4 Threats to the Auction Industry
Auction of an estate in Lima, Ohio
4 Threats to the Auction Industry — And Why the Live Auction Still Wins
By Brad McGovern, CAI - “The Sporting Auctioneer”
Let's call it what it is: the auction industry is facing serious pressure, and it isn't coming from the auction house across town. It's coming from the biggest names in tech and commerce. Meta, eBay, Amazon, and Google are reshaping how goods get bought and sold. And they're doing it in ways that push independent auctioneers and small businesses toward the margins.
Here's the part that should give every auctioneer some backbone about it: the economics are on our side. Recent research in mechanism design, the branch of economics that studies how selling formats actually work, found that the live ascending auction is the only format in its class that holds up when a buyer can't fully verify what the seller is doing. Not the sealed bid. Not the descending auction. Not the posted price. Ours.
More on that below. First, the four threats.
1. Meta (Facebook & Instagram)
Meta has become one of the most difficult platforms for auctioneers to work with. Advertising policies read as unclear when you try to comply with them, and land hardest on the categories we actually sell.
What it looks like in practice: Ads get denied with no usable explanation, accounts get restricted or shut down, and auctioneers are left without a meaningful appeal. Meanwhile, large retailers list comparable merchandise in digital storefronts without apparent friction.
The practical effect: Whether or not it's the intent, the outcome is that Meta decides what gets promoted and who gets to pay to play. Categories that are hard to automate enforcement around get swept up. Independent auctioneers are squarely in that bucket.
2. eBay
When eBay launched on September 3, 1995, a good part of the auction industry went into a panic. In hindsight, many industry professionals would say eBay did more to help than hurt. It introduced tens of millions of people to competitive bidding and made "auction" a household word. For a long stretch, eBay was an unlikely friend to the auction world.
Over the last 5 years, that has changed. eBay has pivoted hard toward a retail-style, fixed-price marketplace, and it has narrowed what can move through a true auction. Categories like firearms, knives, and certain collectibles are restricted or banned outright. Sellers with spotless records get boxed out. And eBay has been rolling out extended bidding, the same soft-close technology that gave auctioneers a genuine advantage when we sat across the table from a consignor.
The practical effect: eBay still uses the word "auction," but it functions increasingly as a middleman on every sale, setting the policy and the fee structure. The format survived. The independent operator running it did not.
3. Amazon
Amazon isn't in the auction business, but it is absolutely shaping how the public thinks about buying. Fast shipping, predictable pricing, and algorithmic suggestions have created an expectation that's hard for a small seller to match.
The practical effect: Consumers have been trained to expect "Buy Now," not "Bid Now." If it doesn't arrive in two days, they're annoyed. That mindset makes it harder to explain the value of competitive bidding and true price discovery.
Here's the irony. "Buy Now" is a posted price. The seller names a number and takes it or leaves it. The research is direct on this point: among the credible selling formats they analyze, an actual auction with a real range of bids always generates more for the seller than a single posted price does. Convenience culture didn't produce a better mechanism. It produced a better checkout. Those are not the same thing, and the difference is worth real money to your consignors.
4. Google (Ads & YouTube)
Like Meta, Google applies inconsistent restrictions to auction-related advertising. Try promoting a firearms auction, or even a knife collection. You'll likely meet rejected ads, uneven enforcement, and no meaningful path to appeal. Yet large companies somehow find a way around this.
The practical effect: Small auction houses burn money, time, and staff hours just trying to be seen, while large advertisers with dedicated account representation and category-approved status move through the same system without the friction.
The Research: Why the Ascending Auction Survives
This is the part I'd encourage every auctioneer to understand, because it's the strongest argument we have and almost nobody in our industry is making it.
In 2025, economists Martino Banchio (Bocconi/Google Research), Andrzej Skrzypacz (Stanford Graduate School of Business), and Frank Yang published Dynamic Threats to Credible Auctions. They studied a question that sits at the center of what we do for a living: when a seller knows something the bidders don't, which selling formats can bidders actually trust?
Their term for it is credibility. A format is credible when the seller has no profitable move that a bidder couldn't detect. The classic example is the sealed second-price auction: once the seller has all the sealed bids in hand, nothing stops them from inventing a higher second-place bid and charging the winner more. No individual bidder can tell.
Three findings matter for us:
One: no static format can be both optimal and credible. Once the seller has private information about their own cost or walk away point, which is essentially always true in our business, the researchers prove there is no sealed-bid format that is simultaneously trustworthy and revenue-maximizing. Even the sealed, “first-price” auction fails. In fact, they show the seller in that setting has a profitable, undetectable deviation available with probability one. Every single time.
Two: the English (ascending) auction does work. The live, ascending, dynamic auction, the format our industry has run for centuries, can credibly deliver the optimal outcome. In an ascending auction, the auctioneer can always go back to a bidder who's still in the room. That single feature removes the incentive to manipulate. There's nothing to gain by cheating, so bidders don't have to trust your character. They can trust the structure.
Three: it isn't just "any dynamic format." The Dutch descending auction, in this same setting, may not be credible. This is a narrow result, and the ascending auction is the format that lands inside it.
That's the case for what we do, stated in the language of people who have no stake in our industry whatsoever.
Being honest about the other edge of it
While that sounds great, the research goes both ways.
The same paper shows that in sealed and static formats, the seller is the one with the incentive to cheat. That’s not Meta, eBay, or a fiduciary, but the auctioneer. That's an uncomfortable finding, and it's why I think we should take it seriously rather than quote only the flattering half.
It's also the strongest argument I know of for professional standards. Licensure, bonding, published terms, disclosed reserve practices, and enforceable ethics rules are not bureaucratic drag. They're the reason a bidder can walk into a room full of strangers and put real money on the line.
