that you simply have to place lead-generation ads in newspapers and other old-media venues with a link to your website rather than an item-level listing which takes up more space and costs more money. In a future episode, we’ll look at the different kinds of Internet bidding providers and the difference between a branded solution that keeps the bidding catalog within your site and a portal solution where you direct the customers to another website that allows the bidding on your items.

Once the users come to your website, do your best to capture their information before pushing them off to your Internet bidding provider. Get their email address. The bigger your email list, the less important other means of advertising become and the less you’ll have to spend on traditional media.

Internet auction calendars are probably the best initial place to post your items. The new NAA auction calendar supports item-level listings, so when you’ve cataloged your auction for Internet bidding you can upload that inventory to the NAA calendar at the same time you upload it to your Internet bidding provider. Other calendars worth mentioning are the calendar for your state association, globalauctionguide.com, nationalauctionlist.com, and auctionzip.com. They don’t support item-level listings yet, but they will syndicate your content to other listings. There are many other auction calendars, some of which scrape content from the calendars I’ve already mentioned. If you know of an auction calendar worth mentioning, let me know in the comments for this episode.

Other possible places to post your listings are craigslist.com and Google AdWords. The latter costs money, but if what you have is fairly specialized it can return much more than you invest. Forums related to the product you’re selling can also be a good place for niche items. If you’re selling an antique tractor, for example, there are several websites with forum sections that specialize in antique tractors. It’s also worth mentioning that if you have specialty merchandise, contact an auctioneer who specializes in that type of asset. I don’t know of an NAA member who wouldn’t help another. The NAA forum, mentioned in episode one, is a great place to post general questions to the NAA membership regarding the marketing of specialty items.

The take-home message is that you should advertise every auction you have, regardless of bidding method, to customers with whom you have a preexisting relationship. They’re much more likely to pay attention to your ads and to purchase from you again. The next most important place to advertise is in venues where someone is looking for items in auctions – namely the Internet auction calendars and the auctions section of the newspapers in the area of the assets. After that, if you still need more, look at places where customers may be looking for items in general – like Adwords and craigslist.com – and try to convince them that an auction is a better place to buy.

That’s it for episode two. The next episode will be a tech roundup, covering many of the smaller stories – including current events and product reviews – from auctioneertech.com.

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 http://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 transcrip s, on the auction podcast page of auctioneertech.com.

Thank you for listening. Now go sell something.

The biggest misconception about Internet only auctions is that an item will sell to someone other than the person to whom it would have sold had you used a live auction. It very well may, but if you move completely from a local advertising campaign to a completely Internet-based advertising campaign, you’re bound to see a big drop in participation. Using the Internet to take bids doesn’t mean that the item will sell to Guam or Kansas. The Internet is simply an easier way for customers to participate than driving and spending time at a live auction. If the assets you’re selling are of general use, then they’re more likely to sell to someone across the street than across the state because of the lower cost in transportation or shipping. Unless you’re selling niche items, make sure you have your local and existing possible buyer base covered before you expand your reach to include farther away customers.

The key is to supplement your existing campaign with additional advertising. If your current customers find out about your auctions through paper – brochures and newspaper ads – then you shouldn’t quit using those mediums all together. While it may be an arguably good idea to migrate away from paper ads and postcards in general, doing so only because of an Internet only auction will only mean that your existing customers won’t participate.

The first place to advertise your auction and the items in it is on your website. Whatever Internet bidding platform you select, be sure that the auction and all relative information is posted on your website first. This strategy ensures that you simply have to place lead-generation ads in newspapers and other old-media venues with a link to your website rather than an item-level listing.

Once the users come to your website, do your best to capture their information before pushing them off to your Internet bidding provider. Get their email address. The bigger your email list, the less important other means of advertising become and the less you’ll have to spend on traditional media.

Internet auction calendars are probably the best initial place to post your items. The new NAA auction calendar supports item-level listings, so when you’ve cataloged your auction for Internet bidding you can upload that inventory to the NAA calendar at the same time you upload it to your Internet bidding provider. Other calendars worth mentioning are the calendar for your state association and globalauctionguide.com. They don’t support item-level listings yet, but they will syndicate your content to other listings and many other calendars actively scrape content from them.

Other good places to post auction listings are craigslist.com and Google AdWords. The latter costs money, but if what you have is fairly specialized it can return much more than you invest. Forums related to the product you’re selling can also be a good place for niche items. If you’re selling an antique tractor, there are several websites with forum sections that specialize in antique tractors.

The take-home message is that you should advertise every auction you have, regardless of bidding method, to customers with whom you have a preexisting relationship. They’re much more likely to pay attention to your ads and to purchase from you again. The next most important place to advertise is in venues where someone is looking for items in auctions – namely the Internet auction calendars and the auctions section of the newspapers in the area of the assets. After that, if you still need more, look at places where customers may be looking for items in general - like Adwords and craigslist.com – and try to convince them that an auction is a better place to buy.