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Rinker on Collectibles: Defining Online-Only Auctions

by Harry Rinker (11/23/09).

On November 14, 2009, I participated as a speaker at the fall convention of the New York State Auctioneers Association, held at the Colgate Inn at Hamilton, New York. My two presentations were “Antiques and Collectibles in the 21st Century: The First Decade” and “Where Have All the Antiques Gone?” The first is the title of my Masters of Fine Arts in Professional Writing thesis at Western Connecticut State University.

Harry RinkerDuring my career, I have spoken at state auctioneer conventions in New Jersey, New York, Ohio, Pennsylvania, Tennessee, and West Virginia, as well as at the annual convention of the National Association of Auctioneers. I always leave with more knowledge than I impart. Auctioneers share. When I ask questions, and I ask plenty, I received detailed, honest answers.

When time permits, I attend the presentations of other program speakers. Continuing education is essential in the antiques and collectibles community. Robert A. Doyle, a member of the NYSAA and member of the NAA Hall of Frame, spoke about online-only auctions at the November NYSAA meeting. Although the concept has been the subject of a heated debate within the auction community for several years, I was unfamiliar with it and assume many of my readers are as well. What follows is summarized from Robert Doyle’s Power Point presentation.

What is an auctioneer? Technology has altered the standard definition of an auctioneer—an individual who sells merchandise from a podium by taking bids from an audience and indicating a sale’s conclusion by a falling gavel striking a wood block or other objects. Doyle defines a professional auctioneer as: “Someone who utilizes marketing to sell items through competitive bidding to the public in a commercially feasible manner.” Note Doyle’s definition leaves the method of sale wide open. The caller can be live or electronic, thus the argument within the auction community. One faction strongly believes that there is no auction unless a live auctioneer calls it. The other has no problem with the auction being called by a computer program, as long as competitive bidding is involved.

Doyle and a few others within the auction community have been utilizing “dynamic online-only auctions” for several years. Doyle defines an online auction as: “A well-marketed, commercially feasible auction of property that runs on an Internet-based platform for a period of time, with each lot subsequently closing at a given time with a feature that allows last minute bids to extend the clock on each lot until all online bidders are done bidding.”

The debate whether eBay is an auction-based platform or the actual auctioneer is irrelevant here. eBay’s auction-based platform does not utilize a last bidder standing principle. Instead, a lot on eBay’s auction-based platform closes at a fixed time. The bidder who has placed the highest bid at that moment is the winner. EBay’s platform is actually a return to the dominant auction method in the 17th and 18th centuries. A candle was lit by each lot. When the candle sputtered out, the lot closed. The high bidder at that moment won the lot. Auction bid boards found at modern day antiques malls work on this same principle, only the candle has been replaced by a clock.

Do not confuse online-only auctions with auctions that allow online bidding on platforms such as artfact.com, icollector.com, liveauctioneer.com and proxibid.com during the bidding process. In this instance, an Internet participant follows the auction on his or her computer via a live feed of the auctioneer calling the auction or images of the lots as they are offered for sale with a sound track of the auction call streaming along with the images. The computer bidder competes with the bidder on the floor, in the book (left bid), or on the phone. The lot closes when the bidding is finished.

An online-only auction is different. It takes place only on the Internet. There is no preview except electronically and no onsite, book or phone bids. Everyone who bids uses a computer.

Online auctions have proven effective for the successful dispersal of household contents, office equipment and vehicles. The auctioning of specialized collections has met with mixed results, but should improve as more and more individuals learn about and become familiar with the online only auction.

An online-only auction works as follows. After the auctioneer negotiates a contract to sell, he visits the site where the objects are located. He and his assistants lot the objects into groups, each group ideally realizing $100 or more when sold. The lots are arranged in the order of sale and photographed. These photographs become the electronic auction catalog. As many as six photographs are taken of each lot. Descriptions, including size and other key information, are added to the lot picture group. This full catalog (images with descriptions) is posted to the Internet. A specific bidding period is established, ranging from one day to a week.

Prospective bidders can e-mail or call the auctioneer with questions. As indicated earlier, bidders are not able to physically handle the objects. They have to trust the auctioneer’s integrity that he has accurately described and/or pictured all defects.

The auctioneer markets the auction to his e-mail, Facebook, and other electronic address lists. Doyle’s e-mail list consists of more than 30,000 addresses. Some local advertising may take place.

Ask A WorthologistIn the days leading up to the close, bidders can leave left bids on the auction site. However, the bidding methodology negates the use of sniping services.

At a fixed time, the lots begin closing at a sequential interval ranging from 20 seconds to one minute. Bidders are notified electronically if they are outbid.

A lot does not close until a fixed time interval passes without a bid. Each new bid extends the closing time of a lot. As a result, multiple lots can be involved in the closing process simultaneously. Successful bidders are invoiced electronically.

Winning bidders are expected to pay for their purchases within three days and to remove material purchased from the site where it is housed within a fixed period of time, usually eight to 10 days following the close of the auction. The auctioneer does not ship goods to winning bidders. In fact, winning bidders are expected to supply their own packing material. This is the most obvious drawback in this sales approach. It eliminates bidders who do not live within a convenient drive time or have a work/life schedule that avoids picking up purchases within the requisite time framework. It also eliminates foreign buyers unless they have a representative within the United States acting on their behalf.

A bidder must determine if he can adhere to the closing requirements before bidding. Doyle’s experience is that individuals will drive hundreds of miles to pick-up lots that they have won. Few sold lots go unsold or unclaimed.

Confused? While I hope not, I understand that you might be. The best way to understand the process is to follow an online only auction on Robert Doyle’s Web site. Read the terms and conditions before tracking the auction.

I am often asked: “Do I see a challenger for eBay in the immediate future?” No is my stock answer, and it remains my stock answer. Clearly, the individual running an online-only auction is an auctioneer. If the individual lives within a state that has an auctioneer licensing law, the person conducting an online-only auction has to be a licensed auctioneer. In states without an auction licensing auction law, anyone can conduct an online only auction.

As online-only auctions gain in popularity, it is conceivable that an online bidding supplement company will consider developing a method whereby private individuals can utilize its platform, just like eBay.

Change is the order of the day in the antiques and collectibles business. Online-only auction is a new change about which I was glad to learn.

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Rinker Enterprises and Harry L. Rinker are on the Internet. Check out his Web site.

You can listen and participate in “WHATCHA GOT?,” Harry’s antiques-and-collectibles radio call-in show on Sunday mornings between 8 a.m. and 10 a.m. Eastern Time. It streams live on the Genesis Communications Network.

“SELL, KEEP OR TOSS? HOW TO DOWNSIZE A HOME, SETTLE AN ESTATE, AND APPRAISE PERSONAL PROPERTY” (House of Collectibles, an imprint of the Random House Information Group), Harry’s latest book, is available at your favorite bookstore and via Harry’s Web site: http://www.harryrinker.com.

Harry L. Rinker welcomes questions from readers about collectibles, those mass-produced items from the 20th century. Selected queries will be answered on this site. Harry cannot provide personal answers. You can e-mail your questions to harrylrinker@aol.com. Only e-mails containing a full name and mailing address will be considered. Please indicate that these are questions for WorthPoint.

Copyright © Rinker Enterprises, Inc. 2009

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