Steffes offers new online bid platform: IQBid.comFARGO, N.D. — A long-standing auction family in the Red River Valley says their online bidding system, in place since last November, is another tool for farmers to buy and sell equipment and land.
By: Mikkel Pates, Agweek
FARGO, N.D. — A long-standing auction family in the Red River Valley says their online bidding system, in place since last November, is another tool for farmers to buy and sell equipment and land.
Scott Steffes, president of Steffes Auctioneers Inc. of Fargo, N.D., and Clark Sather, head of the company’s online division, say the company’s new IQBid.com site has quickly grown to about 20 percent of the company’s sales. Like many standard systems, IQBid.com allows sellers offers an online auction with bidding 24 hours a day.
An advantage over other online systems, they say, is that IQBid allows bidders to more easily handle numerous lots at once, with bidding periods that automatically extend to ensure that a “realistic auction process is completed.”
The Steffes and Sather are no rookies in this field.
Steffes Auctioneers was started in 1960 by Robert Steffes. Scott has been running the family business since 1994. In late summer, the company has plans to move into different headquarters on east Main Avenue of West Fargo, N.D., in a former implement dealership location.
Sather is from the Greenbush, Minn., area, and had his own auction business there for 20 years. An innovator in Internet auctions, Sather ran the first live auction webcast of farm equipment in the U.S. in 1997. In those days, his company was ahead of its time with simple “scripting software.”
In 2000, Sather moved to Mayville, N.D., to work in the auction business and eventually went to work at Steffes. They created IQBid.com as a trademark division in November, licensing a new software platform that was created in 2008.
‘Come in, We’re Open’
In a recent example of the IQBid process, Steffes opened up a farm auction was described as “Mark Balstad Farm Reduction” in Fosston, Minn. The sale description says Balstad is discontinuing his grain operation and offered an equipment auction.
“Come in, We’re Open,” the site beckons, noting that bidding would run May 17 to May 26.
Steffes notes that Balstad listed 18 machinery and equipment items — just fine for an online format, but probably not enough for a full-scale, live farm auction.
The site says 18 items could be inspected in person from 10 a.m. to 4 p.m. May 24. Among the bigger items was a four-wheel-drive tractor, a combine, trucks and a few tillage pieces and grain carts.
As of May 21, a John Deere 9400 four-wheel-drive had accumulated eight bids. Balstad’s 425-horsepower tractor could be viewed with 14 zoom-friendly photos. The entry carried the serial number so the potential buyer could track its history.
The opening bid — $35,000.
“We set our opening bids similar to how we do the live auction,” Steffes says. “An opening bid is 40 to 60 percent of the expected value. We like to say it doesn’t matter where we start, it’s’ where we end up that counts.”
The latest bid on the site had been posted 18 hours and 39 minutes earlier, at $44,500. Recent bids are “transparent” and immediately refreshed, so the bidder doesn’t have to constantly hit a “refresh” function to see what’s happening.
‘Death of distance’
Steffes and Sather say anytime bidding is a big feature. The majority of online farm bids bids through IQBid.com seem to come from 5:30 to 7:30 a.m. and then from 7 to 11 p.m. or even later.
“It’s not unusual to see bids at 1 a.m.,” Sather says.
It is not like older online bidding “platforms,” where competitors will increase a bid in the last 20 seconds, and suddenly, without warning, the bidder is outbid — an often unpleasant event called “sniping.”
“This is absolutely snipe-proof,” Sather says. “You can’t hit it in the last three seconds, or it will extend by four minutes and gives other bidders a chance to come back.”
Total bid extension periods rarely go more than 30 minutes, they and there are mechanisms for bidders to compete on several lots at the same time, instantly and automatically getting notice that they’ve been outbid on a lot.
Predictably, online bids also come from a much wider region than otherwise would appear for live auctions.
“Transportation isn’t a big factor anymore,” Steffes says. “People call it the ‘death of distance.’”
There are memorable examples: a potato trailer to Mexico, a row crop cultivator to Georgia. One land plane went to the Australian Department of Agriculture, which sent it to Tanzania, he says.
“It’s amazing,” Steffes says.
The Australians had hired the John Deere dealer from Park Rapids, Minn., to break it down for container shipping.
Still another land plane went to Antarctica to level off a plane runway for airplanes to land.
Steffes is quick to say that his company continues to be strong in the live auction area, estimating that 80 percent of his business still is done that way. The company has two crews and 26 employees.
The company did about $25 million in first quarter sales of 2010, he says, in both live and online. About 85 percent of that was farm equipment and 20 percent in real estate.
The company had completed 23 online auctions since November. Another 15 currently were running another 15 as of May 21, including four farm equipment dealership auctions.
“Online bidding works extremely well for real estate, especially when there aren’t multiple tracts,” Steffes says.
Steffes says the online auction isn’t as social as conventional auctions, but has some advantages. In the past, a farm auction was more of a social event and often meant one of three things — a death, a retirement or a business failure.
Today’s younger, larger farm operators are computer-savvy and not as acclimated to live auctions as their fathers were. They consider it part of their marketing program.
Steffes says it isn’t necessarily cheaper to put on the online auctions because of the investment in computer technology and personnel.
IQBid commissions are negotiable, but roughly similar to the live auctions, which typically range from 6 to 10 percent. The negotiated amount depends on the amount of equipment being sold, its location and other factors.
The online division has its own territory managers go to customers and help them market their the items for sale in this way. They people in Grand Forks, N.D., as well as Alexandria, Buffalo and Litchfield in Minnesota and in Sioux Falls, S.D.
As in traditional auctions, the territory reps take pictures and collect data. It’s transferred back to the home office where a full-time IT specialist uploads it.
Typically, then, the online auction will start in a week or 10 days.