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SOLD II®
“SOLD II in the News”
Internet Auction Guide

Auctioneer Guide to the Internet
(first published 2001)

SOLD II is easily integrated with most “live internet auction providers.”
There remain, however, some fundamental questions concerning the best use of the internet for your auction business.
Time has only proven that the same questions apply today as in 2001.

Auctioneer's GUIDE to the Internet


SOME COMMON MYTHS ABOUT AUCTIONS & THE INTERNET

We can't really gain from the Internet without having our own "live" internet auctions.
This option for your internet presence is both the most costly and the least effective for most auctioneers. Those who are successful with this concept, however, do it for themselves, not in conjunction with the .com's.

Make the simpler and less risky aspects of your internet strategy work first; then carefully consider whether the live internet bid option fits your business. For most general auction firms, only occasional items have any interest outside of the local market. Frankly the notion of selling stepladders (we use this example because we've seen these listed) via a live internet feed is absurd. If you don't' believe this, research it yourself. Go to some of these auction portals and look at the types of bids they have pulled for other auctioneers. We think you will agree, they are pretty pathetic. Talk to auctioneers who have tried this (who aren't a part-owner of one of these .com's); they'll tell you how weak the internet bids actually are. Of course, these failures also relate to use of .com portals, rather than the auction firm's own portal.

Approach your internet presence as a service to your current customers; then the internet can be an important marketing tool for you, just like your telephone, the fax, and your computer. Use general e-mail promotion, publishing of auction details, and even absentee bids as a service to your clients for success.

Internet bidding at your auctions can be effective for special items and as a service to your existing clients. Don't forget that most auction business is local and the internet won't change that. If you decide to supplement you auctions with Internet bidding, it is a good idea only if you use your own portal (webpage), NOT someone else's!

If we want an internet presence including "internet" bidding, we have to work with one of the .com's.
Nothing could be further from the truth. Working with these firms will promote them, NOT YOU! They want and need your merchandise and ultimately your clients, nothing more.

Would you share your client lists with your competitor? Putting your auctions at the .comportals amounts to the same thing.

It's impossible to do "Live Internet Bidding" at my real auctions without using one of the "live" bid auction sites as my portal.
Untrue! For example,
you can do this with the help of SOLD II right at your current webpage. Yes, you will need some investment, but not the amount these other guys are asking for. You don't need to share your bidders and consignors with your competitors (the .com's and the other auction firms at their sites) to do this.

But the big internet portals promise to bring me new bidders I can't get any other way!
Don't be fooled by this claim.
If you actually get some new bidders, they will mostly come from the clients of the other auctioneers who also have posted auctions at the same portal. That's obviously a two-way street. But sharing your bidders and consignors with your auctioneer competitors is not the worst of it.
NOW the .com's desperately need your merchandise. The whole .com game is to get more and more direct consignors from your auctions and at some point do it without you, or with you where they dictate your fees. The ambitious ones seek nothing less than total dominance of the auction industry. How can it end up any other way if they are actually successful in bringing actual buyers? The good news is that most of these portals will fail, perhaps all of them because they can't deliver.

Practical Considerations: some common misinformation

You have to be a large company to "go it" alone, we're too small.
Actually you can have an effective internet presence with only minor investment and expenditure. For example, SOLD II can provide what you need (including Internet bidding) at a fraction of the cost of the others and leave you in control.

It will take a lot of expertise we don't have.
If you have learned to do word-processing, you can learn what's needed for an effective internet presence.

It will take a lot of extra time we don't have.
Sure, if you do it wrong. But if you do it right, you'll actually SAVE time vs what you are doing now. This is especially true if you take advantage of SOLD II's integrated solutions.

We would need our own internet server to do what we want.
No! For absentee bids or even live bids during auctions, it can all be done via our servers and appear to be on your own webpage (proxy solution). Or if you like, your entire web site can be transferred to our servers. You can select whatever level of service you need. Either way, you promote your own business and identity, not someone else's.

The Auction industry will become dependent on the internet.
Not currently; probably never for most merchandise.
Your auctions are not dependent on the internet, but they can be supplemented by the internet.

We have to change how we do our auctions to make effective use of the internet.
Yes and No. It depends what you do.

