Conventional sales often aren’t the best way to go about selling goods. When something has a relatively subjective or emotionally-driven value, then a live auction may be the best choice. The competitive, lively atmosphere of an auctioneer-driven event can often contribute to the successful sale of many goods.

What Is A Live Auction?

Live auctions are ubiquitous in the American cultural landscape. Small auctions are common across local areas, but there are many large sellers as well. An auction might be a way that you help your grandmother sell some of her old possessions. Alternatively, an agent might use this technique to sell prime real estate.

The distinguishing mark of a live auction is that bidding occurs openly. Each new bid is higher than the previous one and announced by the bidder, while the auctioneer invites someone to place a higher bid. Auctions aren’t the only type, as silent auctions are also fairly popular. In a silent auction, people write their bids on a sheet of paper and may bid at a slow, leisurely pace over a set amount of time.

However, the sight and experience of a live auction itself is a novel experience, as evidenced by its frequent appearance in movies and television. Virtually everyone is familiar with the scene of auction goers racing to outbid each other as the rapid-fire voice of the auctioneer declares higher and higher bids.

Laws Governing Live Auctions

Auctions are sufficiently common that state governments recognize them as a legitimate, legal form of commerce. Additionally, they recognize auctioneering as a legitimate trade and define processes by which people can register as a salesperson. This enables a seller to seek out a suitable professional to lead the bidding at their own event.

These laws also enforce transparent, honest behavior among buyers and sellers. While the seller has the right to sell throughout the process, they can only modify conditions during an auction if these modifications are explicitly clear to auction goers.

Another important consideration is that some states create special terms surrounding high-value auctions.

In particular, most state governments have passed laws that require jewelry auctions to take place during specific daylight hours and other such stipulations. This is because fake jewelry may be difficult to identify under artificial light, and a jewelry auction represents an opportunity for a seller to defraud the public.

However, jewelry auctions and other sales of legitimate goods are ultimately legal. The current precedent is that while state governments may regulate auctions, that their rulings should not constitute unreasonable interference.

Common Types Of Live Auctions

The auction is a versatile choice for selling goods that enables your audience to buy what you want to sell at the price they’re willing to pay. As such, live auctions are suitable in irregular situations where the market prices don’t match what people will pay. This goes both ways, as people will oftentimes pay more than what a relatively objective evaluation would say that something is worth.

Charity Drives

The altruistic motives behind a charity drive dovetail perfectly with the live auction model. Since people are coming out to help raise money, they’ll experience less resistance to spending higher sums. By encouraging people to compete in a philanthropic setting, they enjoy the rush of placing higher bids while knowing that it’s all for a good cause. A charity auction is something that everyone who takes part in generally ends up enjoying.

Liquidating An Estate Or Business

If a loved one dies and leaves a home full of knick-knacks, old possessions, and other items, it can be difficult to find what to do with them. Instead of leaving them to languish in a storage unit, it’s fairly common to sell them via auction. Since the items may lack a real market value, an auction enables the family of the departed to lean into emotional value and personal appeal.

On the other hand, a defunct business might reduce its losses by selling off hardware and furniture. These are all things that have some value, but may be hard to sell conventionally. Starting a live auction and allowing the community to pay what they’re willing means that the seller is finding some income where they may otherwise get none.

Selling Competitive Assets

If live auctions are a good choice for quickly selling items with a questionable value, the opposite is also true. There are many things that people will pay for in excess of the nominal value of that thing, such as property that’s projected to become more valuable in the future. Specific properties such as homes of historical significance or those of celebrities might also command a high price at an auction.

Goods Typically Sold Via Live Auction

When a live auction is a matter of minimizing losses such as liquidating a bankrupt business, you might sell anything. On the other hand, these auctions might also serve to maximize the profits that a seller can earn. In cases where an item has collectible or sentimental value, even ambitious projections often undersell what an auction can earn. A famous example of this is a collectible LeBron James basketball card, which experts evaluated as worth $1 million. After the end of a competitive bid, it ultimately sold for an incredible $1.8 million.

Collectibles

Collectibles derive their value from the will of collectors to purchase them and their perceived value to investors. Given how much possible sales depend on essentially the whims of a passionate, wealthy class of interested individuals, it’s difficult or impossible to evaluate collectibles. As such, live auctions are perfectly suited to sales of high-value collectibles. By encouraging competition between those who wish to purchase it, the seller has a more advantageous position than in one-to-one negotiations.

Fine Art

The global fine art industry is vast and extremely valuable. To date, it reached a peak value above $67 billion in 2018. While gallery sales are an important component of the fine art industry, auction houses also play an important role. Since costs are driven by what individual, wealthy collectors are willing to spend, fine art benefits from live auctions in a similar manner to collectibles sales.

While identifiable trends and industry volume sales put evaluators on a better footing, auctions can still surpass their predictions. For instance, the top-selling piece of art in history, Salvatore Mundi, had been purchased for $127 million in 2013. Furthermore, the Russian billionaire who bought it was under the impression that he had been overcharged. This notion proved entirely wrong at an auction a few years later, when the painting caught the astonishing winning bid of $450 million.

Memorabilia

Old signs, toys, and any sort of item that holds nostalgic value is suitable for an auction sales. Even if they don’t have collectable value, such items still hold a unique emotional and historical appeal. Since their value is entirely in the eyes of the beholder, sellers can reasonably expect to have the best luck at an auction.

