Biting the hand that feeds you...

For those of you who've followed this blog in the past, read what I've had to say about the various online bidding platforms, or heard me speak about them, you know that I've been a pretty staunch supporter of Proxibid in the past - I like their bidding platform, I like the people who work there. I like a lot of things about them.

Unfortunately, they have decided to shift their business strategy going forward, and have made it pretty clear that they want to start competing directly with Auctioneers for business. Look at the chart above, and it should be pretty obvious that going forward, Proxibid intends to begin seeking direct consignments and bring property to the market directly, bypassing the auction companies and auctioneers who have helped them build their business thus far.

Additionally, there have been a few other business decisions relating to their advertising, and their domain hosting that have raised serious questions about their future relationships with Auctioneers. Specifically, they purchased a series of domain names, including www.proxibidsucks.com, which they did not park, but used to direct traffic to their home page. The reason this is a bad thing, is that if you had used Proxibid's services as an auction company, your company name would show up in a google search along with the word "sucks" with a link leading to Proxibid's website (e.g. if you had an auction company named "Joe's Auctions" and had used Proxibid, and performed a google search for "Joe's Auctions Sucks" you would find a link to Proxibid's website). I have a serious problem with this. This is a potentially damaging form of advertising to the clientele that Proxibid's success is dependent upon. (Note: Since I began writing this blog entry, Proxibid has parked their Proxibidsucks.com domain, effectively ending this problem)

Proxibid is a tool. I don't mean that in the colloquial sense, I mean it literally. They exist to perform a series of tasks and functions for auctioneers and bidders - to provide a virtual marketplace where bidders and auctioneers can meet in the middle and exchange money for goods. In the past, they have performed this function well. However, their stated goal is to insert themselves into the mix, bypassing the auction companies who they have previously worked with, and using the marketplace they have built to sell items themselves. In doing so, they will be moving from a position of partnership with the auctioneers who have worked with them all along, into one of direct competition. I want to be clear on this point - I'm all for competition. That being said, if hypothetically, you owned a local grocery store or pharmacy, and were buying your stock from a wholesaler, who then opened up a direct distribution wholesale retail store next door to you, you might start looking for a new wholesale company to buy from, right? Obviously that is an exaggeration of what Proxibid is doing, but I'm sure you get my drift.

I've been reading through what I've seen being posted amongst my fellow auctioneers on Facebook - there is an ongoing conversation regarding Proxibid's business decisions, as well as other viable bidding platforms. The subject of an NAA maintained bidding platform has been brought up, and I think it is one worth further discussion.
Lets say that the NAA does decide to pursue this course of action. The immediate problem is the massive funding and support that building a new platform from the ground up would require - I would lay out the problems, but Brandon Harker (the owner of AuctionFlex) has already done so better than I ever could. So I will shamelessly copy portions of his explanation here

"Building systems that scale to handle thousands of simultaneous bidders for hundreds of auctioneers is very complex, requires significant investment, and can't be accomplished in 3 months, much less 3 days. A system that can handle all the NAA members would cost hundreds of thousands of dollars to get off the ground and would cost hundreds of thousands annually to maintain."

