Online or Not, the Age-Old Auction Business is as Strong as Ever in Alberta

Photography by Bluefish and Duncan Kinney

ESTATE SECRETS: Arthur Clausen, owner of Arthur Clausen & Sons Auctioneers, got his start in the business in the late 1960s

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Sidebar: Auctioneers Across Alberta: An annotated Google Map of every auctioneer in Alberta plus a photo gallery

Arthur Clausen has spent the last 40 years making his living off of other people’s property. Clausen is an auctioneer whose Edmonton-based business specializes in estate auctions, which means that Clausen visits homes five times a week, collects high-end consigned items, and then auctions them off on weekend sales that typically attract upwards of 150 people and gross more than $80,000. On a particularly good day, he can pull in triple that amount.

For the casual buyer, the auctions run by Arthur Clausen & Sons Auctioneers are entertaining events that might result in a good find or two, perhaps a Persian carpet or piece of vintage Canadian art. But the man rattling off numbers at the front of the room is also a kind of counsellor, helping families part with the possessions that are the inventory of a loved one’s life. He’s both a researcher who knows those possessions more intimately than their owners likely ever did, and a salesman who thrives in front of a crowded room.

“It’s profitable and it’s an enjoyable business. You meet nice people, and you help them. There’s a good feeling in that,” says Clausen, a chipper 75. Clausen got his start in the business in the late 1960s when, as a teacher, he opened an antique store that promptly went broke. When he called in an auctioneer to liquidate the store, Clausen was immediately intrigued. “It was just as if [being an auctioneer] had been there waiting for me all those years,” he says. Clausen paid a fee to become a licensed auctioneer (today the process requires a course), and he started his auction business in 1970.

The business originally specialized in the importing of antiques, but a niche in estates quickly developed. Due to downsizing, death or poor health, people are constantly looking to sell their possessions, and that’s where Clausen comes in. He has dealt with the various estates of one family for three generations, and he has followed many other families and their estates as they downsize from houses to condos to nursing homes. Clausen’s estate auction business may be a specialty in the industry, which is better known for industrial auctions, but his exclusive focus on estates and high-end items has built a healthy business over the past 40 years.

While other auction businesses hold auctions once a week or more, Clausen averages a sale every five or six weeks – last year he did only nine auctions in total. “We concentrate on those areas that have high value: high value when it was new and high value in the secondary market,” he says. Clausen, who puts in 50 to 80 hours each week, is helped in the business by his wife, Catherine, and 10 employees who work each auction.

Jewelry, carpets, fine art and antique furniture are the items he commonly handles, and it is through researching those items that Clausen makes his money. An English wine glass sitting on a table next to an open book, for example, looks to the untrained eye like nothing more than a fancy glass. But as Clausen matches the object with a picture in the book, he points to a much higher value: $2,800 to $3,200. This is where Clausen excels.

And though the Internet and online marketplaces like eBay and Kijiji have exerted a significant influence on many in the auction industry, they’ve barely bothered Clausen. Aside from a company website that posts pictures of items before each auction, which Clausen says has helped attract new buyers and sellers, his niche business has largely been able to ignore the Internet. It’s a different story in Wainwright, though, where Katrina Scribner owns Scribner Auction Ltd. with her husband, Kevin.

“I find the Internet to be one of the best things that could have happened to the auction industry,” she says. “It’s made us become global in a small town.” Though Scribner Auction is a few years away from implementing an online bidding process, the business currently takes telephone bids. At a recent auction, a woman from California placed her bids by telephone throughout the day.

Scribner Auction, which gained some notoriety for selling the world’s oldest known Plymouth last August, runs estate, antique, auto and farm auctions. Auctions limited exclusively to a single estate occur once or twice a year, while other estate items are added to variety auctions that occur more frequently.

The Internet serves as a good research tool for Scribner, helping her to determine the value and rarity of particular items. For her, web-based classified sites like Kijiji or Craigslist are not a major threat to the business. “If you want to sell your car and you bring it to me to sell, I’m going to invite hundreds of people here,” says Scribner. “They’re all in the market to buy a vehicle, and they’re going to bid against each other to get that vehicle, and you never had to meet one of them, and they didn’t try to chew you down. We’re negotiating up, whereas when you sell privately you’re negotiating down.”

What has changed the business, says Scribner, is the rise of big-box stores like Walmart and The Brick. Auctions simply can’t compete with a store that can offer new living room
furniture sets for no money down. To compensate, auction houses like Scribner’s are very choosy about the items they initially take in.

Back at Aurthur Clausen & Sons auctioneers, the Sunday morning sale turns the normally quiet west-end office into a hub of activity. The last auction had 190 registered bidders, a group that filled the room before bidding began at 10 a.m. sharp.

As Clausen stands at the front of the room and auctions off an average of 500 items, he has the unique responsibility of balancing the demands of the people who are consigning with the demands of the people who are buying. When done properly, says Clausen, auctions establish the fair market price, which is why courts and other government agencies often send belongings to auctions.

The loud “sold!”, complete with the swing of his hammer, is one of Clausen’s favourite parts of auction day. “The ‘sold’ has a kind of rush to it,” he says. And while it’s easy to build prices when there is competition among a big, excited crowd, Clausen says that there are times when an item is not doing well, when “you bite your lip and you sell it.”

Still, in good times and bad, Clausen thrives on the pressure that auctions naturally create for buyers and sellers – and auctioneers – alike. “I love it,” he says. “If you were examining me >
from a psychological point of view, you would say, ‘Boy oh boy, you’re in control.’ And I suppose that’s true, but there’s more to it than that. It’s a matter of succeeding, and sometimes you compete with yourself.”

