Auctions and Auctioning

By Jim Clapp, Partner asSYSter, LLC
Due to a recent open letter from the New Hampshire Board of Auctioneers published next to our business ad (asSYSter, LLC) in the Auction section of the Manchester Union Leader, my wife and I have found ourselves involved in the controversy surrounding online auctions. In short, the letter from the Board of Auctioneers spelled out in clear language the definition of an auctioneer. Also, the letter stated emphatically that residents of NH who offer to host (list) merchandise belong- ing to others on eBay and other online auctions are acting as auctioneers and need to be licensed. To do otherwise is breaking the law.
On Thursday and Friday we received calls from newspaper reporters ques- tioning us about this issue. Presumably they phoned us because our (asSYSter, LLC) newspaper ad was printed next to the Board's letter. When asked my opinion about the need to be licensed, I responded that "although my life would be easier if I weren't required to obtain an auctioneer's license, I consider it a part of doing business in NH. After all, I am a certified public school teacher, a licensed pilot, a certified board sailing instructor and I used to hold a Real Estate salesman's license. So, adding one more credential is not a big obstacle to doing business; it is merely an expense and is time consuming." Then I added that we (asSYSter, LLC) are willing to abide by the law and are, in fact, doing so right now. (Please see our ads and our brochure).
At the heart of this issue lies a sense of fairness, of equity. After all, why should some folks who auction be required to obtain a license and to pay licensing fees while others, who do not possess licenses, reap the benefits of auctioning? (Many unlicensed people do reap those benefits not only by hosting online but also through mail and telephone auctions.) On the surface this seems like a reasonable request, and to a certain extent I support it wholeheartedly. The solution proposed by The NH Auctioneers Association and upheld by the NH Board of Auctioneers, a division of The Secretary of State's Office, is to declare that the practice of hosting be classified as auctioning and to require practitioners to be licensed auctioneers.
As is often the case when new technologies are applied to old practices, issues arise that were never considered by those who formed the regulations in the past or by those now demanding that old regulations be enforced in such new areas. In trying to fit old regulations to new technologies and marketing strategies, consequences of far reaching implications may emerge. This may be so in the case at hand. It may well be that the NHAA and the state have opened a Pandora's box. I trust that they are prepared to deal with all the ramifications of their requests and rulings.
Okay, now that we have the ground- work behind us let me get to the points that I wish to make. Please do not misread what I am about to say. I am not attacking state regulations nor am I pointing a finger at the Board of Auctioneers. What I do wish to discuss are some implications of the Board's stance.
First, there are a number of natural outcomes to declaring that hosting is auctioning. The way auctioneers obtain and renew their licenses may be effected. It is possible that in directing their attention to NH residents hosting on the Internet, the Board of Auctioneers may have created another inequity, one that will now necessitate changes in the regulations governing auctioneers.
Second, I wish to outline some of the differences between what has been the traditional field of auctioning -- live auctions, on the one hand, and the newer field of hosting on the Internet, on the other. There are some real differences and they may change the face of what it means to be an auctioneer.
Here is my premise - if in fact offering to host the real or personal property of others on eBay or on other online auctions requires an auctioneers license, then this recent twist in the auction business must be considered a part of the overall picture of auctioning. This simple assertion has several substantial consequences.
For one, the test administered to all potential auctioneers was designed to assure competency among NH auctioneers. After all, the state wants our citizens to receive quality service from auctioneers practicing within its borders. Therefore, the NH Board of Auctioneers designed an exam to test the qualifications of those wishing to practice in NH. However, the test has no questions specifically directed at the practice of online auctions, how they are conducted and the steps necessary to actually host an item. Will the test need to change to accommodate this newer approach to auctioning?
Also, since licensed auctioneers are supposed to provide the best service they can to their client, those who are unfamiliar with online auctions and how to actually list items with online auction services no longer can claim to provide a full range of auction services and thereby offer a client the best method of disposing of property. In effect, they are short-changing their clients if online auctioning is not an option..
I am not suggesting that currently licensed auctioneers be required to take a new test. It does seems to me, however, that auctioneers ought to welcome another means of serving clients and of realizing the highest prices possible for their clients' property. They should learn how to host. This they can do by taking a course from a qualified instructor or by serving an apprenticeship under the supervision of an online auctioneer.
Finally, if hosting the property of others is an act of auctioning that requires a license, then participating in this practice under the supervision of a licensed auctioneer should constitute an apprenticeship as defined by the Board of Auctioneers just as working under the supervision of an live auctioneer conducting live auctions does now. Therefore, serving this type of apprenticeship should be allowed as a means of fulfilling the apprenticeship requirement for licensing.
At the moment I can think of only three honorable solutions to this controversy. One, the licensing of any auctioneers in New Hampshire should be abolished. More than one auctioneer has told me that he favors this move. However, this is unlikely to occur.
Two, a second class of Auctioneer's license could be developed - Online Auctioneer. This solution, too, is fraught with difficulties as was pointed out to me by an auctioneer friend. Would Real Estate auctioneers need to be licensed differently, and so on? Or third, all auctioneers must be know- ledgeable in the practice of online auctioning as well as in live auctioning. This would be fair and equitable. Isn't this the point to the letter written by the New Hampshire Board of Auctioneers and supported by the NHAA?
