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  • Writer's pictureMike Brandly, Auctioneer

Should the online platform accept starting bids, max bids, fixed bids or what?

Susan is willing to pay $500 (although she would love to pay less) to purchase a Mossberg 464 Lever Action Rifle. Susan’s shopped around, and about the least expensive new Mossberg 464 she’s seen is $425.

She sees one “offered” by an auctioneer in an online-only auction. She puts in her bid of $500. As Susan places her bid, she wonders … how will my bid be executed? Will the software …

  1. Bid only after the bidding begins otherwise, and as high as it needs to for her, but not more than $500?

  2. Start her bid at 1/2 (or some other fraction) of her $500 maximum, or at some fixed starting bid?

  3. Alert the auctioneer to her $500 bid, and allow the auctioneer to bid against her up to $500 to ensure she pays the maximum?

  4. Bid $500 for her and then require the next bidder to bid $525?

How can Susan find out the policy?

What many auctioneers (and online platforms) seem to be less than mindful of is … this policy involves an agreement (contract) between Susan and the auctioneer (or online platform) on behalf of the seller.

However, in practice it’s more often the auctioneer (or online platform) dictating the policy in order to place a bid, and the bidder left with one of two choices: either acquiesce or be denied the privilege of bidding.

And, that’s fine — except, most of the time the bidder either doesn’t know the policy or the actions of the auctioneer and/or online provider don’t match the policy; it’s hard to have a meeting of the minds when one party doesn’t know the procedure.

It wouldn’t be hard to imagine that the software and/or the terms & conditions Susan sees says her bid will be placed competitively, but the bid is provided the online provider’s personnel and (maybe the auctioneer) ahead of the auction, and magically there is another bidder willing to pay $499 …

Or worse yet, there is no mention how her bid will be handled and then she’s later notified, “Well, you got that gun for $500 exactly …” when in fact there might have not been any other bids.

Does the “type” of auction matter? Maybe — in that in an absolute auction, the auctioneer and/or online provider can’t legally bid for the seller outside of a forced sale; if the auction is with reserve, then the seller-side might cite legal bidding for the seller and use that to ensure Susan paid $500.

The online auction world has blurred the procedures for auctions a bit — often with dozens of pages of terms and conditions, and maybe nobody for the bidder to talk to prior to placing a bid. The answer to Susan’s question may be somewhere in those 43 pages, or not, and she may just consent and place the bid regardless.

We wrote about one such online provider providing the maximum bids to its auctioneers — and our conclusion that there was no more than one reason to do that which would involve the auctioneer making sure that bid was maximized:

It would seem auctioneers (live and/or online) would want Susan to bid at subsequent auctions. Yet, by not treating her in an open, transparent and reasonable fashion, we think the most any auctioneer could hope for would be for her to pay for her Mossberg 464 and likely never participate in another auction … maybe ever again?

As we suggested in our prior article: For auctioneers and online auction providers, it’s important to see the forest and the trees. You see, for Susan, it’s as simple as looking elsewhere for her next gun purchase.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.

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