Ironically enough, after 40 years of putting other people’s most treasured possessions up for sale, Clausen may have to do the same for his own. Retiring has been on Clausen’s mind for a number of years, and while he says his customers haven’t yet let him and his wife retire, he thinks this year or next could be the end. But as that date comes closer, he remains unsure about what they will do with the business. “We’re not aggressively, but intelligently, looking for continuity,” says Clausen. “I know that sounds vague, but how do you sell a lifetime’s business? We don’t know whether we want to sell it, and we don’t know what to charge for it if we did.”

If Arthur Clausen’s business is built on the past, Michener Allen Auctioneering is far more focused on the future. The company installed the web cameras at their industrial auctions back in 2002, and they haven’t looked back since. “The Internet is such a huge part of our business,” Wade Michener says. “You never know where stuff could go.” Since installing the web cameras, the Michener brothers say that their Alberta-based company’s reach has extended into markets they never thought they would enter. The company has shipped bulldozers as far as India, and in March 2010 the company sold excavators to China.

GAVEL CLAN: Ian, Ethel and Vance Michener of Michener Allen Auctioneering

Industrial auctions are big business in Alberta. In the typically slow month of January, Michener Allen, which operates yards in Calgary, Edmonton and Winnipeg, will move $1 million in sales on an industrial auction day. The spring and fall are busier since they coincide with the beginning and end of Alberta’s construction season, and the total value of sales in those months will rise to $4 million in a day. Ritchie Brothers, Michener’s competition and one of the largest auctioneering firms in the world, says its Leduc auction yard in the Nisku Industrial Park is the company’s busiest in North America.

Some of that volume can be attributed to the province’s economic cycles. “Because of the way Alberta is – it’s boom or bust – that’s the perfect scenario for an auction company,” Ian Michener says. The boom scenario creates an urgency to buy, as new equipment is expensive and hard to find. Economic busts mean additional business for auctioneers as well, since companies need to sell equipment and inventory to find cash. “It’s one of the only ways to get rid of equipment,” Ian says. “You can sell it all in one day and get your money and liquidate.”

“You see a lot of people do that,” says Trevor Sorken. Sorken is the president of Prairie Ghost Contracting Ltd. in Bashaw, northeast of Red Deer. He’s been selling equipment at Michener Allen for 10 years, and has seen firsthand the effects of selling in boom-and-bust cycles. Michener Allen charges the seller a percentage fee when the product is sold. Buyers at the yard pay a set-rate handling fee to bid at the auction. On the Internet, the fee is two per cent, to a maximum of $500.

Auctioneering services, Sorken says, need to earn the trust of their sellers. Businesses like his, which use auctioneers to sell equipment, need to know that the auctioneer will spend enough time on each product to lock in the best price. Especially at busy auctions, Sorken says, some auctioneers have a tendency to hit a certain price at $1,000 or $500 increments and sell early. At Michener Allen, he says, “They’ll go down to $250 increments and you can get another couple of thousand dollars that way.”

The Canadian government also decided it trusted Michener Allen enough to sell its equipment. The auctioneer currently holds the contract to sell Government of Canada equipment, including items from the Canadian Forces, through the Independent Canadian Auction Network. ICAN is a Michener Allen creation set up to sell government equipment through auction yards from St. John’s to Victoria. That contract brought Tom Lavender to the yard on auction day.

Lavender, of T C Backhoe and Directional Drilling in Sherwood Park, says he’s waiting for a heavy truck with a front-end digger brought in from Canadian Forces Base Edmonton. As Lavender sits and waits, the truck and its heavy-duty digger is idling in queue, waiting for its time in front of the auctioneer, the crowd and the web cam.

“I should never say never,” says Joe Knobloch, but he prefers to be physically present at the auction rather than bid through the Internet. Knobloch operates Astro Car and Truck Sales in Clairmont, immediately north of Grande Prairie, and has been buying from Michener Allen for close to 25 years. He says that for buyers looking for a single piece of equipment, the web cameras and live Internet bids are a great alternative to sitting in the bleachers waiting for that single machine – though he has yet to bid online.

“It’s different if you have one piece in mind,” he says, “but we don’t go in to buy just one piece. If prices are right, we’ll buy the whole lot. So we’ve got to be there.”

Knobloch will fly from Grande Prairie to Edmonton for auction day. Others, Ian Michener says, are happy to purchase online. “There are lots of times when our crowd is done and you’ll be selling to the two guys who are battling it out on the Internet.” In that way, Michener Allen’s web cameras have decreased attendance at some auctions while increasing sales, “because that guy [buying one item] doesn’t have to come in and sit here all day.”

Not that sitting at the auction yard is entirely uncomfortable. A snack concession keeps the crowd well-fed and heat lamps in the bleachers keep people warm through the winter. At Michener Allen’s industrial sales, auctioneers will work two lanes for equipment, including tool kits, and one lane for heavy trucks.

Car auctions get much busier, and the company will run four car lanes and two RV lanes for the full day. At this point, Michener Allen has implemented Internet bidding on RVs, but not yet for cars.

About Internet bidding on cars, Ian says, “I don’t know if the public is ready for it. I know that the dealers would be ready to buy online, but then, the professional buyer would.” Michener says that if a couple wanted to buy a van, they would want to touch it, feel it and sit in it. Still, he doesn’t rule out the possibility of web cameras at car auctions in the future. “It’s not very far off,” he says.

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