Sales at public auction for fine and decorative art and antiques achieved $29.1 billion in 2018 and this years’ Art Market Report 2019[1] contained some interesting findings about the online market for second-tier auction houses, globally.

According to the report, on average ,19% of all sales were online sales for second-tier auctioneers. Of those online sales, the majority (74%) were made via third-party marketplace platforms however, the percentage of new buyers brought to the auction houses declined considerably to 25% of their online buyers in 2018, down 16% on 2017. The share of regular online bidders, buyers who purchased from the auction room repeatedly, increased by 15% to 41%. In the UK online sales transacted on the UK’s primary third-party online marketplace reached an average of 38% of total sales per auction.

Not all auction houses use a third-party platform (a Marketplace), instead they choose software that gives auction buyers the ability to place bids online through their own website (a Direct platform). This is fast becoming the industry standard, with many auctioneers now considering which kind of bidding platform to implement, a Direct platform or a Marketplace auction platform, we look at the Pros and Cons of both below.

A Marketplace auction platform is exactly what it sounds like: auctioneers list their catalogues in an online auction Marketplace right alongside their competitors. Common Marketplace auction platforms include Invaluable, the-Saleroom, EasyLive Auctions and Live Auctioneers.

The Direct auction platform model, on the other hand, allows the auctioneer to create a bespoke solution dedicated only to their auctions and facilitates online bidding through the auctioneer’s website. The leading Direct auction platform provider is Bidpath.


Marketplace Auction Platforms: Increased Visibility but Stiff Competition and Costly Surcharges



There’s often a belief among second-tier auctioneers that listing auctions or running them live via a Marketplace auction platform will lead to increased visibility for their brand. In most cases, although not all, the auctioneers’ brand is barely visible at any stage of the bidding process as the third-party marketplace seeks to promote their own brand over the auctioneers.

In a Marketplace auction platform, all brands, irrespective of the size of their business, are positioned against each other and the ability to stand out in a sea of competitors is limited. In a situation where bidders are browsing a Marketplace looking to buy, big brands have a major competitive advantage against their smaller competitors simply because of brand recognition.

With Marketplace platforms your products are positioned against your competitors, side-by-side. In this model, picture quality, auction estimate and brand recognition are key.

So, what can a small brand do to compete in a Marketplace and stand out from the rest? One strategy brands try to use is to leverage their unique marketing and brand strategies to position themselves apart from, or ahead of, competitors, but a Marketplace’s rigid template structures are often unable to accommodate particular font treatments, colours, videos, and other brand-specific assets.



The customer relationships that deliver the highest value to your brand are the ones with bidders that participate in your auctions frequently, purchase items regularly and therefore, have a high lifetime value (LTV). Your aim is to find more of these premium customers.

Customers that find you on a Marketplace auction platform are taking a chance on your brand and, usually, bid on fewer items. It’s a transactional relationship, where a bidder is often paying a sizable additional surcharge for using the service, very different from your core customer relationships.

New bidders from Marketplace auction platforms need to be monitored to ensure that they are positive buyers for your brand, and economically viable for your business to support. Any bidders that cannot be nurtured into strong, high quality customers may require a disproportionate level of investment to support, relative to the amount of revenue they bring to your business.



Many small brands respond to the pressure of being transparently compared to competitors (particularly larger ones) by purchasing advertising on the Marketplace auction platform.

However, Marketplace advertising on a Marketplace is often not an indicator of auction or brand quality, and, by increasing expenditure on top of costly listing fees, smaller brands end up reduce their profit per lot sold and ultimately have less capacity to invest in future growth.

This situation leaves them at even more of a disadvantage, particularly to larger brands, that are able to compete on the strength of their brand and the perceived quality of their auctions. The effectiveness of Marketplace advertising is further diminished as other brands enter the Marketplace auction platform and pursue a similar marketing strategy, or when the Marketplace auction platforms offer discounted or free advertising to larger auction rooms.



Brands that lack efficiencies of scale may find that complex Marketplace Auction platforms allow for a superior customer service experience for their buyers, as many smaller brands have not established bidder verification and online payment processes that are as sophisticated and cost-efficient as those of a Marketplace.

While brands should consistently be working to improve their bidder verification and online payment processes in-house, it can be worthwhile to take advantage of the scale of complex Marketplace auction platforms while those capabilities are being developed.

Quick Tip: The team at Bidpath have assisted many leading auctioneers in developing their bidder verification and online payment processes.



Brand equity and loyalty are engendered as a positive output of the result of the full range of experiences and interactions a buyer has with your auction room. In a situation where your catalogues are showcased on a Marketplace auction platform, the brand equity that is being built by the bidder is actually the brand equity of the Marketplace provider, not you.

