Company

LOGO

Using Technology for Auctions

Using Technology for Auctions

Practical technology to supercharge your auction business

Technology for auctionsTechnology for auctions• Merchandise projection• Computerized clerking • Photo catalogs • Web sites• Recording your auction

video or audio to computer

• Security and customer identification

• Visual inventory• Document reproduction

• Live Internet auctions• Pre-auction, Internet

bidding• Auction proposals• Auction preparation

checklists• Contact management• Email promotion• Internet-based

Information and Education

Aaron McKeeAaron McKee

• Founder of Purple Wave Auction Co., a fast growing, full service liquidation firm that is effectively utilizing technology in the auction industry

• Managed over 80 auction events each last year• Holds CAI and AARE designations• Graduate of Kansas State University

How has technology helped us? How has technology helped us? • Three year contract to sell surplus property for the state

of Kansas, counties, cities, and schools• Exclusive liquidation agreement with international power-

sports manufacturer; sold 2500 units at absolute auction last month

• Over 800 vehicles sold at unreserved auction last year• Several parcels of commercial and residential real estate

sold to Internet bidders last year

What we sell What we sell • Kansas state surplus • Business liquidations• Real estate• Commercial

equipment and vehicles

• Power-sports, overstock and returned merchandise

• Combined events (consignment)

The growth of our companyThe growth of our company• Fewer than six years ago, we started a

consignment auction with no customer base and no family experience in the auction industry

• We now have over 5000 registered Internet bidders that can bid on any of our auction events

• We have worked for over 2500 different sellers• Over 6000 users are currently subscribed to our

email updates• Our website currently averages over 15,000

unique visitors per month

Buyer distributionBuyer distribution

Web trafficWeb trafficMonthly Pages Opened

0

100000

200000

300000

400000

500000

600000

700000

800000

May-02

Aug-0

2Nov

-02Fe

b-03

May-03

Aug-0

3Nov

-03Fe

b-04

May-04

Aug-0

4Nov

-04Fe

b-05

May-05

Aug-0

5

•Using raw hit count data, we logged over 27 million hits and 123,000 unique visits to our website in the last six months alone

Web trafficWeb trafficHits• Big number which is not a measure of anything

useful, just the total number of files accessedUnique IPs• Number of different visitorsUnique visits• Number of times site has been visitedPages opened• Number of times someone has navigated from

one page to another

Advantages to web trafficAdvantages to web traffic

• Built-in advertising medium you actually own• You maintain telephone numbers, email addresses,

physical addresses, credit card numbers, interests and payment information on buyers to reduce auction payment problems

• Buyers are primarily within driving distance and expect to personally pick up merchandise

• With email and Internet catalogs, communication is virtually instantaneous as opposed to printed catalogs and commercial publications

• All available merchandise, bidding and realized price information is transparent and available to anyone, providing full disclosure for all interested parties

• Once registered, an Internet bidder can participate in any subsequent auction as long at they continue to comply with the terms of auctions

State agencies servedState agencies served• Kansas Department

of Revenue• Kansas Highway

Patrol seized assets• Kansas State Surplus

Property• Kansas State

University• Kansas Attorney

General

• Emporia State University

• Kansas Highway Patrol fleet vehicles

• Kansas University• School districts • Counties• Cities• Airports

The secrets to our company success

The secrets to our company success

1. Predominately unreserved auctions

2. Dedication to listing all lots on the Internet

3. Internet terms that allow us to conduct real auctions

4. No comparative advantages or disadvantages to Internet bidding

5. Buyer retention 6. Historical sales data available

on the website7. Education (NAA, state

association, designation programs, convention tapes, visiting and working with other auctioneers)

Website BasicsWebsite Basics• You must establish a website and you

should do it using your own domain name• NAA, through auctionservices.com, will set

one up for you for free if you need one• Learn to post your auctions on Internet

calendars with searchable inventories• Set up some method for you or a member

of your staff to add dynamic content

What brings customers to your website?

What brings customers to your website?

• Conventional advertising of upcoming auctions• Internet links from existing buyer bases• Pay advertising on websites• Google adwords• Listings on other information websites• Using the many auction calendars including

auctioneers.org, globalauctionguide.com, nationalauctionlist.com, auctionzip.com, state association calendars, local event calendars

What keeps customers on your website?What keeps customers on your website?

• Additional information not available elsewhere (more information than the ad that sent them to the website)

• Pictures• Easy and fast navigation• Functionality (ability to bid or buy on the Internet)• Information that interests them, not how great

you think you are• www.purplewave.com/staff

What brings customers back to your website?

What brings customers back to your website?

• New information every time they visit• Well-managed email subscription updates• Contact from other mediums including

direct mail and print advertising• Positive results from past business

transactions

What information do you have to offer?

