How online auctions are opening up the market

Comment: Making auctions fairer and accessible to more buyers has always been of concern to auctioneers. In the 1800s, when candle auctions were used to sell shipping routes, experienced bidders would wait until the final flicker of the flame before bidding and winning the auction. To prevent this, an individual was put in place to call the end of the auction to encourage fair access for more bidders. The core buyer market in the room today is largely made up of experienced bidders once again; property professionals, developers and traders. For an industry that routinely expresses a desire to expand its reach beyond 2% of the total property market, more needs to be done to attract new buyers and sellers. Experienced bidders may recoil at this prospect, but an increased market will lead to more properties becoming available for purchase by auction, which is surely a good thing for all. Where some might argue that online auctions will replace traditional ballroom auctions, this only serves to dissuade auctioneers from embracing a technology that will help increase sales, enhance brand recognition and reduce overheads. We built Bamboo Auctions with the auctioneer in mind. We want to collaborate with existing expertise and enhance the traditions enjoyed by a method of sale that offers much to too few in the market. In doing so, we have found some very interesting outcomes. From modest beginnings, our online auction is now being used by different buyers and sellers to those in the ballroom. If we keep this up, and with more auctioneer participation, the 2% market share being achieved by ballrooms could be 10% annually when combined with online auctions. That’s what we are striving for and what is becoming a reality. New buyer markets Women are heavily under-represented as buyers in the room. This is a problem not just for auctions, but for all areas of the property sector. Of our growing database, 30% are women; a number that is increasing each month. There is an entirely new market out there that auctioneers could and should access by using our online auction technology. It is also a chance for the auction industry to lead the charge in the property sector by encouraging greater participation from a more diverse range of buyers. We are also seeing a greater number of female buyers and underbidders (as opposed to registered users). Of the past 100 unique bids placed on our platform, almost 50% were made by women, with almost 40% of auctions eventually being won by women. However, it is not just more women who are bidding online. We are also seeing wider age ranges and varying professions, including crucially, more first-time buyers. Bidders are placing bids online on evenings, weekends and even in the early hours of the morning. This may be because some buyers feel more comfortable bidding from home or from work, or in an environment with less room for impulse bidding. New seller markets In my mind, auctions are not a place to get a bargain, but a way to buy and sell property efficiently. This message has encouraged a variety of sellers – most of whom are new to auctions – to sell their property by online auction. We don’t take instructions directly from vendors. Instead, we work with innovative auctioneers and pass these instructions back to them. We have passed over 200 leads to our auction house partners this year. Many of those vendors had never thought about using auctions before, but were motivated to sell, proved by their willingness to pay upfront fees to online estate agents. We are also helping auctioneers to bridge the time gaps between room auctions. Where sellers might not have the time to wait for a fixed room date, our auction partners can offer a solution that retains that vendor. Again, it’s not about replacing the room, but supplementing the existing service with a low-cost solution that is backed by auctioneer expertise. New and innovative  auctioneers Auction is still a relatively closed industry, operating in a narrow space. Innovation will encourage young professionals to join this sector of the market to drive auctions into the 21st century. We are working with more than 20 innovative auctioneers and together we are growing the online auction market through creative initiatives and strong expertise. A recent article for EG inferred that technology should be embraced and implemented where there is a problem to solve. We completely agree. The biggest problem that the auction market faces is that while online agencies have grown to around 5% of the total property market in a few years, auctions have remained at around 2% for almost a decade. New money laundering regulations are making it even harder for auctioneers. Our approach has been to build automatic buyer verification into our online auction platform: bidders cannot bid without being verified through our process, which takes around three minutes to complete. In a tight market, where supply is short, we help our auctioneer partners by passing instructions and also enabling them to continue to take instructions and not risk losing vendors who don’t want to wait for the next room auction. July and August were two of our most successful months so far. The only problem was it meant that there was no summer holiday for us.