WASHOUGAL, Wash. — Like many businesses impacted by COVID-19, last year marked a crossroads for J. Stout Auctions.

The company, which specializes in selling heavy equipment for construction and agriculture, could no longer have in-person crowds at its auctions due to pandemic restrictions. Quarterly auctions hosted by JSA in Spokane and Washougal, Washington, would routinely draw up to 1,000 bidders from across the Northwest.

That’s when JSA and owner Jake Stout began a digital transformation, pivoting exclusively to online sales for public health and safety.

“It was nerve-wracking for everyone,” said Kasey Steendam, the company’s marketing manager. “We weren’t sure how it was going to be done.”

JSA held its first online-only auction on April 29, 2020, using live-streaming webcams to broadcast over the internet. Though it wasn’t perfect — the video was too dark, and the sound quality was less than ideal — Steendam said they were pleasantly surprised to see no decline in the number of registered bidders or item values.

By November, with a return to pre-pandemic life still uncertain, JSA made the decision to go fully virtual, investing in a state-of-the-art production studio at its Washougal facility.

“Once COVID hit, we really had to change our way of doing auctions,” Steendam said. “That’s where we’ve had to evolve to what we have here now.”

Online trend

JSA is part of a burgeoning trend of auctioneers that have either added online options or switched entirely to digital formats for their agricultural equipment sales. Industry experts say the pandemic has sped up that technological shift as large, in-person gatherings were banned.

Despite the upheaval, Steendam said JSA expects to double its revenue by reaching more buyers, with registered bidders in all 50 U.S. states and 30 countries.

“We want to go from regional to national to worldwide,” Steendam said.

Stepping into the JSA studio itself is like going through a time warp. The exterior is a replica Old West town, complete with rustic bath house, jail, saloon and horse-drawn carriages.

But inside the faded wooden “bank” building is a 21st century studio with six cameras, bright lights and anchor desk illuminated by four wall-mounted screens.

Steendam said the goal is to bring high-end production values not previously seen in equipment auctions. He compared their now-monthly broadcasts to those run by the collector car company, Barrett-Jackson, which televises auctions all over the U.S.

”We believe we’re the only ones doing this right now in the heavy equipment world,” Steendam said, referring to the unique studio setup.

Even before the pandemic, JSA had a virtual component in its live events. Bidders could use one of two online platforms — Proxibid and Equipment Facts — to participate alongside those who were at the auction yard.

JSA has since added a third platform, BidSpotter, to the mix and committed to the live virtual format. The first auction in the new studio was April 21, broadcast over the three online platforms as well as YouTube and Facebook Live.

The auction host and auctioneer sit at the main anchor desk, calling the action in real time while four “ring men” representing Proxibid, Equipment Facts, BidSpotter and absentee bidders field bids coming in from anywhere in the world.

Behind the scenes, a director in the control room runs the broadcast and airs a pre-recorded video of each piece of equipment as it reaches the auction block.

”We want to show everything working on screen,” Steendam said.

Buyers can also still visit the yards in Spokane and Washougal up to three days before auction day and check the equipment in person.

”We still get people come preview day,” he said, “but the fact is that they don’t have to wake up at 6 a.m., come down to the auction yard and wait for an hour to five hours. Now they can (bid) at home, or in their truck, or in their office. There’s no disruption to their day.”

Higher prices

Greater convenience means more people can participate, which in turn helps fetch higher prices for items at auction, according to data.

”It’s purely mathematical,” said Scott Musser, of Musser Bros. Auctions in Pasco, Wash., which has been conducting auctions online for years. “More checkbooks equals more money. Anything we can do to engage our audience and make it more convenient for our bidders to participate is a good thing.”

One of the largest equipment auction houses in the country, Ritchie Bros. Auctioneers, has seen the same trend since it went fully virtual last year.

Ritchie Bros. began offering online options to its live auctions as far back as 2002. Since then, online participation has grown exponentially, said Matt Johnson, the company’s sales director for the U.S. West, which includes an auction yard in Chehalis, Wash.

Before the pandemic nixed large gatherings, Johnson estimated 70% of sales were already online. The switch to online-only happened over one weekend in March 2020, and the number of registered bidders has since increased 44% for auctions at Chehalis, he said.

”We went from having an auction with in-person bidders to next week we were fully online,” Johnson said. “Bidder registrations were going up. … It made us realize this was definitely successful. Not only could we logistically do it, but we were seeing things gain steam.”

On Aug. 18, Ritchie Bros. released its latest market trends report, which shows higher prices for all types of equipment.

For U.S. customers, prices for large earthmoving equipment were up 8% over 2020 for the three-month period ending July 31.

Prices for medium earthmoving equipment and skid steer loaders were up 27%, up 31% for truck tractors that pull trailers and up 26% for vocational trucks such as dump trucks.

”I would expect that we would see this trend continue,” Johnson said.

‘Total paradigm shift’

In 2009-10, while president of the National Auctioneers Association, Musser predicted that more than half of all personal property auctions would be online by 2015. It was a bold take, he said, and one that earned him some blowback at the time.

”I think I was dead on,” Musser said in a recent interview.

The forecast was based on what he was seeing at his family-owned business, which has auction yards in Washington, Idaho, Wyoming and Montana.

Musser Bros. started simulcasting live auctions on the internet in the mid-2000s. By 2013, the company had started conducting all of its sales online.

”We had already seen a dramatic shift in the digital space,” he said. “It’s been a total paradigm shift in our industry and our business.”

About six years ago, Musser had an epiphany. He remembers talking with a farmer in the Columbia Basin who described how he was able to bid on equipment while sitting on his John Deere sprayer in the middle of a corn field.

”That’s why we do it,” he said. “These guys, they’re busy, they’re running crews. They don’t have time to come stand around all day at an auction.”

Musser estimates the move to online-only led to a tripling in the number of registered bidders for Musser Bros. Today, he said 74% of their customers bid directly on their smartphones, which he described as “mind-bending.”

The pandemic has accelerated the adoption of many companies going to an online model by sheer force, Musser added.

”When COVID hit, we really didn’t miss a beat,” he said. “We were already there.”

Live auctions

Online sales may be gaining in popularity, but Hannes Combest, CEO of the National Auctioneers Association, said she believes there will always be a place for the classic, live auction.

”I know there are more and more going to online auctions everyday,” Combest said. “There are certain times and places, though, where the live auction will never disappear. It’s great fun, and it’s a great business transaction.”

The association, based in Overland Park, Kan., represents 2,900 auctioneers nationwide spanning a variety of commodities, from equipment and real estate to intellectual property. According to the NAA, over a quarter-trillion dollars in goods and services are sold at auction every year in the U.S.

Combest said auctioneers have done a fabulous job adapting technology to weather the pandemic. However, certain types of in-person events such as galas, benefits and nonprofit fundraisers still have their place.

”People enjoy it so much. It’s a great way to do business. It’s very transparent,” she said. “You can still generate excitement through online auctions, but it’s not necessarily the same excitement of a live auction.”

Musser agreed that live auctions will continue to thrive for specialty events. But for commodity-type purchases, like farm equipment and implements, he sees no going back — at least not anytime soon.

”That’s all going to be online,” Musser said.

Johnson, with Ritchie Bros., said the company may consider resuming in-person auctions at their yards, depending on customer demand and public health guidelines going forward.

For now, Johnson said the online format is going smoothly and garnering positive results.

”We continually evaluate customer feedback and try to make improvements based on that customer experience,” he said.