Hiring An Auction Company

Estimating your assets value:

Typically, one of the first questions a business owner will ask me is, “how much will the assets bring at an auction”. After taking the time to review the assets, the auctioneer should give the client a conservative estimate of the sale based upon his experience and the current market trends. It is important that the company give realistic expectations so the seller can make informed decisions based on their best interest.

Compensation and Expenses:

Is the company you are considering working for you or against you? The agreement you decide may determine this.

A business owner should carefully consider how the auction company is compensated. The most common commission structures include: straight commission, outright purchase of assets, guaranteed base with a split above to both auctioneer and seller, guaranteed base with anything above going to auctioneer or a flat fee structure.

In a straight commission structure, the company is paid an agreed upon percentage of the total sale.

In an outright purchase agreement, the auctioneer simply becomes your end buyer. The company purchases your assets and relocates them. While this can be an option in some unique situations, keep in mind that they will want to purchase your assets at a very reduced price to make a profit at a later date.

In a minimum base guarantee, the auction company guarantees the seller that the auction will generate a minimum amount of sales. Anything above that amount either goes to the auction company or split with the seller. While a seller might feel more comfortable doing an auction knowing that he is guaranteed a minimum amount for his sale, keep in mind that it is the best interest of the auction company to secure a minimum base price as low as possible in order reduce their financial liability to the seller and secure higher compensation for the sale.

In a flat fee structure, the auctioneer agrees to show up for the sale and call the auction. There is no incentive for the auctioneer to get the best prices for your assets. The auction company is compensated regardless of the outcome of your sale.

What is the best option for business owners? In my experience, an agreed upon straight commission structure. This puts the responsibility on the auction company to offer the best outcome for everyone involved. There is an incentive for the auction company to work hard for both parties, set up and run a professional sale, get the highest bid and sell every item on the inventory. Successful auctions translate to a higher bottom line for both the seller and the auction company.

Auction Expenses:

In most auction agreements the expenses to conduct an auction are passed to the seller. If the auction company pays for the expenses, it is simply absorbed in higher commission rates.

All expenses should be agreed upon in advance in a written contract. Typical expenses will include the costs of advertising, labor, legal fees, travel, equipment rentals, security, postage and printing. A reputable auction company will be able to estimate all expenses based upon their experience in previous auctions. An agreement should be actual costs charged as expenses, not an estimated amount.

Advertising is typically the highest cost in conducting an auction. The auction company needs to set up an advertising campaign that will promote the sale to its best advantage and not overspend to simply advertise the auction company.

Once the auction is complete, the auction company should provide a complete breakdown of all expenses to the seller, including copies of receipts within the auction summary report.

Buyer’s Premium:

What is a buyer’s premium? If you attend auctions regularly, you are very familiar with this term. The auction company charges a fee to the buyer when they buy an item at auction.

The buyer’s premium has been around since the 1980′s and is standard auction practice. It was first used by auction houses to help offset costs of running brick and mortar permanent auction facilities. Since then, it has spread to all aspects of the auction industry. It is prominent in online auctions and allows auction companies to cover added expenses incurred from online sales.

It is the responsibility of the auction company to provide clear disclosure of the buyer’s premium to both the buyers and the sellers. Those not familiar with auctions are often taken back by the buyer’s premium. They looked upon it as an under handed way for the auction company to make more money. Reputable auction companies will provide full disclosure within the auction contract, advertisement and bidder registration.

Typically, an auction company will charge online buyers a higher buyer’s premium percentage than those attending an auction in person. Extra fees are incurred with online bidding and are charged accordingly to online buyers. This provides the seller a level playing field for both online buyers and those attending the auction in person. Without the buyer’s premium, there is no way to do this.

Pre-Sales:

We’ve all been there. We’re looking forward to attending an auction only to find that some items were sold prior to the auction date.

As an auctioneer with over thirty-six years of experience, I can honestly state that pre-sales will hurt an auction. When a company decides to liquidate their assets, it is easy to sell off high-end pieces of equipment through online sources, equipment vendors or to other businesses. The seller receives instant cash and avoids paying a commission to an auction company.

Auctioneer’s find themselves appearing to acting in a self-serving capacity when potential clients say they are planning to sell off parts of their inventory prior to an auction. It’s hard not to consider the auctioneer’s commission when they warn you not to pre-sell anything. Yes, the auctioneer wants to earn a commission on those sales but it is more important that the auctioneer protect the sale from potential negative backlash that comes from pre-selling. The buying public knows when an auction has been “cherry picked” prior to the sale and it reflects in their bidding. It becomes a sale of “leftovers” and that impacts prices.

A buyer who purchases prior to the auction usually does not attend the sale. They already bought equipment at a good price with no competition. If they do attend the auction, they tend to let others know of their great pre-sale purchases which again, impacts prices and the overall excitement of the sale.

