In the course of running your own business, you’re inevitably going to come to a few forks in the road – moments where you have to make a choice, major or minor, that will determine your future path. While missteps are bound to happen at points along the way, it’s important to try to prevent as much backtracking as possible in order to avoid wasting valuable time and resources.
One such fork in the road auctioneers face when entering the world of online auctions is deciding what type of bidding platform to use. Will you join as an adjunct to an established marketplace website, or operate an independent, private-label auction house website? As with most things in life, there are positives and negatives for each option, and there is no clear-cut answer to which is better. The model that will serve your company best depends on several factors. Let’s take a look at some of the differences between the two major models, and see which best serves your needs.
The Marketplace Option
This model is a popular choice for auctioneers whose primary concerns involve assistance in reaching online bidders. For those auctioneers who are starting their business from scratch and have no mailing lists or pre-existing pool of bidders, this can be a particularly attractive option.
In a typical marketplace, all auctioneers join as adjuncts to the same, parent website. There are minor differences between services, but auctioneers will typically either be given their own page on part of the website, and/or allowed to post individual auctions to a collective auction calendar on another part of the site. This allows the auction to be seen by a higher number of potential bidders who may be on the site.
The flip-side of this equation is that any bidders you bring into the marketplace based on your own paid marketing efforts are equally shared with the other auction businesses operating on the site. While joining a marketplace is certainly the quickest, most hands-off method of immediately getting your auctions in front of bidders, the quality and longevity of the bidders you attract may suffer. If being seen as an authoritative, completely independent brand is important to you, then joining a marketplace may also not be your best option. The concept of “Your Brand, Your Bidders” quickly becomes lost in a sea of other businesses competing for attention.
Most marketplaces charge a percentage-based fee per auction, in addition to set-up fees. The rate varies between companies.
The other major option available to auctioneers is the private platform. The extent to which this option is a truly independent operation can vary greatly, with most auctioneers opting to use a third party service to design and host a bidding platform for them, which is then worked into the auctioneer’s own website. Those with greater resources may choose to commission a completely proprietary platform from the ground up, although this is far less common.
For the most part, auctioneers opting for the private option simply pay another company to set it up for them, with minimal effort required on their own part. In this way, the method is similar to the ease-of-use present on Marketplace-based websites, only with an additional veneer of exclusivity and professionalism.
This is not to say that the only benefit is appearance. There are also very real concerns about protecting your bidders’ information, both for their benefit as well as for your own business interests. Whereas companies using a joint Marketplace share all of their bidders mutually, a private platform affords auctioneers the benefit of collecting and nurturing their own, loyal return bidders. This means that you don’t have to worry about all of your hard-earned bidders, gained through your own marketing efforts, becoming one-time users who quickly move on to the other businesses you have brought to their attention.
One potential downside of the private platform is the reduced ease of bidder-outreach. While marketing and spreading awareness of your auction event will be necessary when hosted on a marketplace as well, the burden will be noticeably higher if starting from scratch on a completely private platform. It may thus be best to augment syndication and marketing services with other services as well, if you do not already have contact with existing bidders.
There are many variations on these two concepts, with some auctioneers choosing to utilize parts of both approaches. To fully realize your business’s max potential, it will in fact be necessary to take advantage of all of the various resources at your disposal, advertising your auctions on supplementary sites and hosting them on others. It is far from a hands-off task, and however much work you put in will determine how much value you get back. Choosing your primary hosting method will involve considering the trade-offs that exist between the benefits of each option. Ultimately you will have to decide which is right for your particular business model, and which will best help you reach your future goals.