No, you won't have to change to use basic internet marketing strategies
such as e-mail, webcatalogs, and pre auction absentee bids from the internet. These involve supplementing what you already do with only minor procedural modification. You should actually save time as well as money.

YES, you will definitely have to change how you conduct your auctions if you take internet bids during them! Slower because of internet forced delays, your bid calling and much, much more will have to change. Forget about all of the techniques you learned about choice etc. to speed through an auction. It won't fit the internet. As we mention below, you've now moved into a different business. We can show you how to minimized these changes, however.

"Internet Auctions" & your Auctions - It's a different Business!

Great confusion is created by calling whatever the .com's do, auctions. It gives everyone the wrong impression. It misleads consignors. It has convinced many auctioneers into thinking they are, can, or should be in the same business. Visit high profile sites such as ebay, you know it's a different business; these are really nothing more than fancy shopping carts. Ultimately, the .com's are your competitor for merchandise, but they aren't providing the same services nor are they effective with the same items.

Auction industry publications and writers have added greatly to this confusion. Sadly, they have perpetuated much of the mis-informaion and myth surrounding the internet and the auction industry. If auctioneers are mystified by the internet and how it effects their business. it's little wonder.

These misunderstandings perhaps explain all of the failed .com startups for absentee bids, "live" bid auctions, etc. Some of these have been started by auctioneers; others are true .com's trying to buy and control the auction market using millions in venture capital. They all have the same problems in common: a centralized bidding site, promotion of their .com business, (not their clients), and poor results.

Many established retailers & mail-order houses have successfully supplemented their existing business with the internet. Auctioneers can also supplement their existing business the same way. A few auctioneers already have by using their own website portal. To date, however, the use of someone else's portal has only failed.

Most business is local (unless you're a market specialist)

Are you really going to get a better bid over the internet on that stepladder or kitchen table? Are you really going to attract a whole bunch of nationwide bidders and new clients on the vast majority of what you sell. Even if you sell high priced specialty items, most people want to "kick the tires" before they'll bid. Oh, yes, if you do use that .com's portal (instead of your own) you will attract the professional low bidders, those people who cruise the internet bidding on everything at the minimum first bid.

The point is you have to have a very specific situation to attract much of value from outsiders. Most of your business will remain local. But these local clients can be serviced better and more cost effectively using the right internet tools. Supplement your existing business. Attract more local clients through these better services. That's where the internet can supplement your business.

If you are a specialist, the internet may be perfect for you but avoid the Big Mistake.

OK, you're highly specialized and attract buyers to your auctions on a nationwide basis. We mean really attract them nationwide, not that you have auctions everywhere in the nation but still attract mostly local buyers. If you pass this test then you probably have the items where an internet presence, perhaps including "live" auctions on the internet, makes sense.

Please note: Just because your items are specialized and high priced, it doesn't mean they are any good to be sold via the internet. To the contrary, the higher the price, the more likely a critical on-site inspection will be required. Yes, promote such items via the internet, but don't expect your actual best bids to come from it.

IF YOU HAVE THE RIGHT GOODS, then:

Don't make the mistake of using someone else's portal (the webpage bidders use to access your auction).
In the long-term, you can't win!
The generalist .com sites for internet pre-auction absentee or "live" bids, won't attract the bidders you want. You will end up doing more to promote the .com portal than your own auction.

If you use a portal specializing in your items, you may get some good internet bids. But you will also may prove to your consignors that there's a better and cheaper way to cut out the middleman (you). If it works for your auction, your best buyers and sellers may desert you to join up directly with the .com's portal (since you've proven they no longer need you) in the future. If it doesn't work what have you gained? You've certainly lost, since you've ended up promoting their portal rather than your own.

There is huge irony to internet bidding at your auctions through someone else's portal: if it works, you can only prove to your best consignors that they no longer need you.

Don't risk your best customers; don't give them to your competitor. Instead do what you should on your own site; promote your own business.



About the Author:

Carl Borning is co-author President of Proven Software and co-author of SOLD II, a leading professional auction software since 1982. He is also co-author of ProvenBenefit software for fund raising auctions and Proven CHOICE accounting software. Carl's considerable volunteer fund raising experience includes campaign and event chairman as well as board member and chair. Carl holds a BA and MBA from Cornell University.




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