What information do you have to offer?

• Upcoming auctions• Pictures of items for sale• List of items for sale, terms, directions,

seller contact information• Past sale prices and information• Staff information and contact information• Information about your company

Dynamic website contentDynamic website content• Several software packages and Internet

providers allow you to do bulk uploads of information and inventories to provide dynamic content, or new information, on your website.

• Calendars and terms pages are posted to your website in a consistent format.

• Many of the providers then allow you to take absentee bids and provide real-time, Internet bidding.

What software do we useWhat software do we use• JBS software called Maxanet for all Internet bidding and

calendars• Auction RPM for clerking and cashiering• Auction Flex for multi-par auctions• Custom software written in Microsoft Access for

inventory entry and data export• We have also used CUS and JBS software for clerking• Auction Flex seems to have an acceptable integrated

Internet bidding setup in one program; however, there are limitations

• We have used Maxanet, Bidspotter, Proxibid and iCollector, through eBay, for live auctions

The basics of Internet biddingThe basics of Internet bidding• Merchandise must be well-defined,

identified, and pictured early in the marketing process.

• Clear terms for merchandise inspection, payment, pickup or shipping, and non-compliance penalties are imperative.

• Bid implementation must be done fairly and accurately.

• Winning bidders must be notified as quickly as possible.

Listing merchandiseListing merchandise• Lots must be well defined and valuable or

they will cause problems. • More pictures result in more money and

fewer questions.• Lots must not change after they have been

listed. Parts cannot be removed and lots cannot be modified.

• We recommend no subjective claims on “as-is” merchandise; only list facts unless you are prepared to stand by them.

Picturing and listingPicturing and listing

• We apply inventory tags with a unique inventory control number to each sale lot. Digital pictures are taken and the lot description is recorded. The description can include all pertinent information, the condition and the technical specifications for the merchandise.

Using your digital cameraUsing your digital camera• Take many broad pictures as you bid an auction to keep

track of what was there and so you can review later.• Take a picture of any documents of which you can’t have

a copy so you can review them later.• Take pictures of the merchandise as soon as possible,

even if you may come back and take a better picture later.

• Take pictures of plates and tags in macro mode with limited or no flash.

• Learn to run photo editing software.• Take the pictures wide enough so you can crop them

later.• Storage medium is cheap, buy plenty.

Picture namingPicture naming• Pictures need to be renamed to match the corresponding

lot number.• Our naming convention is simply the lot number for the

primary lot picture and subsequent pictures are named with the lot number and letter.

• For example, lot 1000 will have pictures named 1000, 1000A, 1000B, 1000C, etc.

• If the pictures are taken in order and the tag is visible in the picture of each item or a picture of the tag is taken after each lot, this process is fairly simple.

• The lot then needs to be entered into the database or spreadsheet that will be uploaded to the Internet.

Entering inventoryEntering inventory• Microsoft Excel is the simplest program for quick

entry for an event.• Most software packages have some inventory

entry module. If it works well, you can input the inventory there and export it for Internet upload.

• It is best if inventory is input once and follows the merchandise through the sale process.

• It is almost impossible to lot merchandise in sale order weeks or months before the sale. It is important to have an inventory number and a sale order number.

Pre-sale lot order tagsPre-sale lot order tags

• Once a sale order has been identified, our database program generates a series of labels that contain the auction date, a short item description, and the sale order of the item.

• These tags are printed in sale order so you can walk down the sale row and apply them.

Digital projection exampleDigital projection example

Advantages to digital projectionAdvantages to digital projection

• As lots are sold at the auction, a digital picture and description of the lot is displayed.

• Buyers know exactly that on which they are bidding and the auctioneer immediately knows what is selling next.

• Increased buyer confidence and comfort raises prices and expedites the auction.

• Digital projection allows items not on site to be sold and picked up by the buyer on location.

• During bad weather, outdoor merchandise can be sold indoors.

Company

LOGO

Multi-parcel auction of 220 acres of agricultural land

from Albert and Julia Olson Estate

Multi-parcel auction of 220 acres of agricultural land

from Albert and Julia Olson EstateOctober 18, 2005 at 5:00pm

www.purplewave.com

TermsTerms• Property will be offered in individual tracts,

combinations and in entirety before being sold. • If you are the high bidder on an individual tract,

you may or may not be declared the winning bidder until the end of the auction so you must stay until the end of the auction.

• Your bids are considered a contract to buy and you will be responsible for honoring them.

• The minimum increase will be $10 / acre.