It is important to understand that auctions work best with a complete inventory. You want competition on your higher end equipment. The easy to sell items make it possible to gain respectable prices for hard to sell items.

When a business owner decides to liquidate their equipment assets, there is only one opportunity to do it right. Hiring a reputable auction company will assist you with a professional, orderly and timely liquidation.

Learn How You Can Start Your Own Home Based Business

If you are not personally effected by the current economic crisis, you are sure to know someone who is. In every town and on every street there are people currently struggling. You can learn how you can start your own home based business, right on the internet! If you search you can find the perfect online home based business opportunity, for you.There are many reasons why starting an online home based business is the solution to the current economic situation, here will will concentrate on some of the primary ones.

Good Business Practices: When you own your own home based business, you are in control of how it is conducted. There is no CEO pirating all the company income for their outrageous salaries, and golden parachutes. And there are no under the table or shady deals that you are unaware of.

Limited Start Up Expenses: Most home based businesses can be started on a limited budget, with a limited amount of time available to devote to it, and a limited amount of knowledge about it. In many home based business you can learn how to run your business as you work to develop it.

No Discrimination: When you have your own business, you will never be told your salary has been maxed out, or that there are no higher positions you can attain. If you are a minority (race, female, or elderly) it is never an issue when you work for yourself.

Greater Productivity: People are more productive when they work for themselves, and their income is directly proportional to the work they accomplish.

Corporate Security Myth: The days when working for a corporation ensured that you would have a decent retirement, adequate health care, or even steady work are long gone, if that ever really existed. Loyalty to and dependence on a corporation gets you nothing in return.
Today more than ever people are finding out that they have only themselves to rely on. They are discovering that the solution to their personal economic situation as well as the global economy are far more secure in the control of someone with a commitment to the growth of the business. Who has more commitment than the owner? No one! You should really seriously consider if an online home business solution, is what you have been searching for. Becoming a online home business owner can be very rewarding for the person who is serious about securing their future.

Empowered Women: Entrepreneurs and Business Owners – Is A Home-Based Business Right For You?

As many women already know, there is nothing more empowering than having control over your own finances and future. Women are making great strides in today’s world, and many empowered women today are entrepreneurs and business owners. In fact, the statistics on women in business and women who own businesses just keep getting better. If you Google “empowered women” you can find a wide variety of topics, from successful career women, to women’s self-help sites, to women’s blogs, to home-based business opportunities, to stay-at-home moms who made it big with a product or idea that really paid off.The idea of women in business is not new. Women are the original mothers of inventions. If they need it and can’t find it, they invent it, market it, and sell it. Women juggle families and careers and still manage to donate, volunteer and support others. Some women are choosing to keep their traditional jobs and careers, while others have made the leap into entrepreneurship and have started their own home-based businesses.According to figures published by the DSA, Independent Research and Bureau of Labor Statistics:53 percent of all businesses in the US are home-based.
The home-based market has grown over 15 percent each year since 1995.
There are over 14 million home-based businesses in the US.
These home-based businesses generate over $1 trillion annually.
Direct selling accounts for a huge percentage of home-based businesses with sales of $30 Billion in the US and $100 billion worldwide.
Direct selling has added 175,000 people each week in the US and 300,000 worldwide.Did you know that the profile for a home-based business owner is predominately female, 35-54 years of age, who is married and most likely to be college educated? These women typically work on their businesses part-time. The majority of these women are involved in direct sales with companies that successfully empower women such as Avon, Cookie Lee, Creative Memories, Pampered Chef, Shelf Reliance/Thrive Foods, Jewels by Park Lane, Etc.Empowered women entrepreneurs and business women are quickly gaining the edge in the competitive world of marketing. Companies are changing how they design, produce and market products in order to appeal to these niche businesses and the women who own them.Because technology has made such great strides in the past decade, working from home is no longer something you have to dream about doing. Working from home is now a viable career option and a very realistic means to financial success.To decide if a home-based business is right for you, ask yourself where your talents or passions lay.Do you have an idea or an invention that you would like to market and distribute?Do you want to work on your business full-time or part-time?Are you interested in direct sales?Do you interact well with people?It is always best to set a realistic goal for yourself, thoroughly research any ideas you might have, and create a business plan for yourself. If you decide to go into direct sales, be sure that you understand how much time, effort and money you will need to invest before you start making money. Be certain that you understand the compensation plan of the company you are thinking of partnering with. Know if you will be required to recruit mass numbers of people to create “teams” in order to be successful. Research the company and check the complaint boards to make sure you are not joining a company with mostly negative reviews.If you feel that being in control of your own financial success will empower you and you are an entrepreneur, then a home-based business may be right for you!


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