Auctions have been around since the dawn of economies, but, like the economy, they are evolving with the rise of technology and globalization. Traditional auctions are becoming less common as modern auctions take over the scene. There is still space for both, but it’s important to know the differences and benefits of each when entering the market.
What are traditional and modern auctions?
Traditional auctions are exactly what you picture when you think of the event of an auction – gavels, auctioneers rambling quickly through items and bids, holding up a paddle to place a bid, etc. Traditional auctions take place in a physical location as a specified time with a time frame of a few hours, dependent on the length of bidding. To participate, bidders must attend the auction in person and, usually, all items for sale will be present as well. Exchange of contracts usually happens immediately and all purchases are often made in cash.
Modern auctions refer to online auctions. They follow the same basic principles as traditional auctions – items are put on sale and the highest bidder takes the piece – but there is much more flexibility to a modern auction. There is no physical location of a modern auction as it takes place through a digital platform. The time frame of the auction is also, usually, much longer as bidders can bid over several days, weeks, or even months from their home or office. Items on sale are also not transported anywhere until they are sold and bidders rely on photos and descriptions instead of seeing the items in person. Once a bid is accepted by the seller, sales are completed within 28 days in an unconditional auction but can take longer to process if it is a conditional auction.
Advantages and disadvantages of traditional auctions
Traditional auctions still have the charm and nostalgia lacking in an online setting but there are some downsides to going the old-fashioned route. The main negative of a traditional auction is the lack of convenience.
Having the auction in a physical location limits bidders and sellers to a single location or forces them to travel with large pieces of industrial equipment either to or from the auction location. These travel needs add extra costs to attending the auction as well as more heavy lifting than necessary. For buyers, this could mean making the trip to a traditional auction and risking not even acquiring the desired piece. For sellers, it limits the market of buyers and requires moving the large equipment for sale with no guarantee that the desired buyer will be at the auction.
The plus side of traditional auctions is the human factor. Buyers get to work with auctioneers in person and sellers get to see the equipment with their own eyes and often talk to buyers before a purchase. Sales are also much faster and often are completed on the day of the auction. This is a big draw for those wishing to quickly complete a sale.
Advantages and disadvantages of modern auctions
Modern auctions have the benefit of their online location. With no physical location of the auctions, buyers and sellers can participate from anywhere with a computer and internet connection. This brings convenience, a larger market, and smaller time commitment to auction participants.
For buyers, this means a greater variety of options to bid on with zero travel or lengthy time commitment. Instead of settling for the piece of industrial equipment that is at one traditional auction, a buyer and scope out hundreds of auctions to find the exact piece they are looking for at a price they are happy with. Buyers can also still contact sellers and the auctioneering platform with any questions on a piece so it isn’t a blind buy.
For sellers, modern auctions take out the need to transport an item for auction before there is a guaranteed sale. Simply posting photos and details are sufficient until the item has been sold. So no heavy lifting and transport until there is money on the table. Sellers also get the benefit of a larger network of buyers to ensure completed sales more often than traditional auctions. These modern online auctions are hosted by platforms that can assist buyers, too, taking out the stress of making the jump from traditional to modern auctions.
As with many technological advances, the main pitfall of a modern auction is the lack of face-to-face interactions. Photos and online support can’t replace seeing something with your own eyes and talking to a buyer in person. Detailed descriptions and buyer guarantees can help bridge the gap but do not fully replace in person sales.
Modern auctions also take longer to complete a sale than most traditional auctions. Sellers usually have 28 days to complete a sale in an unconditional sale and even longer in a conditional sale. Some modern auctions do have immediate completion of sales but then items still must be shipped or collected from the buyer which can take time.
Which should I choose?
No one can make the decision for you when it comes to auctioning off your items or buying equipment. However, for sheer ease and simplicity, modern auctions are a good place to start if you are just getting into the auctioneering market. Many platforms are completely risk free to join and consultants can assist you in setting up your items for auction or advise you in bidding on items. If you are an old pro in the world of auctions and have stuck with traditional auctions, give modern auctions a try and make the comparison for yourself. Each system of auctions has its draws and obstacles but modern auctions will continue to develop with the advancement of technology to become the most expedient and stress-free way to auction materials in the future.