Here is a little more of his wisdom


"When I say building out systems, this is what I mean: 1. Custom software built from the ground up with the auction-industry as its target, offering some combination of absentee bidding, timed auctions, and/or live broadcasting. Timed auctions should include capabilities like like soft-close, grouped soft-close, staggered ending, etc.
2. Software built to be load-balanced across racks of servers. This allows server maintenance to be done without bringing down the service. This allows servers to fail without bringing down the service.
3. Redundant everything: Redundant fiber backbones, redundant routers, redundant load balancers, redundant firewalls, redundant web servers, redundant database servers, redundant switches, redundant power. A system designed such that no single hardware failure will bring down the service.
4. Database mirroring or clustering so that bids are automatically backed up in real time to multiple database servers. If a database server fails, no problem, no bids are lost.
5. Full-time I.T. staff with physical access to collocation facility for real-time 24/7 monitoring/notification and immediate response to any issues.
If an auctioneer is looking for a provider, they should ensure that their provider has made these investments in their systems (we have).
By contrast, a smaller provider is probably going to have some or all of the issues I describe below:
1. Canned scripts: Anybody can take one of the free auction website scripts like phpauction.net, put it on an inexpensive virtual host, and claim to offer an auction website. Total cost: $50-$100 a month. Most of these scripts won't work well as an online auction solution because they all tend to be very item-based (like eBay). In contrast, our industry treats timed auctions somewhat like a traditional auction. The auction has lots and these lots close over the course of a few hours. On an ebay-style website lots close 24/7 with no relation to one another.
2. Lack of redundancies: Everything is sitting on a single server. When the server needs maintenance the site goes down. When the server has a hardware failure, the site goes down for hours or days.
3. It's not going to scale: The software is not built with consideration for load-balancing across multiple web servers. The only way you scale is to get a bigger server. Eventually you can't get a bigger server and now it's time for some major rewrites.
4. No full-time I.T. staff dedicated to the web service, and only the web service. When the unexpected happens (and it will happen) the ability to resolve the issue timely is hampered because of this."

Almost immediately after this post was placed up, Scott Musser posted a plain request for AuctionFlex to develop support for live simulcast auctions.


I don't want this post to come across as a play by play of other people's conversations - so I feel its time for me to weigh in with my 2 cents.


If you've read my earlier posts, you know how I feel about both timed internet auctions, live simulcast auctions, and their relationship to the auction industry in general - but I'll summarize my position here before moving forward.


Speaking as a young auctioneer, with a young man's view on technology, I cannot stress enough the importance going forward as an industry in working to streamline the auction marketing method with current and future technological trends. I have said before, and I will say again that there will ALWAYS be a place for a person with a microphone to stand before a crowd and talk fast - but as time goes on, if that person isn't as intimately familiar with modern technology and its ability to spread his marketing effectively and receive bids from as wide an audience as possible, he or she will quickly find themselves on the sidelines of our industry.


If it is too costly for the NAA to build their own internet bidding platform, and I believe that Brandon is probably right in his views on that subject, then it may be in all of our best interest to investigate the possibility of having the NAA work alongside AuctionFlex to develop an NAA branded portal - a National Auctioneers Association approved online market hub, where both timed and live simulcast auctions can be advertised to the general public, as well as performed to the same. This, in my humble opinion, would solve a great many problems all at once. I'll list a few below:
1. Increased Public Awareness - Having a destination hub for online bidding would raise public awareness of the NAA, its members, and the Auction Industry in general. This is an obvious boon to all the members of the NAA, to say nothing of the organization itself. The more money and merchandise that flows through this potential marketplace hub, the better it will be for all involved. If this isn't a goal we already have, it should be.

2. Open and Fair Playing Field - With a site and platform such as the one I'm imagining, all members of the NAA would have access to an enormous pool of potential bidders. If built properly and developed into an attractive and open marketplace for auctioneers and bidders, it would allow seamless advertising potential for any auction uploaded to it. Imagine you are a bidder, searching for an auction. You visit the site I'm proposing, and search for the item you are looking for. The auctioneers listing their sales can use this site as a marketing ground for their upcoming sales, while retaining their own bidders information for future marketing and sales. The NAA wouldn't have a horse in the race - they aren't in the business of directly marketing merchandise to bidders, rather they are a form of support, collaboration, partnership, and education for Auctioneers.

3. Cooperative Interests - What I mean by that is that quite simply, by pooling our resources as individual Auctioneers and Auction Firms, as well as the collaborative influence we already have built as the NAA, we all stand to gain. Having a hub/portal combination advertising & bidding platform site that is directly attached to the NAA will boost membership, drive increased attention to our "brand" as an organization, promote our organizations views on everything we stand for, enable free and open competition while greatly increasing the individual Auctioneer's marketing reach.


