The CEO has the floor - November

Classified ad or auction – what's the difference?

Many who have previously sold through classified ads are used to setting a high price. They expect a margin of bargaining. The problem is that this price often does not reflect the market's actual willingness to pay. It is more of a wish than a valuation. Often taken from other classified ads - which also only show what sellers want, not what someone has actually paid. 

An auction works completely differently - and this is where the strategic key lies. We do not set a visible starting price, but work with a hidden reserve price - or none at all. The crucial thing is that this price must never be set too high. Too high reservation levels stifle engagement, close the door to bidding and cause the auction to lose momentum. On the other hand, if you set a lower reserve price, you open up for active bidding - which almost always leads to a higher final price. It is a simple but powerful rule of thumb: lower reserve price = more paid. 

For this to work, of course, a strong bidding base is required - and we have that at Bidders Highway.

When, where and how

Another important difference is the time frame. A classified ad is out until further notice – often for months without closing. An auction is concentrated. It has a deadline. It creates focus and pressure. It becomes a deal. So no, we are not disparaging classified ads. But we want to highlight how different these two forms of sales actually are. Auction sales require a different mindset, but those who learn to play with the format – instead of against it – often get better pay, faster deals and above all: the right buyer. And that, my friends, is why we are seeing so many successful deals right now.

By the pen and the mallet

Jacob Odqvist, CEO Bidders Highway