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.

Home Based Business – What Are the Benefits?

Are you in the right job for you? Do you enjoy going to work? What about on the Friday, are you still as keen? Or do you tend to check your watch every minute after lunch time hanging for the day to finish.Maybe a day to day job is not right for you.I understand that with pressures of family and other commitments, that is isn’t that easy just to pack up and leave a job. I wouldn’t recommend quitting your job and starting a home based business anyway, because depending on the business, it could take some time for you to actually make an income from it. Regular income is a big plus, but why settle for something that you are not 100% happy with? What is stopping you from looking at what else is out there?So with a home based business, what are the benefits?1. The best thing about a home based business is that it can be flexible. You can do it in your own time. (In your pyjamas if you really want).2. With the internet at hand, you can potentially do everything from home! From price comparisons, to ordering, to delivering items, to calling, e-mailing, even to Skype (a free telephone service available all over the world).3. One huge advantage is, that you could even work on it when you’re not home. Work overseas, or even when you are on holidays.4. Most home based businesses create a passive income, so the income you can make is unlimited. No more ‘waiting for that big promotion’. You create your own success. If you are focused on achieving your goal in the business, you can make it happen.5. Once your business is up and running, and making you the money you require, you can then chose to quit your day job, and concentrate solely on your home based business. If you are a stay at home parent, or don’t have a job yourself, but can cover costs with some other source of income for a while, you can also build quite a substantial business if you put your mind to it.So, if you are willing to step out of your comfort zone; the regular pay cheque that comes with a day to day job, and are open to the idea that you can be so much more than you are now, then maybe you should take the step to start your own home based business.

Finding Information About Home Based Business

Over the past few years a large number of people have started with their own business ventures and most of these ventures fall under the ‘home based business’ category. Home based businesses have gained in popularity and given the current job scenario more and more people are looking to start with their work-from-home stint.You have a large number of options to choose form if you want to start working from home. The internet provides people with fantastic opportunities and those who make the most of these opportunities end up making loads of money in a short span of time. In order to be successful, you need to know what to look for and where to look. Depending upon your field of expertise there are a number of job opportunities that you can convert into a business in the latter stages.Various books and ebooks over the internet provide you with good information about the various options you have. These ebooks provide you with information on the various websites and forums where you can bid and find projects to suit your field of expertise. These books also offer tips on how to bid for a particular project and how to meet deadlines successfully.You can find a large number of tips related to home based business over the internet. These tips are written by people who have successfully managed to form a full-fledged home based business and have successfully run the business for a long time now. These tips prove to be very effective if you have to start from the scratch and have no idea about how things work in the world of internet.Once you read a book, you would realize the importance of those full-of-fun websites like twitter and
Facebook. You would come to know how these websites form an important part of the online marketing strategy of businesses across the world. You should also try to get your hands on information about web2 and how things work in the present era of online marketing.Initially you may find it tough to establish your name over the internet in a particular field. However a few months down the line, you would well be on your path to establishing a successful home based business. Once you get a few regular clients, you can look to expand your business and take it to a higher level.


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