Company

LOGO

Individual TractsIndividual Tracts Entire PropertyEntire Property Combination and Tract Raises

Combination and Tract Raises

Tracts and combinations offered until the highest value combination

is reached

Tracts and combinations offered until the highest value combination

is reached

Entire Property

SOLD

Individual Tracts

Combinations

Entire Property

Combinations

Individual Tracts

Once there are no additionalraises on any individual tracts

or the combination

Hunting and recreationHunting and recreation• The rolling Flint Hills, local food sources,

springs, ponds, timber and the beautiful views will make every visit a new experience

• Trophy deer population • Abundant turkey • Diverse game population

RanchingRanching• If you are in the agriculture business or

would like to purchase this ranch and lease it back to a local rancher, the property will generate a good annual income

• This area is well versed in agriculture and livestock production which offers the new owner flexibility when determining how to gain the most out this investment

Area EconomyArea Economy• Fort Riley’s population is expected to approach 18,000,

as more than 6,000 military personnel arrive in the coming months. The Army says up to 60 percent will bring spouses and children.

• The Manhattan area is clearly recognized by most as a good place to invest.

• Businesses recognize the value of the excellent workforce, the central U.S. location and transportation access.

• The community benefits from great diversity and cultural offering, extensive education and military resources, competitive economic development incentives and exceptional quality of life.

LocationLocation

Parcel 1 (59 acres )Parcel 1 (59 acres )

Parcel 2 (1 acre home site)Parcel 2 (1 acre home site)

Posted realized pricesPosted realized prices

• Realized prices are posted to the Internet immediately following the auction.

• The buyers and the sellers are looking at the same prices so there is no chance for discrepancies.

• Buyers are drawn back to the website to see how items sold in the past and bid on items they see in upcoming auctions.

• The system lends credibility to the sale when everyone can access the sale results.

• Invoices are automatically emailed to winning Internet bidders at the conclusion of the auction.

• http://www.purplewave.com/sold/

Auction softwareAuction software• Many companies provide excellent software depending

on your needs.• It is very important that you choose a software package

that fits your auction company.• Once you commit to a software package, it is very

difficult to change because many of your internal systems will become dependent on the software and each program is designed for different methods.

• When you change software, much of your historical data is often lost.

• Don’t let the tail wag the dog!• Much like a new spouse or an as-is auction purchase,

you take it home and learn to love it!

Auction softwareAuction software• Clerking software that performs well at a

single-seller, on-site estate auction with fewer than 100 bidders may not be suitable for a consignment, multiple-ring, heavy equipment auction with both on-site and Internet bidders.

• Copy of software_story_0103.xls

Questions to ask prospective software company

Questions to ask prospective software company

• How many companies currently use your software?

• How long has your company been in business?If several hundred are not using it and they haven't been in business for a few years, it probably isn’t very well tested yet and you may have to sort out their problems.

• Contact several companies similar to yours that are using the software to find out what problems they have with the software.

Questions to ask prospective software company

Questions to ask prospective software company

• Be very specific about what you expect to be able to do and focus on the primary functions of the software.

• Ask them about the ability to import and export data. Be specific about buyers, sellers, inventory, absentee bids, realized prices, and whatever other data you may want to use in other programs.

• Software salesmen will almost always say that their software will do everything, but you have to be specific about exactly what you want to accomplish.

• Do not assume anything just because the advertisements lead you to believe the program “will do things”.

• Know as much as you can when you make the purchase because the salesmen will gladly take care of your every need to make the sale, but the tech support department often views the situation a little differently.

Questions to ask prospective software company

Questions to ask prospective software company

• Ask to see the documentation on how to run the software. Ask them how complete it is.

• Ask them about the cost for technical support and updated versions.

• Ask them how often their software is updated.

Internet biddingInternet bidding• Internet bidding can be pre-auction, absentee

bidding; real-time auction webcast; Internet only or a combination of the three.

• Different companies focus on different aspects of Internet bidding.

• The composition, volume and integrity of the existing buyer base will impact the results.

• If you use another company’s buyer base, you will not be building your own; however, you may have more immediate success.

Internet biddingInternet bidding• You can build your own buyer base or rent

one from another company that has an existing buyer base.

• Most live auction companies like Bidspotter, NAA Live, and Proxibid charge a pass-through percentage of 3-5% and an event setup fee.

Internet biddingInternet bidding• You can use eBay by contracting with third

parties for $1500 per event and a pass-through percentage.

• Right now these third parties have a special which provides a free first event.

TermsTerms• It is very important that you specify the

inspection, payment, pickup, location and guarantees in the auction terms

• The more specific you can be about the methods, the less problems you will have with collections

• If customers have some investment, they are much more likely to perform

• Merchandise purchased by Internet bidders can be a liability

DetailsDetails• Good merchandise first• Similar format throughout• Pictures sized appropriately• Calendar on front page• Fast post-auction invoicing• Call registrants personally• Cull bad bidders

Thank youThank you