Are online auctions better than live auctions?

 After the pandemic in 2020 many auctioneers switched to holding online auctions. I was one of them. For several months public gatherings were not allowed, and even when that changed there were limits on how many people could gather. As those limits began to be raised, the attendance at live auctions did not improve. My auctions would have 15-20 people there. Other auctions I attended had about the same number, and it's hard to have a good sale with that few people. Gradually, and often reluctantly, auctioneers began exploring holding online auctions. One friend of mine told me before I made the move that there was a steep learning curve, but it would be worth it. As the end of 2020 arrived I began making the transition to online auctions and had my first one in January of this year.

There are several things I miss about live auctions. I miss the interaction with the buyers. We had fun at my auctions. I also miss working with one of the greatest auction teams anyone in this business could ever want. They brought a wealth of knowledge to the auction as well as a lot of fun.

Doing online auctions requires a lot of work, especially in cataloguing the items for sale. Since most people will not inspect the items in person it's important to take good pictures and give them an accurate description of the item. There is also the matter of shipping. We typically ship about 10% of our sales to non-local buyers. Many online auction companies ship much higher numbers than we do, but we limit what we will ship to smaller items. Even with that small number, shipping takes a good day to complete.

When someone wants to sell their items at auction, it's important to decide if an online auction will be best for them. In my experience I think the answer in most cases is yes, especially if the auction company is willing to ship to non-local buyers. The reason is simple: you are offering your items to a larger market. Sometimes, these individuals are willing to pay more than local buyers are. Even if we note that an item is not shippable, that doesn't mean that a buyer from out-of-state won't buy it. We had one customer drive to our auction center in Indiana from Texas to pick up her purchases. We had another individual drive from Missouri, and we've had more than one drive more than three hours one-way to claim his items. Online auctions can offer your items to some serious buyers.

However, there are exceptions. Every estate will have low-cost items that ends up in box lots and flats. These usually do not sell well at an online auction. I've turned down a few sales that I didn't think would do well at my online auction because of the quality of the items. I was able to refer the individuals to another auctioneer who sells that kind of merchandise, and I'm sure they will do better selling with him than they would have with me. If a person is well-known in the community and is known to have quality items, an on-site sale might be better than an online auction. I don't know that there's been any studies done on that, but it's my guess.

There is one problem that seems to happen in every online sale. Not everybody pays for the things they buy, and it becomes impossible to contact them. Other than reporting them to the online company the auctioneer uses and banning them from further auctions, there's little that can be done. Some auctioneers, when the purchases totaled thousands of dollars, have taken such individuals to court, but I've not heard the outcome of those cases. Before agreeing to selling at an online auction the seller should ask the auctioneer the company's policy when this occurs.

Let me close this post with one final comment. While many auction companies have charged a buyer's premium for years, others have resisted. I only know of one local auction company that charges a buyer's premium. However, as auction companies have moved to online auctions most of them, including me, have charged a buyer's premium. There are additional costs involved in conducting online auctions that must be covered in some manner, and most of us have determined that a buyer's premium is the best way to do that. I think most of us have kept that amount to a minimum, but it is necessary if we are to cover the additional costs that come with online auctions. I may be dong a live estate auction later this summer, and if that happens there will not be a buyer's premium charged at that auction, but for the online auctions, a buyer's premium is necessary.

If you have specific questions about online auctions, or the auction business in general, please do not hesitate to contact me.

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