When people think of online auctions, most people think of Ebay. eBay is an auction company in some ways, but when they have the “buy it now” option, that is not an auction because how many other people would like to “buy it now” too. eBay has set the stage for online auctions in the minds of people that are new to auctions. Also, another thought that people might think of for online auctions is waiting until the last minute to bid. Today, that doesn’t exist as much, and is referred to as “sniper bidding.” The reason it is less popular today is because of the wide reach of the internet giving more and more online bidders stronger signals. Sniper bidding was just someone that had the fastest internet, and if two or more bids were sent in simultaneously with one second left, the bid with the faster internet would overtake the slower internet bid. A “soft close” is what most online auction companies use today. That will explained in more detail later in the article.
Auction History & Importance
If you are new to the auction world as a buyer and seller, it is important to remember the basics of an auction before heading into a sale. Even though an auction may not be your first choice for shopping, I would urge you to attend an auction to see if you enjoy the atmosphere. Also, by going to an auction and looking at items to buy without having a set price tag, it is quite different compared to normal shopping, not to mention the energy and rush of bidding on something and winning or losing will leave you feeling energized. Besides, you are not going to walk into Wal-Mart and buy an antique decoration or mid-century furniture piece right off the shelf.
Going to a live auction allows a greater understanding of what goes on for an online auction. On Wikipedia, live auctions have a long history, “having been recorded as early as 500 B.C. According to Herodotus, in Babylon auctions of women for marriage were held annually. The auctions began with the woman the auctioneer considered to be the most beautiful and progressed to the least. It was considered illegal to allow a daughter to be sold outside of the auction method.” Today, auctions are held everywhere and for everything. With the help of the internet, a buyer from Mexico can connect and purchase from a seller in Iowa, with just the push of a button. It is definitely a smaller world then we realized. Most auction companies have been around for quite a long time, and have auctioneers that know the value of items, in which that value hasn’t been registered on paper or online.
Pros & Cons of Online Auctions
One of the coolest things about bidding on online auctions is that you can bid from the comfort of wherever you are using your desktop computer, laptop, your mobile phone, maybe even a watch. For example, you could be on a fishing boat or a mountain top and also be buying something on your phone. Also, folks are looking online on their phone and going home or to their office to bid on a desktop computer. The percentage of desktop vs mobile bidding is about the same right now. Online auctions are moving more towards mobile or on a watch, to not miss a bid. Once, I was bidding on an online auction and got outbid, however, I was not by my phone, but did get a notification of “you are outbid” on my smart watch. Luckily, because of this new technology, I did bid again on my watch just in time to win the auction. If it wasn’t for the notice of being outbid, I would have lost the deal. Every online auction I have been a part of, will send you a notification of being “outbid” or having the “high bid.”
Another pro of online auctions is you can put a “max bid” and walk away from the auction and it will continue to bid for you up to the max bid you set. For example, the high bid is at $100 and your max bid is $1,000, if someone else bids $200, your max bid will kick in and bid $300. My favorite thing about online auctions is that there is a “soft close” on most online auctions today. Like I mentioned before, the sniper bidding is less and less today. A “soft close” is, as the seconds or minutes are coming to a close and there is a bid right before the closing, it will add more seconds or minutes to the clock, allowing more bids to come in. A buyer should like this because of not ever having an excuse for missing an item. A seller enjoys the soft close because there will never be a missed bid and, in return, will get the best price. It is going to be interesting to see what comes next for bidding.
A lot of auction companies are also charging a buyer’s premium on top of the closing price. A buyer’s premium is an extra charge on top the highest bid and is often a percentage of 2-10 percent. For example, an item sells for $100 plus a 10 percent buyer’s premium, equaling a final total of $110. This is a con for buyers and sellers both and only benefits the auction house or company hosting. A lot of times the buyer’s premium goes to the auction company for marketing/advertising or the use of online software. A potential buyer does not like to see buyers’ premiums because it is educating them to bid at least one bid less. A seller does not care for this either, making its’ item sell for one bid less, which then makes the value not a true market value. Therefore, an auction value sometimes is not a true number of what something is selling for unless you do some more research on the extra charges like a buyers premium. Today more and more items, especially real estate property are selling on auction.
Another pro of online auctions is that most of them will allow you to look at items 3-4 weeks before the bidding, enabling you to make a wiser choice and max bid. Having a budget or number in mind before bidding starts is very smart also. It may seem simple to have a budget and say you’ll stick to it, however, when emotions run high and the item or property you want is on the line, it becomes very easy to surpass your budget. A good example of this is buying the neighbor’s property, because it is next door, but values might be worth more because of location. An online auction is not as bad in that instance, but in the case of not knowing who your neighbor is or could be, might be worth more. Even though most might believe that a con to buying on an online auction is not knowing who you are bidding against, I believe it makes a person have a sharper pencil with a real value. As an auction company, it also takes a lot of time and responsibility to put on a live auction. From renting the fairgrounds to having port-a-potties to insurance to setting up two weeks in advance to buyers picking up their items two weeks after the auction. If attending a live auction, it is good to come early, allowing you to have time to browse the inventory or property longer.
The Future of Auctions
I believe that the future of auctions is just starting to get good with online auctions, and we are just now in the early stages. With mostly all folks having internet and a smart mobile phone, for the millennials and the next generation to come, it will be second nature for them to bid online for auctions. Auctions are not a last resort anymore for selling, especially now with the help of online auctions. Some used items that sell for new prices include artwork, sports memorabilia, and antique items that are now selling for new records thanks to online auctions. Buyers and sellers are more educated and knowledgeable on values today than they have ever been, meaning you are going to be less able to “get a good deal” anymore.
The dealer price and auction price are coming closer together because there are values out there for anyone willing to do a Google search on pretty much everything that is sold. Just look at Facebook, when you sell something on its marketplace, it tells you that it was sold and for what price. Therefore, I don’t think it would be too long before Facebook would have some sort of online auction selling like eBay, or maybe even the powerhouse of Amazon. If you use the hashtag “onlineauctions” on Instagram, there are only 4,500 times that have been posted, so it is just starting to get into the social media world. Online auctions are a win-win for both the buyer and the seller making buying and selling simple and quick to get what you would not get anywhere else.