Domain Names

Domain names feature at live and online auctions with a frequency that might surprise many. A good domain name is key to running a successful online presence, and concise, brandable names have greater value. This is both because of their use value and investment value, as many people purchase the rights to a domain name with the intent of reselling later. Since the valuation of domain names is partially subjective, much like art evaluation, they’re often sold via auction. While domain name auctions typically take place online, they often replicate the auction model nonetheless.

While these aren’t the only goods that feature at auctions, they represent how versatile live auctions are. Old keepsakes, collectible items, intellectual property, and art that’s worth more than what most people will make in their lifetime are equally at home in an auction.

How To Run A Successful Live Auction?

When planning a live auction, there are several steps to ensuring it succeeds. The details vary depending on the type of auction and what you hope to achieve, but the basic tenets of a successful auction are the same.

Understand Your Market

Whether you’re running a charity auction or selling real estate, it’s necessary to understand the market. It is beneficial to understand both the going price and the future value for the goods being sold. By doing so, the seller will have the option of setting a reserve price which the highest bid must pass for a sale to occur.

Understanding the market also extends to who will be attending the auction, and what you hope to sell. Older people will make up more of the audience that’s interested in antiques, for instance. If you’re selling antiques, then legacy media definitely has a place in your marketing campaign. On that note, marketing and getting the word out is also vital. The more people that come to an auction, the better odds of success it will enjoy.

Set Realistic Goals

Running an auction requires a certain investment of time and money. Marketing, acquiring a venue, and hiring an auctioneer all come with their own expenses. Before committing to these expenses, you should set realistic expectations with the profit you hope to earn from the auction. In the case of charity auctions, publicized targets can also help motivate buyers to spend more than they might otherwise. However, this is only when the goals themselves are realistic and the buyers are able to feel like their support matters.

Allocate Time Properly

It can take several minutes to auction each item, depending on the competition, starting price, and value of the items. In general, it’s a good rule of thumb to make sure that an auction has at least five or six minutes per item. In longer auctions with more items, it’s worth breaking up the bidding with games, raffles, or other entertaining interludes that give the auctioneer and the audience a break.

Allocating less than five minutes per item can put too much pressure on the auction to move faster, which can lead to running out of time toward the end or getting a lower return on some items. An auction isn’t just a way to make a sale, but also an event that should be enjoyable for all parties.

Skilled Auctioneer

Besides the goods themselves, the auctioneer is the most important element of the live auction. They keep the bidding running smoothly and play a tremendous role in the quality of the overall experience. In essence, the fast-talking, authoritative person up front is the face of the entire event. You can always find and hire a local salesperson at a for-profit auction, but many will work pro bono on charity auctions.

What Is An Auctioneer?

An auctioneer is someone in the profession of leading bids at an auction. While it might seem like talking fast is a key skill, there’s actually much more that goes into this trade. A professional won’t only be able to speak quickly and clearly, but is also immune to the stage fright and awkwardness that might strike an average person. Furthermore, their experience in the world of auctions makes them an invaluable team member who can support planning in the lead-up to an auction.

Necessary Skills

While anyone can become an auctioneer, not everyone can be a great salesperson. It requires good communication skills and a strong presence, as well as confidence and comfort in front of a crowd. These sort of interpersonal, soft skills can be learned, but it helps to have experience and a natural disposition towards them. Familiarity with the behind-the-scenes side of an auction is also valuable.

Required Education

The world of auctioneers is a diverse one that contains a mixture of GED’s, high school graduates, and college graduates. While there are no postsecondary courses that are necessary, a course in marketing or business will provide useful knowledge to get you started.

Average Income

Generally, auctioneers make money via commissions, although they might also charge a basic fee. A capable salesperson can do quite well, as the field enjoyed a median salary close to $70,000 in 2020.

How To Become An Auctioneer?

If you’re interested in how to become an auctioneer, there are several steps for you to begin taking. Since the field hinges on personal skill and reputation, the best way to start is rather old-fashioned. If you can get any job with an auction company, you’ll be able to observe a professional at work and enjoy opportunities to learn about the process.

Once you familiarize yourself with how auctions work, your next step will be to practice as a salesperson and get your license.

You can begin practicing before you gain your license and may benefit from doing so. However, this comes with the caveat that an aspiring salesperson with no license can’t work at for-profit auctions. By working at charity auctions, you’ll be able to build a reputation, gain experience, and gauge your comfort with the work. If you do well, then getting in touch with the local or state authority on auctioneer licensing will be your next step.

However, you won’t necessarily be able to become a full-fledged salesperson immediately. Rules, regulations, and procedures vary by state. In some states, it’s necessary to spend up to two years in an apprenticeship at an auction house first. On the other hand, many states do not actually have any licensing requirements at all.

Once you pass the local requirements, congratulate yourself on becoming an auctioneer. Joining professional organizations, developing subject-matter expertise on certain types of auctions, and other types of self development will help you further your career. There are many state and county-wide organizations for auctioneers, but it’s also worth joining the National Auctioneers Association.

Learn More About Auctioneers And Live Auctions

Live auctions are an exciting, culturally significant practice that anyone can take part in. If you’re interested in learning more about commerce, trade, and many more topics, you should follow VPN.com. If you’re ever in the market for domain names, you can also hire our premium domain brokerage services to find the perfect one for your website.