Wow that went too cheap!

One of the frustrations as an auctioneer is trying to educate the public on the auction method as a whole, but more specifically about understanding market value and market trends. I hear over and over again at auctions how certain things went too high, or too cheap. There is always that person in the crowd that makes the comment about what something is going for on the internet or what it sold for at another sale last month. It truly is a pet peeve of mine. I even hear fellow auctioneers and ringmen saying the same things often. I want to explain market value briefly in this post. What it is and what it isn’t.  Here is a simple definition of market value. Market Value-The value of an item at a sale determined by the buyers at that sale on that day. That is it…it is really that simple, so what is my frustration? My frustration comes from the false notion that just because someone across town sold an item that you are selling for more or less than you did, or that an internet site has the same item listed differently than you just sold yours for means that it should be close to that price as well. Do you understand what I am saying? Let me explain it differently. Customers either buyers or sellers participate in an auction and asses the items there. They try to decide what the items are worth before the selling starts. Often times this includes looking it up on a smart phone and seeing what it has sold for elsewhere or what it is being offered for somewhere else. Once the auction starts they have a preconceived notion about item worth, and when those numbers in their head are not reached they believe it was either too cheap or too high based on the numbers they have established. Now make no mistake as an auctioneer price research is important for our business. It is very important for us to know what items are selling for on the open market. However these are just rough figures to help us with our marketing and selling. They by no means provide a true value on sale day. That is where we come to my overall point. True Market Value on an item is established on auction day. If the auctioneer has done his job to advertise the sale properly the results of the sale will prove true market value for the items in that sale. Let’s use an example to clarify this. Let’s say that Joe Farmer has contracted you to do a farm sale for him. You set the date, advertise the snot out of it, and prepare for the sale. Joe Farmer has a tractor he is selling in the sale, and the tractor should bring about $2000 based on your research. Sale day approaches the crowd pours in and when you get to the tractor it sells for $1500. Did it go too cheap? Did you do something wrong?…The answer is probably no on both. It simply brought market value or to say it like one of my mentors says it. ‘It brought all that it was worth on that day’. No need to beat yourself up or be beat up by the seller. It simply brought its market value at that particular auction. People contract us to have auctions for them, and we provide a set of skills that only we can do, and we have to remember what market value is and that we are not miracle workers. We cannot control market value. Once the auction begins it is truly up to the buyers as to what they are willing to pay for items in that auction. I often say that is one of the coolest things about an auction. It truly is the purest form of the free market. In closing I hope that the next time you think that something went too cheap or too high at a sale remember. It went exactly for what it was worth at that time in that place. It brought its market value.