Fate can push you right where you need to go. "The pandemic catapulted us five years into the future," says Richard Maltz, CEO of Maltz Auctions, a high-end Central Islip company that sells real estate, jewelry, cars, boats and business assets, among other goods.
For 40 years, the company’s auctions were in person, but 2020 changed everything. COVID-19 restrictions permitted only online auctions. Maltz was beside himself. "I always resisted online-only auctions. We were forced to adapt."
His chief criticism of online auctions was that bidders can’t see what’s going on, there’s less human interaction and the payment process is more complicated. In March, the company switched to online only. What Maltz protested he now praises. "Online-only auctions have been tremendously successful."
The company commissioned someone to develop an app to facilitate online auctions in August of 2019. It was ready to go in March. Since then, there have been more than 30 online auctions. Sales from the last three quarters of 2020 were up 11% over 2019.
Maltz talks about how online-only auctions are growing the business.
How is bidding different when it’s online?
Bidders can bid via computer or smart device by downloading our app. Auctions typically occur over several days versus the traditional live auction where bidding happens for a few minutes or hours. We are seeing "smaller" buyers that would not dedicate a day to attend an auction, but they are willing to pull out their phone and bid. Online availability levels the playing field, it’s easier. You can bid from home in your underwear.
What are some challenges of the online-only business model?
We used to rent out a hotel ballroom. A team would show up at 7 a.m. and stay all day. For real estate auctions people need to be a qualified bidder, they must put up a deposit. So now they’re sending in a deposit via Federal Express or bringing it in. It’s far more cumbersome to manage the flow of funds compared to in-person auctions, where people hand over their check at the auction. Beyond the extra administration, I miss the interaction with the bidders. Some of the fun has gone out of the process.
When the pandemic is over will you remain online only?
We will do a mix for larger real estate sales. For personal property and small real estate auctions we will likely use an online forum. I think people have greater comfort with in-person bidding, but we’ve discovered if people want something they’ll bid online.
How has your business been affected by the real estate boom?
The single-family real estate market is on absolute fire! We recently held an auction for seven homes. We had an average of 23 registered bidders for each property, and all sales sold at least 20% above expectations.
During the pandemic, the wealthiest got wealthier. Did that impact prices?
Our first luxury jewelry auction since the pandemic is in April and will be a good indicator.
Overall, how is Maltz faring during the pandemic?
We had a large sale of 1,200 school buses, a couple of big commercial real estate sales, $50 million and $30 million, though those were in the pipeline pre-COVID. While we’ve had large dollar sales, volume is down. With the pandemic [moratoriums] there have been no foreclosures. But we haven’t laid anyone off. We hired a full-time position and plan to hire a couple more people. There are a few things on hold. The upside, my wife is happy to see me at 5 instead of 8 p.m. When things pick up, I’ll be quasi living at the office.
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