From what we've seen recently, I think it is fair to assume that the business decisions being made by Proxibid - what seems to myself and others I've listened to to be a shift towards direct competition and "eBayification" to borrow someone else's phrase - is likely to be the case for any major online bidding platform out there. I'm not begrudging Proxibid's decision to take their business in this direction - it is a smart move in their case (provided they can make their transition successfully), to grow their brand and their business (and let's face the facts, it IS business, and they are trying to get as big a piece of the pie as they can, a move I can understand). That being the case, I think it is in OUR best interests to change the way that we as individual auctioneer's are approaching online bidding platforms. As I see it, we have 3 routes to choose from. 
1. We can look forward to either abandoning the online market share or partnering with massive companies to host our sales alongside their own on their own branded platforms.
2. We can create our own NAA branded online platform as I discussed above, and use it rather than a 3rd party's platform
3. We can select online platforms hosted by companies that do not retain the information for themselves of the bidders who participate in our auctions that they host - companies where we "own" the data we collect from said bidders. This will forestall those online bidding platform suppliers from "eBaying" or "Proxibidding" up in the future.


Please let me know what you think - and if I missed something important along the way.

Online Bidding Platforms - Part 3

We held our 2 day Civil War auction last weekend, hosting online bidding through both Proxibid & LiveAuctioneers. It was interesting. This time, as opposed to the previous trail run of LiveAuctioneers, there was a longer period of time in which the sale was made available to the public on LiveAuctioneers. As a result, at the time of the auction, we had nearly the same number of registered bidders on both platforms, and I've got a comparison of how the sales broke down between the two platforms, which went head to head in a pretty fair test imho.

Platform ][ Total # of Lots ][ Lots Sold ][ Total Sales ][ Avg $ Per Lot ][ Total % Lots Sold ]
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Proxibid ][ 557 ][ 155 ][ $14,725.00 ][ $95.00 ][ 27.82% ]
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LiveAuctioneers ][ 557 ][ 128 ][ $12,495.00 ][ $97.61 ][ 22.98% ]

*Sorry for the terrible chart, I'll probably edit this later & put a graphic in its place or something

So, there were more lots sold on Proxibid, but for a slightly lower average price. All in all, both platforms competed pretty evenly. Aha, but how many people registered on each?

Proxibid - 191
LiveAuctioneers - 249

...hmmm...what can we infer from this data. More people registered & probably viewed the auction on LiveAuctioneers (which supports the idea of that platforms primary strength being its marketing division), but there was a MUCH more substantial followthrough on the participants from Proxibid. With 58 fewer bidders, Proxibid managed to sell 27 more lots, albeit for a slightly lower average price.

This data so far is supporting my thoughts on the two platforms fairly well. Basically, in my opinion, a large portion of the value added to any particular auction by LiveAuctioneers, is their marketing. They appear to do a bang up job of driving viewers to a sale posted on their site, attracting attention & making people want to register. However, Proxibid seems to be getting more targeted & focused buyers funneled into the auction - less people who are more likely to bid & win lots.

With that in mind, its time to go further into detail about my likes & dislikes of the LiveAuctioneers application & service.