It’s their template, user experience, and—when the Marketplace owns bidder verification and online payment processes —their customer service team. Although you may be able to reach new customers and generate additional sales, without control of the bidder experience, your ability to use online bidding for brand building is reduced in a Marketplace auction platform.

If your Marketplace provider is a well-respected platform designed for high-quality auctioneers, and has an exceptional user interface, it is possible that your brand can benefit by association. However, it is important to continue building standalone brand equity for your company in tandem. Complete reliance on Marketplace auction platforms is generally not a winning long-term strategy.


Direct Auction Platforms: Full Service, Ultimate Brand Control



Your own online bidding platform is a place for your brand to shine. It gives you an auction the ability to focus a buyer’s attention on  the value of your brand, your unique offering, and to provide them with answers to bidder questions without putting a strain on your valuable admin resource. Quite simply, it gives your bidders a seamless and positive experience to participate in your auctions time and time again at your auctions.

Your brand as the star of a one-man show means that you are not forced to make pricing and advertising decisions that are specifically driven by a direct comparison to your competitors’ offerings. It gives you the opportunity to increase your profit per lot and gives you the chance to compete on customer service for both buyers and vendors.



Although Direct auction platforms still require reliance on a third-party provider for maintenance and hosting of the online bidding portal itself, your brand is fully responsible for the service provided to your customers. This ranges from maintaining the bidding experience on your auction platform, with the proper marketing assets and product images, verifying your bidders before the auction, and processing (and chasing down) online payments.

While there are of course benefits to owning every interaction with your buyer base, including building long-term trusted relationships, increasing brand equity, and sophisticated bidder verification capabilities in-house, it is the case that some smaller auction rooms struggle with the up-keep of operational requirements to fully serve their bidders.



When bidders access your brand’s Direct auction platform, they interact with your auctions in a way that is tailored specifically for their needs, and your requirements, allowing you to implement the following bidder-specific capabilities:

  • Offer discounted or free online bidding
  • Style your bidding platform inline with your online brand experience
  • Create levels of administration access for your in-house team
  • Customise your bidder registration requirements
  • Save upcoming lots in to their own account on your website
  • View, pay, and save their invoices online
  • View and save past auction sales results

This granular level of online bidding customisation allows you to give your bidders the exact experience you want them to have and stays consistent to the personal service your team delivers.

While this can be achieved using some Marketplace auction platforms, it is the case that the new bidder who discovers your brand is unable to benefit from this more tailored experience.



While Marketplace auction platforms have advantages in the form of new bidder acquisition, the Direct model is beneficial to strengthen those long-term customer relationships that bring you increased revenue and brand loyalty.

The buyer  who accesses your Direct auction platform is one of high value—they are  a bidder who has done business with you before, has been invited directly to your online bidding platform by you and your sales team, or has accessed your online bidding platform after being exposed to your auctions on your website.

Given the exposure, experience and personal stake they already have in your brand, they are a more qualified customer that skews higher in terms of average lot value purchases, bidding volume and LTV. Customers buying from Direct auction platforms are worth the service investment because they are high value.



One of the biggest advantages  to adopting a Direct auction platform is that, rather than being forced into the restrictions  of a Marketplace template—ultimately building brand equity for the Marketplace provider—the focus is on you: your brand, your auctions, and the experience you want to create for your bidders.

The brand experience you create really starts from the discovery of your online bidding platform; your customers receive a personal invite or come across your platform whilst browsing your own website, setting off a brand journey that you are in control of from the start.

Your online bidding platform is not only a permanent showcase for your auctions, it’s a platform or you to distribute other important market insights which will help you drive new consignments and auction sales whilst growing your own brand. Assets like past auction results build trust and help potential consigners gain confidence in your brand and your track record before reaching out to you directly.


Online Bidding Platforms: Final Thoughts

Ultimately, there are pros and cons to each of these online bidding platforms.

Marketplace auction platforms offer greater visibility, but they also invite increased competition and less flexibility. Direct auction platforms require more effort from the auctioneer in terms of service, but also offers complete control over the bidder experience.

While the Marketplace model does present some advantages, it is ultimately not a sufficient way to serve your high value customers and nurture long-term relationships. Whether you decide to implement only a Direct auction platform or use it to supplement an existing Marketplace auction platform, it remains a key part of an effective online bidding strategy.

As you explore the Direct auction platforms that are out there, we’d love to be in your consideration set. Reach out to an online bidding expert at Bidpath to set up a demo of our Direct auction platform, today.


[1] Art Basel, Art Market Report 2019, Prepared by Dr. Clare McAndrew, Founder of Arts Economics