The Downside of Online Auction Sites

Aside from the ever-increasing fees that have hurt the “little guy” trying to make a decent living or extra income, there is nothing wrong with online auction sites.  In fact, they have opened our eyes to a whole new world we never knew existed just a few short years ago.  We can easily shop globally from the confines of our desk to find comparable items, best prices, and unique finds.  Our online reach can take us anywhere.  That’s the good news.

Anyone can post anything online, often without knowing what the gismo is, what it’s called, with little accountability for errors or condition issues, and certainly without understanding the values.  That’s the bad news.

From the perspective of an appraiser, online auctions bring income to millions who ordinarily would not have that income, but there are pros and cons to consider.

Back in the day before these sites, an item could legitimately be called “rare and unusual” and might sell for $1,000.  Today when you search for the same item online, suddenly there are 2,193 of them across the world, ranging in price from $5.99 to $5,000.

You are witnessing the flooding of the market.  In addition, prices that are either too low or too high are hurting the market.

Because we are all connected online now, there is very little rarity, not many surprise “finds,” and no uniformity, as prices are all over the board.  It is up to the buyer to beware and purchase carefully.

With so many of the same or similar gismos being listed, we must:

  1. Give thought to what that has done to values (and it isn’t good).
  2. Recognize that as elderly collectors pass away and someone attempts to sell the entire collection online (or even at a local auction house), they will inadvertently be flooding the market.  When selling a large collection, a handful of hard-to-find pieces will sell well, but the remainder will sell far lower than expected.

Too much of the same/similar items being dumped on the market and listed online (supply), and not enough people to buy them (demand), drives prices and values downward.

Are we shooting ourselves in the foot?  Yes, but we’re in too deep to make any serious changes now.  We’ve become accustomed to the lure of sales and discounts.

With online auction fees climbing, one has to ask if it is actually worth it, between the soft economy and the fees that eat your profit.  Yet, to many people, it is a source of income they need, to make ends meet.  A Catch-22 situation, indeed.

Other challenges with online auctions are:

  • It takes the fun out of being at a physical auction where buyers get caught up in bidding wars, and items may actually sell for more in person than an online auction.
  • Online auctions take the “social” out of attending local auctions.  When you stop and think about it, online auctions are “anti-social.”
  • Tangible experience.  With an online auction, you can’t personally examine the item(s) you would like to bid on.  You just look at photos and bid accordingly.  With a local auction, you can preview, handle, examine, test, etc. to be sure your bid is where it should be.

As a result, many items from online auctions end up being returned because:

  1. The seller did not properly describe the item, or,
  2. The pictures did not represent the item accurately, or,
  3. The buyer is fickle.

Online auctions are neither positive or negative.  They certainly do boost viewers and more people are shopping from their homes.  But as an appraiser, I wanted to offer some unique thoughts into the world of online auctions.

©2014 The Estate Lady®

Julie Hall, The Estate Lady®, is the foremost national expert on personal property in estates, including liquidating, advising, and appraising. http://www.TheEstateLady.com  She is also the Director of American Society of Estate Liquidators®, the national educational and resource organization for estate liquidation. http://www.aselonline.com.

No part of The Estate Lady® blogs, whole or partial, may be used without Julie Hall’s written consent.  Email her at Julie@TheEstateLady.com

 

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Published in: on June 12, 2014 at 9:30 am  Comments (2)  
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2 CommentsLeave a comment

  1. Good discussion on Online Auctions, Julie. As an appraiser and auctioneer for 35 years and founder of MaxSold.com, an event based online auction product designed to address the unique needs of someone downsizing or settling an estate, I would suggest there are many kinds of online auctions. Further, the volume of product entering the market is more a result of demographics than the vehicle used to sell the increasing flow of product.

    • These are all excellent points and I appreciate your suggestion of looking at it from different perspectives. There are many kinds of online auctions, but must confess I was thinking more along the lines of Ebay and not a professional like you! Your point about the options of dealing with the huge influx of product due to our aging population is spot on. I thank you for your response.
      ~ Julie


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