In search of three hulking auto hoist lifts for Crosstown Auto, co-owner Russ Payne went to the same place he might buy books or electronics — the Internet.
If purchased new from an auto-parts store, the lifts might have cost $3,500 to $4,000. But Payne, 42, bought the one-ton lifts sight unseen for $2,000 each at Auction Masters, an online marketplace based in Maple Grove.
"I don't need to see them in person," he said. "Online auctions are a definite timesaver."
More and more, the auction business in the Twin Cities is moving online, with a roster of local online auction houses that includes K-Bid, Hoff, Bid-2-Buy and Auction Masters.
But this isn't eBay. The local houses are primarily focused on heavy, large commercial goods, including restaurant supplies, pallet jacks and cement mixers.
In fact, small-business people such as woodworkers, landscapers, building contractors and printers often use local auction sites to purchase or sell start-up equipment.
"Minnesota was progressive in the early days of online bidding," said John Schultz of Grafe Auction in Rochester and vice chairman of the National Auctioneers Association's Council on Future Practices. "Some Minnesota auction houses were quicker than most in shifting to online."
Blair Moeller recently sold the entire contents of his bakery, Jack's Bakery & Coffee in Brooklyn Park, at an online auction. People from six states checked out the items, Moeller said, and he got rid of everything. "I talked to Auction Masters on a Saturday, and within a week everything was online," he said.
Bidders have to register, but because the auctions are local, they can inspect the items in person before the auction. They also don't have to pay for shipping, since most buyers pick up the items. Buyers pay a premium of about 10 to 13 percent.
Sellers such as Bob Day find online auctions more efficient and profitable. Day, who liquidates business inventories online, used to sell the goods in a retail store. Then he discovered that he could slash expenses by selling online.
"I'm about 20 percent cash ahead with auctions," he said of his Bloomington-based business.
Greg Christian, 58, co-owner of Auction Masters, said 80 percent of the auctions in the Twin Cities are now online, more than in many other metro areas. In Chicago, for example, Christian said 80 percent of the auctions are still live.
But, in general, online is making up a larger share of the nearly $300 billion U.S. market for live and online auctions, said Robert Mayo of Mayo Auction and Realty in Belton, Mo. "The growth in online auctions has exploded in the last five years," said Mayo, a former board member of the National Auctioneers Association. "Online auctions are reaching a bigger audience that would never come to a live auction."
Wide variety
It's not all heavy equipment. Ron White of St. Louis Park has bought and sold sports memorabilia, office supplies and furniture on local sites. "I can get better prices selling and more variety buying," he said.
The big advantage that online auctions have is the number of people watching. K-Bid, the largest of Minnesota's online auctions, has about 150,000 bidders. The Maple Plain auction house sold $20 million worth of merchandise in 2012, said president Ray Caruso. "Consumers can see it and pick it up themselves," he said. "And if they're selling, they don't have strangers coming into their home."
Caruso currently has 540 affiliates who pay K-Bid to list their items and conduct the auction online, but their items are placed for inspection at the original location, not K-Bid's.
Many of the items — bridge-making equipment, for example — are too large to be moved economically, even within the metro area, so they stay put until they're sold at the auction.
At a recent auction of Day's with 722 lots, nearly 100,000 potential buyers looked at his auction and 10,000 of them made bids. "It costs me less than eBay," Day said.
After the auction goes live, bidders generally have a day for viewing, 10 to 14 days to bid and one day to pick up their items.
Live auctions endure
Not all auctioneers are convinced that online is the way to go. While it's true that online auctions don't need the bid caller, ringman, clerk and cashier, some items still call out for personal inspection, said Tracy Luther of Luther Auctions in North St. Paul.
Live auctions still work better for antiques and art, he said. "You can't look up a model number and compare prices on those kinds of items," he said.
Like many large, successful online auctions, Auction Masters and K-Bid started out as live auction houses that converted nearly a decade ago.
Christian started with a simulcast of a live and an online auction. He found the dollars were stronger online. Still, for an auctioneer with 40 years in the business, the shift was painful.
"It was hard on the ego," he said, "to say that a computer can sell better than me."
John Ewoldt • 612-673-7633
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