The Boiling Frog Phenomenon. The Creeping Changes Taking Place Within The Auction Industry Right Now.
As the story goes, researchers found that when they put a frog in a pan of boiling water, the frog quickly jumped out to safety. On the other hand, if a frog is placed in a pan of cold water, which is then slowly heated, the frog unconsciously adapts its body temperature to the gradually increasing heat and remains where it is. Eventually boiling to death.
While the results of the experiment are questionable, it is a useful metaphor to illustrate the creeping changes taking place within the auction marketplace platforms right now and the threats posed to the auctioneers who exclusively utilise their products.
If you look at the history of the auction business, how it has changed over the past thirty years and the new entrants into the market, you can get a pretty clear picture as to where it is going.
For much of history, auctions were conducted in the traditional way, with a charismatic auctioneer working the room for bids in order to realise the maximum value on behalf of their trusting vendors. Over time, technological inventions such as the telephone, the digital camera and coloured catalogue printing increased the propensity for absentee bidding as a way for auctioneers to reach more buyers in an increasingly globalised world.
The fees charged by auction houses at this time were modest and reasonable, in fact, many auctioneers did not charge a buyer’s premium at all, until in 1975 Christie’s and Sotheby’s sent shockwaves through the industry by introducing a flat 10% buyer’s fee.
Following the invention of the world wide web, many leading auctioneers quickly embraced the internet, first by launching a website and later by developing their own in-house online bidding platforms, investing hundreds of thousands or even millions of dollars, and pounds, in an attempt to broadcast their auctions live online. However, with the internet in its infancy, unstable connections and a slow adoption rate made online bidding a time consuming and prohibitively expensive exercise to tackle individually.
Learning this, many auctioneers chose to engage with the newly launched auction marketplace platforms who aggregated several auction…