So, where do my wife and I fit into this picture? Our business, asSYSter, currently advertises an online auction listing service. Yes, we solicit hosting. At this point I must state that hosting items for others constitutes very little of our business. Right now the only items we have listed for auction are our own. Quite frankly, it doesn't make much money and, in some instances, has actually cost us money. We would have been better off to list our own merchan- dise. However, since we did this in the past and plan to continue to do so in the future, it is important that we conduct business legally and we do intend to continue to comply with NH statutes.
When we began to solicit items for host- ing online, several auctioneer friends explained the law to us and were willing to discuss their positions on this matter in a helpful, encouraging manner. Because we want to operate legally in NH and wish to remain on the good side of the auction community, including auctioneers, we have taken steps to conduct our hosting legally.
Presently we operate under the supervision of auctioneer David Cross (NH license #2487) with whom we have entered into a business arrangement and under whom we are serving an apprenticeship. In addition, I have begun the procedure to obtain an auctioneer's license myself, as well as applying to the NH Auctioneers Association for membership.
Now, consider another angle on this issue, one that highlights the confusion and inequity that exists presently. Not everyone shares the position adopted by the NHAA and the Board of Auctioneers. Even as the Board was preparing its open letter declaring the hosting of other's property to be auctioning, we (asSYSter, LLC) were not being treated as auctioneers by other segments of society. I speak specifically of print advertising. When we approached the Boston Globe and the Manchester Union Leader about advertising online auction services in their auction sections we were met with negative responses. Why? They told us that what we were advertising were not auctions and that we were not auctioneers. Apparently they hold a different opinion than the New Hampshire Board of Auctioneers does.
Fortunately, after some discussion with the folks at the Union Leader, we were allowed to place a carefully worded ad in their Auction section. For this we thank the farsightedness of the classified/advertising staff there. How- ever, the Boston Globe still refuses to consider our request although they are quite willing to stick our ad in some other classified section for all the good that would do us.
If online auctioning requires an auctioneer's license because it fits the definition of auctioning, then online auctioneers should be allowed to advertise where live auctioneers do. Wouldn't that be fair and equitable?
This past weekend, as I helped celebrate my niece's tenth birthday, I looked down at my plate containing that traditional birthday treat - cake. A thought suddenly struck me. You can't have your cake and eat it too. If hosting the property of others on online auctions is considered auctioning and those practicing it must learn about, be tested on and comply with the regula- tions binding live auctioneers in NH, then live auctioneers should likewise be required to learn about and be competent in the practice of online auctioning. Wouldn't that be fair?
Earlier I said that hosting items for online auctions and auctioning live had some real differences. Here are two for you to consider:
Rate of auctioning. While I under- stand that there is a great deal of work involved in preparing for a live auction and that the rate at which the gavel falls is not a true representation of the rate of auctioning, nonetheless a live auctioneer can sell considerably more items per hour than a hosting auction- eer can. Advertising, negotiating with clients, collecting consignments, record keeping of consignments, etc. require time. Since these activities are much the same in both methods of auctioning, we needn't consider them here. However, when a live auctioneer steps up to the block and begins to sell, he or she usually does at a rate of from 80 to 120 items per hour.
When my wife and I sell through an online auction the rate is closer to two items per hour. Mostly this is because the listing process is so extensive and time consuming. In addition there are other services we are expected to provide that most live auctioneers don't, like shipping. That's right, generally we are responsible to ship items in our possession and that means packaging them, calculating shipping rates and then actually shipping them. Sometimes we end up negotiating shipping costs as well as the sale price with buyers. In the meanwhile, and that meanwhile can run as long as 10 days, we must answer email from interested parties, etc. This is probably fairly similar to a live auctioneer answering questions about merchan- dise listed for an upcoming auction.
Computer skills. Now, I am not suggesting that live auctioning does not require skills. To be successful certainly does. I have no intention of standing up in front of a live crowd and going through the process of soliciting bids, raising them incrementally and keeping track of the bidders. To me that is too unnerving. However, after having taught How to eBay, PC Fundamentals, Marketing on the Web and Intermediate Microsoft Word classes over the past several years, I now appreciate just how much knowledge a person needs to have in order to successfully list items for online auctioning and just how ill-prepared most folks are to do just that.
Capturing and editing images is a skill unto itself. Do you know in what format they need to be - jpeg, tiff, gif, mpeg, etc.? What about image size? Here we mean pixel density as well as linear dimensions of that image.
Then, how many of you could ftp those images to your server space and correctly refer to the URL of those images when needed in the online listing form? Oh yes, don't forget that many browsers are case sensitive when it comes to URLs, and that includes the file extensions too. Get the picture?
Again, don't misunderstand me. I am not suggesting that because the technologies used and the rate of selling differs, folks hosting the property of others for online auctions be excused from the licensing procedure. I am not. Well, I admit I would like to be exempt, but that is not likely to happen. What I am suggesting is that by flexing the long arm of the law, the NH Board of Auctioneers has created a new set of questions and problems to answer. The act of simply declaring that people who host the property of others for online auctions need to be licensed auctioneers has, in fact, raised other issues. Inequality may still exist, and now the auction community and the state Board must come to grips with them. Such is the nature of progress. So, let us now move forward in our quest to provide the highest quality auction services by New Hampshire auctioneers.