1. The Auctioneer application
There are a lot of things I have to say about this. I'm going to start with a few big ones. On LiveAuctioneers, the only way to know which bidder bought any particular item (as an auctioneer) is to visit their website, log in as an auctioneer, and look at an End of Auction report. This is problematic for a couple of reasons. Primarily, because of the possibility of disputes during a live auction. When an auctioneer says "sold" it is the completion of a verbal contract, which is legally binding. Typically, in an auction, when a particular item is sold, the auctioneer immediately follows up with the bidders paddle number or bidder number, confirming that the item was purchased by that bidder. This is rather obvious when in a public setting during a live auction, and prevents misunderstandings & disputes by allowing them to be resolved at the point at which they occur. With LiveAuctioneers, it is not possible for the person clerking the live sale on the computer to report back to the auctioneer the bidder's number who purchased the item at the time the item was sold. There is a computer record of the items sale, but speaking from personal experience, I always prefer to have that information publicly stated during the time the sale price is fixed at the fall of the hammer. This way it is not only shared to the public attending the sale in person, but it is also picked up by any recording methods (we tend to audiotape, videotape, or both all auctions we hold). Additionally, this leads to transparency for the general public, further assuring those who attend in person that the bids being relayed to the auctioneer from the online clerk are real & legitimate, and that the sale is not being rigged & there are no games being played with the money or the merchandise. The lack of this information being provided through the auctioneer application is a MAJOR failing of the LiveAuctioneers software in my humble opinion.

There are many other less serious issues with the application. I can state for a fact that the application does work, but there is room for improvement - many small details, which if implemented, will improve the efficiency of the software, making the job of running the application easier for the clerk, and increasing its efficacy at transmitting the relevant data of the active bid, the asking price, & the sale of items back & forth from the auctioneer to the online participants & vice versa. For one thing, as a direct improvement, there seem to be some issues with certain bid increments. For example - if the current bid is $25, and the bid increment is set to $10, the next asking price should be $35. In LiveAuctioneers, using that exact scenario results in an asking price of $30 - apparently the LiveAuctioneers app does not like numbers that end in $5. This can be problematic when trying to maintain speed & accuracy during a live auction. During the sale last weekend, at one point we were selling nearly 90 lots an hour. Trying to keep up with the shifting bid increments is hard enough when software does exactly what you expect it to, but when you input $10 increments, and suddenly the software is asking for $5 increments, you can quickly lose pace & fall behind the current live bid, causing a potential loss of a bid from an interested party on the other side of the computer screen.

All in all, I like the LiveAuctioneers platform. It does deliver a large number of interested participants, and the software is functional, if without a certain elegance & ease of function. With some minor tweaks primarily aimed at decreasing keystrokes & increasing efficiency, LiveAuctioneers could be a great platform. I'm hoping it continues to improve.

Online Bidding Platforms - Part 1

This is a post I've been wanting to do for a while, but I've been wanting to do it right. In order to do so, I'm going to break it up into multiple posts, for better clarity.

For those of you who aren't familiar with the industry term, a Live Simulcast auction, is an auction in which bidding occurs through an online portal alongside of either live onsite/in-house bidding, or multiple online portal sites. As an example, think of a local auctioneer, holding a sale in their building. There may be 75 or even 300+ bidders there on location (depending on the auction & auctioneer). At that sale, imagine a ringperson accepting phone bids on a call-in line. He or she can accept a single call at a time, taking a single bid at a time from each call. In order to take multiple bids on a telephone at once, you would have to have a large number of employees & a bank of phones. Not.Cost.Effective. The modern equivalent of phone bidding, is online bidding. There are a whole host of sites which let auction companies market their cataloged sales to an interested public, typically involving a flat per auction fee to the auctioneer, along with a percentage of the gross sales total from that auction. There are also other fees which can become involved, typically for extra marketing efforts for the benefit of a particular auction on behalf of the online bidding platform. With the addition of an online bidding platform, the same auctioneer who had live competition on his lotted items from 75-300 people, can now effectively spread his marketing on those items to ANYONE IN THE WORLD WITH AN INTERNET CONNECTION. This is a no-brainer. If you have the technical expertise to create a spreadsheet, and can successfully manage your data, you can vastly increase competition, and therefore prices realized, on the items you are selling.

At Mound City Auctions, we've used 3 different online bidding platforms for live simulcast auctions & for online only timed auctions - Proxibid, iCollector, and LiveAuctioneers. Each has its merits, and each its flaws. Additionally, there are several other live online or timed internet only bidding applications to choose from. What my goal over the next several posts is, is to review the three that I've personally used, as well as take a look at others used in the industry.