Online auctions are gaining popularity, but the
traditionalists are still sold on the idea of live auctions that guarantee a
good show, with emotions and bids running high.



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In an industrialized area approximately 30 minutes from
Sandton, the commercial hub of Johannesburg, is a shining fleet of trucks,
parked and ready to be sold to the highest bidder. 



The sun reflects off the windshields in the direction of the
registered bidders as they sit under red outdoor umbrellas at the entrance of
the property.&nbsp; 



Some opt for refreshments, while others make small talk with
their competition.



A man uses this time to make phone calls to a mechanic, who
discourages him from making a regrettable bid on a “non-runner”.



He runs towards the towering fleet of trucks, where he joins
the eager buyers as they take a final peek before the auction begins. 



We are at Aucor Auctioneers’ popular commercial auction, at
their head office in Midrand.



After spending four hours traveling to Johannesburg from
Nelspruit (in South Africa’s Mpumalanga Province), for the auction, Charles
Malibe gets into a heated bidding war that lasts no longer than a minute but is
packed with plenty of fervent action.



<div class="wp-block-image"><figure class="aligncenter"><img loading="lazy" decoding="async" width="930" height="616" src="https://www.forbesafrica.com/wp-content/uploads/2019/07/Auc7.png" alt="" class="wp-image-41344" srcset="https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc7.png 930w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc7-300x199.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc7-600x397.png 600w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc7-768x509.png 768w" sizes="(max-width: 930px) 100vw, 930px" /><figcaption>Charles Malibe in a heated bidding war for a truck. Picture: Gypseenia Lion</figcaption></figure></div>



It is noon and an overjoyed Malibe has just won a R465,000
($32,401) bid on a second-hand truck. 



“I attended my first auction three years ago. Sometimes you
get it wrong and sometimes you get the right stuff at the right price. It is
good to be exposed to new things. I went to Durban once, but I did not get
anything there. It was not a waste. It is not only about getting things, it
gives you exposure,” he says. 



As Malibe heads back to Nelspruit, the auctioneer remains
chanting until the last vehicle is sold, with the crowd getting smaller with
each purchase.



Wasim Babamia, Aucor Auctioneers’ multimedia consultant,
manages the national marketing for the 51-year-old auctioneering company. 



Digitalization has disrupted traditional norms of
advertising, and has made the industry more accessible for both buyers and
sellers.&nbsp; 



“Selling any asset boils down to supply and demand. The
advantage of buying in an auction is cutting out the middleman, saving that
money and getting something of real top value,” he says. 



<div class="wp-block-image"><figure class="aligncenter"><img loading="lazy" decoding="async" width="927" height="616" src="https://www.forbesafrica.com/wp-content/uploads/2019/07/Auc5.png" alt="" class="wp-image-41345" srcset="https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc5.png 927w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc5-300x199.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc5-600x399.png 600w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc5-768x510.png 768w" sizes="(max-width: 927px) 100vw, 927px" /><figcaption> Wasim Babamia, Aucor Auctioneers’ multimedia consultant. Picture: Gypseenia Lion </figcaption></figure></div>



&nbsp;Marketing the call to
action remains a vital component for the business.&nbsp; 



“Social media has to be on point when we market a particular
auction,” Babamia says.



Instagram, Twitter and LinkedIn are some of the biggest
platforms, apart from the traditional pamphlets and website advertising
strategies. 



According to Babamia, online bidding has pulled in more
numbers over the past four years. 



He sees a rapid transformation in the auctions landscape in
the foreseeable future. 



According to a South African Institute of Auctioneers (SAIA)
report, Gauteng is the highest province of interest with over 6,000 potential
buyers (for all kinds of auctions including residential properties, retail
vehicles, jewelry and collectables) on its website, while the Northern Cape is
the lowest with just over 1,000 buyers. 



The traditional means of auctioning have had to make way for
digital platforms that have been steadily increasing over the last decade. 



SAIA records close to 100,000 visitors to online auctions in
2010; the first half of 2019 is already at 400,000 visitors. 



Last year’s record 600,000 visitors reflect that the online market could be just as lucrative as the live auctions. 



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As the state of the South African economy remains uncertain,
Babamia suggests that auctioneering will always provide a cheaper option to
consumers. 



An industry that has been in existence for more than 2,000
years continues to grow despite its many iterations over the years. 



Ancient Greek records on auctions dating as far back as
500BC show women were auctioned off to become wives. 



Auctions were popular for family estates and the selling of
war plunder in Rome. 



As a result of the great depression in the 1900s, the United
States opened auction schools to generate income as businesses and individuals needed
to liquidate assets to withstand the economic crisis.



