Traditional auctions are a social staple. The crowd and assets are together in the same place on sale day, the auctioneer rolls down the row and cries for bids, everybody catches up with each other while the boxes of nuts and bolts are sold and they wait for the high-value assets, and the local youth group serves sloppy joes and pie for lunch. Getting the right crowd to show up (and stick around without knowing for sure when a specific asset will sell) is the driving factor in the success of the auction. For this reason, traditional ag equipment auctions have predominantly been confined to one, and sometimes two, narrow time frames each year – essentially when producers don’t have crop production cycle pressures potentially keeping them away from the sale.
But another trend has been making even a smartly-timed seasonal auction less effective than before: fewer and fewer people who make decisions about equipment purchases live by the usual production busy season and the “off season” it implies. Like it or not, buyers are being constantly challenged to be more productive. Implementing new technologies, finding more diverse income-generating projects, creating off-season cash generators and the like, are causing more and more managers to move away from the traditional busy season schedules and toward a constant “super busy” level. Farm owners and key personnel whose time is most valuable are finding it increasingly difficult to justify the investment of time required to attend a traditional ag equipment auction, regardless of the time of year and no matter the social value of the event.
But this trend doesn’t have to be a major challenge for the ag equipment auction. Several innovations are making year-round auction participation possible for even the busiest buyers and sellers. Let’s take a look at some of them.
- Learning about assets via the Internet
Higher quality Internet service to the corners of the world has enabled auction firms to present more information about auction assets. High resolution photos of the asset and key components, detailed asset descriptions, and pertinent documentation like build sheets with option codes, manufacturer specalogs, and service records are all easily shared and reviewed online. An example can be seen in this listing.
- Creating a longer, more flexible time to inspect assets, and encouraging direct connection with the seller
Most potential bidders will wish to do some due diligence before bidding on big ticket used equipment. Inspecting the asset in person, talking to someone with first-hand knowledge about the asset and its history, and even demonstrating the asset in operation are common bidder desires. In traditional multi-seller consignment auctions, learning the ownership and use history of an asset is a major challenge and can keep otherwise interested parties from bidding. To offset this discomfort, most progressive auction firms are presenting seller contact information early in the marketing period – such as three weeks or more before bidding concludes – and encouraging bidders to connect with sellers and the asset under consideration. The advent of Internet listings only helps because it takes away the space constraints of printed sale bills and newspaper advertisements that discourage auctioneers from sharing a deeper level of detail in multi-seller auction events.
- Extending the bidding window
Some auctioneers follow the time honored “fax it in” or “call it in” absentee or early bidding system. But receiving those bids and then ensuring they are properly implemented during the heat of live bidding is an unnecessary administrative challenge. All of the helter-skelter of commencing and ending bidding in a matter of seconds or minutes is no longer necessary. Allowing Internet bidding on any asset as much as three or four weeks before the auction concludes is possible with very little effort from the seller or auctioneer. By posting assets online and beginning to take bids immediately, bidders have the major convenience of entering real-time bids when they want, not just over the phone or in person during the last few moments before the traditional bid caller declares “sold!”
- “Up-to-a-maximum” bidding allows set-it-and-forget-it potential
Perhaps the most powerful tool for the uber-busy equipment buyer is a “maximum bid” feature. Once due diligence is done, an Internet auction bidder may simply enter the highest bid they are willing to commit to, and the bidding system automatically implements bids for that bidder against competing bidders “up to a maximum.” Bidders who know equipment and what it is worth to them can enter their maximum bid and know that the asset will be theirs at or below that bid price, but not above it. Then, the bidder can go on about his business without the need to monitor the bidding progress for fear of losing the asset at a price below what he would have paid.
By themselves, these innovations each offer convenience for auction bidders. Together, they are a comprehensive set of tools that make auction participation possible for buyers who are finding it harder and harder to make time to attend traditional auctions even when the field work is done and the cattle turned out to pasture.