And here's the advocacy point
The researchers found that public institutions solve the credibility problem directly. Publicly announcing a reserve before bidding opens, publicly committing to a closing time, or publicly disclosing all bids after the sale. Any of these can restore trust to a format that otherwise wouldn't have it. They cite the FCC's spectrum auctions, where every bid and bidder is disclosed afterward precisely so participants can verify the rules were followed.
Sit with that for a minute.
Public rules, publicly announced and independently verifiable, are what make a marketplace trustworthy. That is a description of a licensed auctioneer working under state statute with published terms of sale. It is not a description of an advertising review system that rejects your listing with no stated reason, no published standard, and no appeal.
When a platform moves commerce into private, unverifiable, one-way channels, it isn't just inconvenient for us. It's the removal of the exact institutional feature that makes a market credible in the first place.
Why Auctioneers Should Be Concerned
This isn't really about who gets to run ads. It's about who controls the marketplace.
If independent voices get squeezed out, we lose the open, competitive, fair-market system auctions were built on. The platforms that once helped us grow are building walls and pointing traffic toward their own monetized markets. (I’m not just talking about eBay here…)
The public is already forgetting what auctions actually offer: transparency, competition, and the chance to discover value rather than have it dictated by an algorithm.
What You Can Do
Get involved in advocacy.
The National Auction Association and your state associations have the ability to push back by opening inquiries, meeting with regulators, and pressing for fair treatment. I'm honored to serve on the NAA Advocacy Cornerstone helping lead that charge. But it takes people wanting change to enact it.
Support the NAA-PAC.
The NAA's Political Action Committee is how we build real influence. If you care about the future of this industry, visit NAA-PAC.com and give what you can.
Speak up.
Talk to your state and federal legislators. Tell your story. These platforms may not answer to individuals, but elected officials answer to constituents.
Stay connected.
Show up at national and state association events. Share best practices. Build networks. We are stronger together than we are alone.
Make the case on the merits.
The next time somebody tells you the auction method is a relic, you have peer-reviewed mechanism design on your side. Use it.
Auctioneers should be leading the future of competitive marketplaces, not defending our place in them. We can't hand the marketplace to companies that don't understand what we do best.
I suspect many of you feel the same way I do when I say this industry has been a life-changing experience. Our relationships run deep because we genuinely believe in the auction method of marketing assets to the public.
Let's protect it.
Part II: How to Compete With Amazon Without Becoming Amazon
Everything above is the case for holding the line on our mechanism. This part is about everything else.
Here's the distinction I want to draw, and I think it's the whole ballgame: copy Amazon's checkout, not Amazon's mechanism.
Amazon didn't beat everyone on price discovery. They beat everyone on speed and convenience for buyers. And these are two points we already heavily market to our sellers. The research says our format wins on merit. It says nothing about our invoicing.
So let's fix that.
1. Speed Up Everything
Auction buyers still want a deal, or the illusion of a deal, but they also want speed:
Shorter, tighter auction windows
Faster invoicing and payment processing
Quick, reliable shipping — with tracking
Lesson: Time kills deals. Build systems that move.
2. Make It Easy to Buy
From registration to checkout, the buyer experience should be frictionless:
Mobile-first bidding
One-click payment
Stored payment methods
Lesson: If buying feels like a chore, they'll go elsewhere.
3. Build Buyer Trust
Add layers of confidence to your process:
Detailed photography and honest descriptions
Condition reports, testimonials, reviews
Reasonable guarantees and return policies where they make sense
Consider dropping “AS-IS, WHERE-IS”
Lesson: People don't mind paying more when they trust what they're getting. And the research identifies this specifically. The credibility of the format only pays off if the bidder believes the description and has an easy course of action when the item doesn’t match that description.
4. Leverage Data Like a Pro
Track what sells, what stalls, who bids, who watches. AND ACT ON IT.
Track watchers or individuals who registered but didn’t bid
Customize marketing based on purchase history
Analyze “realized prices” to sharpen timing and catalog structure
Lesson: Data isn't just for tech companies. It's your competitive edge. And in today’s day and age, you can simply prompt AI software to analyze reports from you software in under 10 minutes. Just make sure you’re giving it the right data.
5. Think Like a Buyer
Auctioneers are trained to serve the seller. Amazon wins by being buyer-obsessed:
Clear item descriptions
Transparent terms and fees
Customer service that doesn't feel like pulling teeth
Simple return policies
Fast shipping and home delivery options
Lesson: A satisfied buyer becomes a repeat bidder. Treat them accordingly.
The Line I Wouldn't Cross
Adopt the speed. Adopt the convenience. Adopt the data discipline. But don’t adopt a structure completely different from your business. A great philosopher once said, “When things go wrong, don’t go with them.”
Do not adopt the posted price as your default or convert your auction into a storefront with a countdown clock on it. The competitive, ascending, public auction is the thing you have that Amazon doesn't. And research supports that it's the format that holds up under scrutiny precisely because it can't be quietly gamed.
You don't have to sell out to sell smart.
Let's not just survive this shift.
Let's lead it.
Source(s):
Banchio, Martino, Andrzej Skrzypacz, and Frank Yang. "Dynamic Threats to Credible Auctions." Proceedings of the 26th ACM Conference on Economics and Computation (EC '25), Association for Computing Machinery, 2025. https://doi.org/10.1145/3736252.3742515. Preprint available at arXiv:2509.21439, https://arxiv.org/abs/2509.21439.
Their framework builds on Akbarpour, Mohammad, and Shengwu Li. "Credible Auctions: A Trilemma." Econometrica 88, no. 2 (2020): 425–467.