In recent times, market trends have changed dramatically to
adapt to socioeconomic norms. 



A shift to online auctioneering has been a great development
and contributor to the fluid industry.



&nbsp;Orbis Research
reports that the global online auction market is expected to grow during the
period 2018-2022 with a 7.2% compound annual growth rate. 



“Another major trend witnessed in the online auction is the
immense impact of artificial intelligence (AI). AI’s main role in an online
auction is to perform different tasks such as processing internal operations,
customer-service inquiries, delivery and product packaging. In the last years,
AI has instigated a gradual shift, from conventional auction to online auction,”
the report states. 



The increase in sales of art-based goods through online
auctions is a key market driver. 



Traditional live auctions, however, are still a preferred
option for bargain-hunters, despite the global steer towards digitalization. 



This is according to fine art specialist Luke Crossley who
manages Stephan Welz &amp; Co. in the affluent northern suburb of Johannesburg,
Houghton Estate.&nbsp;&nbsp; 



<div class="wp-block-image"><figure class="aligncenter"><img loading="lazy" decoding="async" width="416" height="617" src="https://www.forbesafrica.com/wp-content/uploads/2019/07/Auc4.png" alt="" class="wp-image-41346" srcset="https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc4.png 416w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc4-300x445.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc4-202x300.png 202w" sizes="(max-width: 416px) 100vw, 416px" /><figcaption> Fine art specialist Luke Crossley who manages Stephan Welz &amp; Co. Picture: Gypseenia Lion </figcaption></figure></div>



Moving to simpler models will improve the industry by
providing a greater competitive edge, he says. &nbsp;



“There is a growing interest and understanding of auctions
across a broad section of people where, maybe, a couple of decades ago it was
seen as just for the very rich people doing very rich things. 



“People are realizing that it is a great way of finding
weird and beautiful objects, artwork and furniture at quite reasonable prices,”
he says. 



The increase of auction houses in South Africa offers a
variety to buyers and sellers, with SAIA having 80,546 members registered by
April 2019. As a result, the art and design market is at an advantage. 



“The South African art market on auction is always evolving
and broadening. The importance to history and art history is being realized and
there is a growing interest and demand for these. It is encouraging a lot of
the younger artists working with galleries to look at the history and heritage
of artistic practice in this country,” Crossley says. 



“With growing appreciation for South African and African art
overseas, a couple of international houses based in England regularly do sales
of more historical work. The audience overseas means a lot for the artists, the
country and the future.” 



Selling or buying art on auction engages the audience as
well as the creator. 



“The gallery, thus, becomes the primary market where young
artists can build their careers; whereas auctions and private individuals with
a passion for art can sell work they own, re-invest in other artists, or buy. 







“It creates a second life for an artist once they have had
their exhibition. With an auction house, you can reach a broader audience.
Auctioneering is a great way of indirectly promoting the artist,” says the art
specialist.&nbsp; 



A mobile museum acts as a platform that simplifies the
process and eases access to the market for artists and admirers. 



A world of opportunity, at the click of a button, gives
upcoming artists a chance to compete in the art market. 



Art lovers can sit in the comfort of their homes, evaluate the work before-hand, request for condition reports and place a bid while monitoring the action on screen.



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“Auction houses, historically, would work with physical
catalogues. We still do catalogues but with the possibility now to create an
app for the auction house to allow interaction directly with the audience. 



“It seems simple now with email, but previously, you would
write a letter and take a photograph and get it delivered. Now, there is an
ease of communication,” Crossley says. 



On the other end, Jerry Horn from AuctionInc. argues that
despite the digital migration in South Africa, live auctions are still the
safest and simplest way for auctions to take place. 



Online platforms also lack interpersonal interaction. 



At the moment, live auctions are still more popular, he
says. 



“Online auctions are impersonal, you wait till the time is
up and if you get it, you get it, if you don’t, then you don’t. There is no
emotion attached to it. Live auctions still create the hype… humans are
emotional creatures,” Horn says. 



We meet Horn and fellow broker Disa Smuts at a three-bedroom
house which is being auctioned for R1.5 million ($105,301) at an upmarket
security estate in Pretoria called The Wilds Security Estate.



<div class="wp-block-image"><figure class="aligncenter"><img loading="lazy" decoding="async" width="927" height="615" src="https://www.forbesafrica.com/wp-content/uploads/2019/07/Auc6.png" alt="" class="wp-image-41347" srcset="https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc6.png 927w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc6-300x199.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc6-600x398.png 600w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc6-768x510.png 768w" sizes="(max-width: 927px) 100vw, 927px" /><figcaption> Disa Smuts. Picture: Gypseenia Lion </figcaption></figure></div>



Buyers meander in and out of the house as they assess the
property. They pry further as they look through windows, open cupboards and
check light fixtures, along with all the other fittings of the house. 



