Jeff Johnstonbaugh, COO of BidSpotter, talks about RemoteBidder, BidSpotter, Internet bidding and the future of the industry. You can play the episode or download it for later using the links at the end of the transcript, or you can use iTunes or your favorite podcasting software to subscribe to the Auction Podcast. Enjoy!

You’re listening to the AuctioneerTech Auction Podcast; today is Wednesday 5 August 2009. My name is Aaron Traffas and joining me today for the third in the Vendor Interview Series is Jeff Johnstonbaugh. Jeff is Chief Operations Officer for BidSpotter Incorporated.  Good evening, Jeff, and thank you for joining me.

Jeff JohnstonBaugh: Hello Aaron, it’s a pleasure.

AuctioneerTech: Jeff how did you get started in the auction industry?

JJ: Well, trading and buying and selling and going to auctions has always been in my family. I started working I was about thirteen in the restaurant business, by the time I was twenty-one I was fairly burned out on that career, and so I was buying and selling a lot of equipment at auctions for restaurants and building restaurants and the auctioneer whose sales I attended most them asked me to come and work for him. That was about 1982 and at it’s been twenty-seven years ever since. So it’s worked out okay.

AT: And you were working in what capacity for that auctioneer?

Oh, I started out as a set up and ended up as an auctioneer and ended up as a sales manager and I actually ended up buying his business when he passed away after I’d worked for him for about fifteen years, just your ordinary local, regional neighborhood business auction company.

And maybe we should preface that a little bit – where are you from, where was this and where are you at now?

I’m still up in the Seattle area where I was there and so I actually purchased Jesse Jones Auctioneers and ran Jesse’s company for several years until I got distracted by this whole Internet thing.

And tell us a little bit about this distraction, as you call it, and what drove you to BidSpotter.

Well, like a lot of people, I saw the allure of the Internet and decided to pursue that dream and I was actually working at nordstrom.com at the time, I was interviewing for a position internally and the president of the company stepped out of our meeting for a while, which obviously made me nervous, he stepped back in and said something which made me even more nervous, said Jeff I’m doing to do something I’ve never done before, I checked with the Nordstroms and we’re going to refer you out of the company, which obviously panicked me. He actually was an angel investor sitting on the board of a little company called LiveBid which was one block down the street and he referred me down to them so I took a walk down the street and it turned out that that was just about ninety days before they were purchased by amazon.com and the fellow who was the sales manager there was well known to me because I had taught him bid calling a few years before, and so I hired on with LiveBid and the online adventure continued.

When was that that you hired on with LiveBid?

I want to say it was 1998. It’s interesting; we got enough experience Internet now that it’s starting to get lost in the fog of time. But yeah, we were bought by Amazon and Amazon had an interesting strategy. Amazon saw that eBay was coming after retail so they took at a shot, Amazon saw eBay was coming after retail, so they took a shot at auctions for a while to force eBay to refocus on their core business and it was very effective and one of the things they wanted to do was make sure that eBay didn’t get to buy LiveBid company nor Yahoo Auctions and we were at Amazon for about eighteen months. I had the opportunity to work with Sotheby‘s and I had the opportunity to help develop the first beginnings of different platforms and sort out how industrial auctions and different from consumer auctions and all that sort of stuff. So it was very formative years and very exiting times.

Sure. How then did that job description segue into BidSpotter?

Well, Amazon decided that its strategic move had run its course and after about fifteen months or eighteen months they let us all go. Some friends of mine, Bill Foot and Jeff Harris, went off to form BidSpotter.com, I took a year off and then later joined them and BidSpotter has grown very steadily from a very small company to what we have today which is working quite well for us. One of the unique circumstances that sets BidSpotter apart from other competition is that there’s never been any outside investments. We’ve been cash-flow-positive and work form within our own means since they started out with their own severance checks and it’s built slowly but it’s built very solid. So we are very proud of that.

That’s very somewhat unique in these days of tech startups and Internet companies and it seems like everybody is taking venture capital from various places and having something that is completely organic and as you put it a cash flow positive entity from the get-go is something to certainly be proud of. You say that Bill and Jeff started BidSpotter and then you joined them shortly thereafter. How did you know them? They were in LiveBid, is that right?

Correct. All of us that founded and originated BidSpotter were from within the Amazon group. We joined with some fellows from Canada, Inet Softglobe was the name of their company and they provided the bidding engine around which all of the BidSpotter website is wrapped. And so it’s grown on that basis and now the fellows from Inet and the original founders of BidSpotter are all partners in the deal, but again, there’s never been any outside investment and there’s never been any debt taken on and so its worked out pretty well.

So how long would you say that you were a bid calling auctioneer, is that something you still do on the side, is that locked away as a part of your past, how long did you do that?

I probably did that very actively with one or two sales a week for a dozen years, and something I still can do and I’m 6happy to do, but for me primarily now its pitching in to help somebody else or for a good charitable cause, I don’t actively pursue auctions although I do still cooperate and consult with friends on big projects and so forth occasionally.

Sure. Well Jeff, tell us about BidSpotter, how would you describe BidSpotter to somebody in an elevator? What does BidSpotter do and what kinds of Internet bidding does BidSpotter support?

BidSpotter.com

Okay. BidSpotter is a website where folks primarily go to buy industrial machinery, plant machinery; I like to say things that make you money. The ways that BidSpotter works with the traditional auctioneers is to provide technology for a Web simulcast where you can bid against the live crowd in the room with the traditional auction, a strong area of growth in future trend, is the timed auctions, the online auctions that are more of an eBay style auction but we still present them as an event as opposed to random items in this gigantic mishmash of offerings. Each of our auctions, whether it’s a timed online auction or a webcast auction, appears in a calendar fashion, it gets its own standalone credibility. The buyers tend to migrate amongst the items there and consolidate their shipping and figure out how to work with one rigger or machinery mover to get the stuff home. They develop a relationship with one auctioneer to buy multiple items at that event and then they package up the goodies, pay the bill and go home. The timed auctions are far more popular with our European clients and we do have a very strong European representation. We also are active in South Africa and the live webcast auctions are really the bread and butter of the