When I started telling my friends and family that we were expanding into the auction industry, I inevitably heard, “auctions are really starting to get popular now.” But the fact is that auctions have existed in their present format for more than two millenniums (anecdotally, they have existed in some form for thousands of years more!). Ancient Grecian documents recorded the salient public sales, to the highest bidder, of women worthy of being wives. Roman auctions – including that of Emperor Gaius Caeser Germanicus who auctioned family heirlooms, accoutrements, and property on the senate floor to raise monies for his army – were an important forum for commerce exchange. Auctions were a common forum for selling spoils of war, family estates, and goods from the East. Auctions became so popular in Roman culture that, in an ironic twist, the Praetorian Guard put the entire Roman Empire up for auction in the 3rd Century.
Given the prevalence of auctions in Europe for centuries, it is no surprise that the first Europeans to arrive in the Americas brought the auction format with them. The sale of land, tools, livestock, and crops were often facilitated through public auctions. This format of transference of commoditized goods ultimately led to Chicago’s famous commodity exchange market (auction-driven) and, in part, the stock exchange. The growing complexity of the auction forum and government oversight ultimately led to auction schools at the turn of the 20th Century; not a second too soon as hundreds were needed to liquidate individual and business assets in the wake of the Great Depression.
As the past century has progressed, auctions have become a more and more popular means to sell goods and assets; all an auction needs is two buyers to bid against each other until a realized price is achieved. Of course, this theory did not play in the favor of the general public as auction houses geared all their business towards dealers. Dealers brought deep pockets to an auction. A commerce arrangement between auctions and dealers allowed auction houses to sell thousands of dollars of goods without outselling the amount of cash in the room and it allowed dealers to monopolize the forum without giving up their margins to the end buyers. But as more auction houses emerged, and private buyers acquired information that made them more comfortable about participating in auctions, the number of buyers and the price of auction goods began to increase. In combating this trend and appeasing their long-standing clientele, many traditional auction houses reserved the front rows of auctions for private buyers. This practice opened private buyers to a bombardment of heckling, harassment, and threats by dealers hoping to instill a lack of confidence in private buyers and ultimately force them out by making auctions an unpleasant experience. Realizing the tremendous buying buyer they had, private bidders withstood the storm and ultimately were able to purchase in a manner that eliminated the middle man. While some auction houses continue to operate in a manner that is designed to reward their dealers and regulars, many more auctions today are comprised of dozens of bidders gathering physically, online, over the phone, through absentee bidding, etc. and a realized price is, in fact, a fair market value for the item.