Bidding begins as the amount crescendos to the millions. 



Finally, a buyer who is pleased with the finishing of the
house, makes the highest bid at R1.5 million and this bid concludes the auction
for the home, as the final hammer drops.



This is a success for the auctioneer and a gloomy moment for
latecomers who only have the luxury to dawdle in the empty rooms they could
have owned. 



Hennie Swart arrived at the double-storeyed home just after
the conclusion of the auction, and he was not going to let this bargain slip
through his fingers. 



A counter bid amounting to R1.8 million ($130,654) makes him
next in line if the first deal does not take place for any reason.&nbsp;&nbsp; 



Swart, who is a property developer, says purchasing on auction offers a discount of 10% to 20% less than market value. 



Today’s offer is a cheaper buy than Swart’s most expensive
purchase of R2.1 million ($147,428) for a three-bedroom home. 



“I have got a property portfolio and I try to expand my
portfolio by buying property on auction. I normally look at simplexes that are
normally safer because the possibility of getting a tenant is higher,” he says.




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Attending live auctions gives him a first-hand experience of
the area, the property and the potential return on investment.&nbsp; 



A common practice Horn encourages. 



Online bidding may be convenient but competition on the
floor is good for business, and it puts on a good show. 



Bids increase by the second. 



Four figures speedily turn into six figures. 



The auctioneer chants vigorously while his focus is fixed on
the audience. 



Sweat drips from his nose, and all the attention is directed
to a woman at the back of the room. 



The room falls dead silent.



“And sold to the woman in the far right!” 



The audience cheers on, as she graciously leaves the room.



It is this fervent excitement that people enjoy.



Time and competition are the most important factors to
prioritize in this business.&nbsp; 



The aim is to spend less while encouraging
competitiveness.&nbsp; 



“You don’t have ‘show days’ that take up time, and with a
six-week [administrative] process before the auction date, people come and bid
and the property is sold on the day. 



“People bid against each other to get what they want. Most
of the time you get more money than what you are asking for,” Horn says.



South Africa’s market, promising as it is, has room for
development. 



“If you go to countries like Australia and New Zealand,
there are no ‘show days’, there are no real estate agents, everything is done
by the auction basis,” Horn says. 



This cuts out the middleman, and thus minimizing costs,
making the purchase more lucrative for the buyer. 



<div class="wp-block-image"><figure class="aligncenter"><img loading="lazy" decoding="async" width="927" height="616" src="https://www.forbesafrica.com/wp-content/uploads/2019/07/Auc2.png" alt="" class="wp-image-41348" srcset="https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc2.png 927w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc2-300x199.png 300w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc2-600x399.png 600w, https://cms.forbesafrica.com/wp-content/uploads/2019/07/Auc2-768x510.png 768w" sizes="(max-width: 927px) 100vw, 927px" /><figcaption>A bidder places a bid for an item on auction. Picture: Gypseenia Lion </figcaption></figure></div>



Whereas in South Africa, there are other factors to
consider, such as real estate agent commissions, bonds and prime lending rates
which make the process arduous and more expensive for the buyer.&nbsp;&nbsp;&nbsp; 



Horn frequently travels to Angola, Tanzania, Zambia and
Kenya for business. 



“Property is a lot more expensive up there because it is
dollar-related,” he says. 



The economic climate of a particular region or area
determines the value of property. 



Property auctioning depends largely on adequate research and
comprehension of the landscape. 



Buyers often become sellers after acquiring an understanding
of the industry. 



Smuts, who sold her 18-year-old business on auction, decided
to become an auctioneer herself.&nbsp;&nbsp; 



The uncomplicated nature of transactions is what attracted
her, she says. 



However, clients usually call when their property has been
on the market for too long and the asking price becomes too high for the
market. 



“The owner will give a sole mandate to give a right for the
sale of the property and make sure that it goes to the market correctly. The
auction is done on the day, and make sure it gets the highest price. The
auctioneer’s job is to protect the property’s value,” she says. 



Protecting the interests of all parties involved should be
the auctioneer’s priority, Smuts adds.



&nbsp;Whether you’re buying
from the comfort of your home while basking in the sun by your swimming pool,
or you just lost out at a live bid, chances are, it can’t get any cheaper than
at an auction.&nbsp;

Tag: Stephan Welz & Co

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Going Once, Going Twice! The Evolution Of Auctions