A GLASGOW-BASED auction house has come up with a novel way of preparing for a likely boom in business from bankruptcies: it has drastically cut back on its live auctioneering operation to use an eBay-style online bidding system instead.

With auctioneers usually busiest during tough economic times, Hillington-based industrial auctions specialist Sweeney Kincaid expects to see lot volumes double over the next 18 months as receivers seek quick equipment sales after bankruptcies. But while this boom is usually offset by weaker demand and lower sales prices, the auctioneer predicts that its new system should see a 25% to 30% rise in sales.

In a similar way to eBay, the system advertises goods with pictures and descriptions on the company's website, telling the reader when the auction closes and the highest bid so far. The auctioneer maximises participation by sending emails to everyone on a database of potential and previous buyers. Since launching the system three months ago, which is the only one for industrial auctions in Scotland, Sweeney Kincaid has replaced 19 out of every 20 auctions with an online version.

Managing director Russell Kincaid said the new system attracts more bidders and speeds up the auction process. He said: "We have a regular attendance of about 100 people to our classic auctions. For last Friday's online auction of cars and vans, we had 170 buyers registered and bidding online the day before.

He said that speeding up the auction process reduced client costs: "In three or four bankruptcies out of 10, we have issues with landlords where we have to move goods very quickly because the rent is only paid up to the end of the month. Removal is one of our biggest expenses and normally the client would bear the cost, but this can be minimised if we do the auction more quickly.

"We were asked by one of the major banks to pick up some garage machinery in Ayrshire three weeks ago. The instruction came on the Friday afternoon, it was photocategorised on the Saturday morning and e-shots were sent to potential bidders by the end of that day. The auction closed on Monday at 4pm, the goods were removed by the Wednesday and the client had the cheque by Friday. That previously might have taken two-and-a-half or three weeks," he said.

He added: "It's too early to say confidently how the system will benefit the business, but I would hazard a guess at something like a 25% to 30% rise in sales."

This would push last year's gross sales of "£7 million to £10m" up to the "tens of millions". He predicted that net sales, which are currently slightly more than £1m, would rise to "between £2m and £3m" next year.

His team of programmers is now working on improvements to the system, including automated bidding, whereby bidders will be able to post a maximum bid and the server will make a series of rising bids on their behalf up to this level during the auction. It should be ready before Christmas, while clients will next year have the option of holding online auctions themselves.

Despite the similarities with eBay, Kincaid denied that his system had been inspired by the US online giant. He added that his system was superior in that eBay makes no attempt to control the quality of its goods except through customer descriptions and it does not offer a traditional auctioneer's valuations service for clients.

He explained that Sweeney Kincaid had been developing a web presence since 1994 and ran a trial online auction for model aircraft moulds in 2000. "It was successful, but instead of developing it we spent our budget on developing our back-end system. To integrate it properly would have cost a lot of money," he said.

The auctioneer instead developed a system of online tender sales for goods that are either specialised or not expected to attract strong interest from bidders. This blind auction system, which represents about 50% of sales, sees potential buyers posting how much they are willing to pay for an item and the highest bidder wins. Kincaid said half to two-thirds of these would now move to the new auction system.

He said that Sweeney Kincaid was already seeing signs that the credit crunch was affecting demand, with categories such as commercial vehicles and printing machinery falling away.

Neil Davey, chairman of the National Association of Valuers and Auctioneers, said this trend was playing out with members across the UK. He said: "Auctions tend to get very busy during a recession. You get repossessions of household goods, cars, industrial plants, all kinds of things."