Let’s Learn
A bit of
History
When did formal auctions begin?
A look at the origins.
The origin of auctions can be traced back to approximately 500 B.C. in ancient Greece when women were auctioned off for marriage.
The auctioneer started the sale with the woman who was considered to be the most beautiful among all the women being auctioned that day.
The auction followed a descending pricing method, beginning with the highest price and going lower until the lowest bid was found, as long the bid price was more than, or equal to, the reserve price set by the seller.
If the buyers could not get along with their new wives, they were allowed to recover their money.
During this period, it was illegal for women to get married without going through the auction process.
That was 500 years before Christ was born.
Rapid Growth
In the United States, early auctions were used to sell farm produce, property and slaves.
The business of auctioneering grew rapidly during the Great Depression when many people became bankrupt and found they had to liquidate their assets in order to survive.
We appear to be facing such a time as this, with the onset and spread of the Covid-19 pandemic.
The oldest auction house in the world is Stockholms Auktionsverk, established in Sweden in 1674.
Soon after the French Revolution in early 1700s, large auction houses like Sotheby’s (1744) and Christie’s (1766) held their first auctions in London to provide organised forums for buying and selling goods at auction.
Auctions helped individuals and businesses affected by crisis to sell their assets quickly.
Times are changing
In April 2021, China announced that it would launch a digital version of its currency, the Yuan. Nigeria’s Central Bank has identified a supplier to take the Naira online.
This is not bitcoin, which is unregulated. Each country’s Central Bank Digital Currency (CBDCs) will be regulated by its Central Bank.
Truth is, if your transaction cannot start and end online – you may be living in the past, and closing your eyes to the future.
Experts opine that industries must adapt or die. Whether offline or online, risks are present. However, the benefits of adjusting the auctioneering trade will outweigh the risks.
Online public auctions can expand the market as Buyers can attend from anywhere. They do not have to take time off work to attend an auction and they can login from anywhere to participate.
Buyer Privacy – No one has to recognise you on the floor of a traditional auction, because the identity of the Buyer is kept private from other buyers.
More buyers means that buyer competition can lead to a premium price.
Auctioneering School
Jones’ National School of Auctioneering in Iowa was the first formal institution to teach people auctioneering.
It was set up in early 1900 by Auctioneer Carey Jones, who saw the need for qualified auctioneers.
With the growth of technology in the 1990s, Auctioneers kept up with emerging technological trends.
They started using computers, cell phones and fax machines to increase the efficiency of their trade.
Some would even take photos of their items and project them onto big screens so that potential buyers could get a clear view of the items on sale.
Visual evidence of what you are selling is important.
AuctionsinKenya.com exists for this reason.
The Future of Auctions?
Circle Art Agency set a record in October 2020 as Kenya’s first art online auction.
The online auction was occasioned by the closure of the Circle Art due to Covid-19 restrictions, prompting a rethink of selling channels.
Circle Art Agency prepared for a small event, with just 37 lots of mostly secondary market and modern works.
To their utter surprise and amazement, buyers came out in numbers – achieving a 90% sell-out rate and recording Kshs.14,000,000 in just a few hours of selling.
at Circle Art Gallery
90% sold out!
A large number of new Clients came on board that day – from Kenya and beyond.
An online auction is exactly what it says on the tin:
Benefits – Buyers can participate from anywhere as long as they have a solid internet connection. This brings convenience, a large market and a smaller time commitment to auction participants.
Is it time to keep up with the changing times?
SOURCES
Types of Auctions (Corporate Finance Institute)
Current Art Exhibition at Circle Art Gallery
Prepared by: AuctionsinKenya.com
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