Transcript for Marketing an Auction
Chris Schwartz: As far as a seller is concerned, do they have any upfront costs to an auction process? Is there costs upfront that they would pay, or is it all at the back end from the proceeds?
Mike Hopper: Yeah. Good question. We don’t charge anything up front. That’s just how I’ve done it for the nine years we’ve been doing this. So, everything comes out of the proceeds of the sale. Are there a few exceptions? There’s always exceptions.
Chris Schwartz: Yeah.
Mike Hopper: But 99% of the sales that we do, all of the money comes out of the proceeds of the sale. So I don’t charge to go take a look at the site and have a meeting. It’s beneficial for me to be able to see if it’s going to be beneficial for both of us. Because they only have so much knowledge on how the auction process works, so I want to bring that information to them when I come take a look at everything that they have to sell.
So it’s twofold. One, I get a chance to see what’s there, what their site looks like, how everything is going to fit. Because if it’s not going to work for us, then I’m going to communicate that, and there’s no harm, no foul. Right? If it’s not going to be the right fit, then we just agree that it’s not going to be the fit, and everybody moves on. And it saves me. I’m willing to do that. It saves me the time and the energy of getting into something that we should have never gotten into in the first place. So yeah. There’s no cost to have a meeting, to talk about the project, and for me to see what’s there and figure out what we can do to help them get done what they want done.
Chris Schwartz: Great. And you mentioned, part of your process is the marketing of the auction. And I can speak to that on the K-Bid side of things, because we work together-
Mike Hopper: Yep.
Chris Schwartz: … in promoting those auctions. And to just give kind of a baseline, K-Bid.com, the website, we get about a million visits per month. So there’s a lot of activity already on the site; there’s a great baseline of buyers who are looking for stuff to purchase.
What we do with SLA when we launch a campaign, is we’re targeting the buyers that need that asset tomorrow. That’s our end goal, is to get the person that needs that lathe in their shop next week; because that’s going to drive the price as high as possible. So we do that a number of different ways. We have email blasts through our system of about 80,000 people that are on our list that we send to. We do very targeted marketing through social media ads, primarily Facebook. We do Google Ads, and depending on the project, we’ve gone outside of the norms with press releases and videos and different things like that. It really depends on the project. Some auctions may need a $400
marketing campaign, and others may need a $2,500 marketing campaign. And it all depends on who we need to reach and the costs to reach those people.
So that’s, as I’m talking about our process, that’s where I think K-Bid and affiliates like Mike at SLA work really well, because we have that expertise of the back-end buyer data. We know how to reach different audiences, and we’ve been doing this for a long time. So when you, just speaking on the marketing aspect of it, when some affiliates will choose to utilize the campaigns that we have, offering through K-Bid, that’s kind of how it works; is we work together using the data, using all that back-end information that we know about what buyers do and what buyers are looking for and who we need to reach. And we kind of put it all together and work together to make sure that the auction is as successful as possible.
Mike Hopper: So, from a pure, from a marketing perspective, can you… Because you know which sales there’s a marketing budget or an advertising budget for, and which ones there aren’t. Correct?
Chris Schwartz: Yep.
Mike Hopper: So, do you see a market difference? And can you put numbers to that, when a sale has a marketing budget and a sale doesn’t?
Chris Schwartz: I can. Yeah. And we do track all that on the back-end. The nice part, say we’re doing a Facebook advertisement; we have all the data of how many people we drove to that specific auction. How many have signed up to bid? How many actually placed a bid, and what those dollar amounts are. So, we’re weighing that as we’re putting together our marketing budgets to make sure it makes sense. We’re not going to spend money if we don’t need to, and it’s going to drive the end results that we’re looking for, which is competitive bidding.
So yes, there is a difference. We see that on the stats page that we share with sellers, sometimes where you can see how many new buyers are participating; and that’s a good benchmark for us. When we have 30, 40, 50 brand new buyers to K-Bid, which we have about 400,000 registered right now, that’s typically a good sign that we’re bringing in more of a retail type buyer, someone who needs that item tomorrow. And we’ve reached them through the marketing avenues that we’ve been using.
Mike Hopper: From my… Just from my personal perspective, I’ve seen if, for whatever reason, the seller and I can’t come to an agreement, and so we don’t do any sort of advertising outside of what the marketplace of K-Bid provides us, I personally, I feel like I can see just in the numbers of what stuff sells for. And I don’t… I can’t really prove that, because it’s hard to prove, because every sale is different. But it just, there’s just this sense of the impact that an advertising budget has when there is one versus when there’s not. It’s pretty powerful. The numbers that we can see when we actually get to the end of the auction, and you can go back and
show, “Okay. This is how many impressions we got. This is how many people visited the site because of this type of advertising that we did.” It’s pretty powerful stuff.
Chris Schwartz: Yeah. And one of the shifts I try when I’m speaking with a potential client is, it’s not… You can’t see it as a cost. It’s an investment in your offering.
Mike Hopper: It is.
Chris Schwartz: Because if you spend $500 and we get 15 new bidders who bid $20,000, the math just makes sense. It’s an investment.
Mike Hopper: Yep.
Chris Schwartz: And bringing in those eyeballs, bringing in those buyers, to create the end result that we’re looking for.
Mike Hopper: And the other two things I would add to that is one, most times, nine out of 10 times, I can point the entire marketing budget to one item that we wouldn’t have gotten the pricing on. And so, the entire marketing budget was worth that one item, to having it for that one item, because of the bidding that took place because of the marketing that we did. That happens almost all the time, where you can pinpoint an item.
And the second thing is, is it’s not necessarily the winning bidder that’s the most important thing. The most important thing is that there was competition for all those items. And even if the new, even if the advertising didn’t bring us the winning bidder, they brought us bidders that were bidding against the person that ended up winning it, which is super powerful.
Chris Schwartz: Mm-hmm (affirmative). Yeah. And in our industry, some argue that the second place bidder is more important than the winning bidder.
Mike Hopper: Right?
Chris Schwartz: Correct. So that person.