An auction is an interesting concept – and a very old concept. Auctions have been found to exist as far back as 500 B.C. and have stuck around, adapting to the changes in societies and cultures.

Many pinpoint the auctioning off of Joseph of the Coat of Many Colors (of biblical fame) into slavery by his brothers, as the first known auction. Slave auctions unfortunately became a very common type of early auction.

Others point to Babylon in 500 B.C. as the origin of the auction. In these early auctions, women, sought after as brides, were the commodities offered for sale. Attractive brides would command a great price; unfortunately, more homely women would have to be accompanied by a dowry, making the winning bid price negative. In other words, the winning bidder would actually have to be paid to marry the women!

Some early auctions had incredibly high stakes. In 193 A.D., the entire Roman Empire was actually auctioned off! The highest bidder, Didius Julianus, won the bidding at a price of 6,250 drachmas for each Roman guard. He didn’t get to enjoy his purchase for long though, since he was beheaded two months later by Septimius Severus during his conquest of Rome.

The ancient Romans are generally credited with being the first to organize the sale of goods at auction. The Romans used auctions to sell goods produced in the area, as well as the spoils of Roman conquests and property needing to be liquidated.

Asian cultures also incorporated auctions into their societies. There is evidence that during the seventh century, auctions were a device used by Buddhist temples and monasteries to dispose of the possessions of deceased monks. A common type of auction used in China was the “handshake auction” where bidders would grasp the hand of the auctioneer and press their fingers against his hand to indicate the amount of their bid. Each handshake was done under the cover of a cloth so that others couldn’t see the bid.

Modern auctions, as we know them, sprung from the Netherlands’ fine art auctions. During the 16^th and 17^th centuries, paintings and prints were sold in a type of auction that combined elements of a normal or “straight” auction with those of a “reverse” auction. (See below for details on straight and reverse auctions).

The slave auctions represent a dark and tragic period in American history. Slaves were shipped to America from the West Coasts of Africa. When a slave ship arrived, the slaves were immediately prepared for auction. For slaves that had been captured and brought to America with members of their family, the slave auction was often the last place in which they saw their family members, as each slave was auctioned off and “won” by different persons.

Slave auctions generally fell under the category of straight auctions; however, the slave traders used many means to further their business objectives. Another common method was to charge each buyer a flat rate, allowing the buyers to rush into the pen of the slaves, grabbing the ones they wanted.

In the 1800’s, the U.S. began to use auctions in areas besides agriculture and slavery. In 1883, the U.S. opened its first fine art auction house, the American Art Association, founded by Thomas Kirby in New York City. The Association added touches of class and theatrics to the auction format that would be imitated by many later auction houses. Famous auction houses such as Sotheby’s and Christie’s, which opened their U.S. offices in the 1960s, further refined the Association’s innovations.

The new era for auctions began in 1995 with the birth of the online auction. The founding of Internet auction companies such as eBay, has led to a renaissance of sorts for the auction. Online auctions have reintroduced auctions to the masses, and changed the way goods are bought and sold. The online auction market in 2005 was estimated as a $35 billion industry, and the live auction industry at $241 billion.