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.

Search Engine Marketing – How and Why?

Here’s an overview of search engine marketing from the perspective of a Greensboro, NC marketing firm. According to Wikipedia, the definition of Search Engine Marketing (SEM) is a form of internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) through optimization (both on-page and off-page) as well as through advertising (paid placements, contextual advertising, and paid inclusions).1 Depending on the context, SEM can be an umbrella term for various means of marketing a website including search engine optimization (SEO), which adjusts or rewrites website content to achieve a higher ranking in search engine results pages, or it may contrast with pay per click (PPC), focusing on only paid components.2

Due to the many intricate details in the complex technology of search engine marketing, a large number of marketing professionals and business owners do not understand the ever-changing nuances and methodologies so they rely on top ad agencies or marketing consultants for their expertise in managing their search engine marketing.

Spending on paid search has increased more than 20 percent from 2012 and with product listing ads, this will continue to grow. Your website will need to be highly optimized in order to be relevant in organic search or you will need to pay for search ads to target certain keywords and phrases. Mobil spending on paid search has also experienced a huge year with more than a 30% increase in 2012. If your search marketing campaigns are implemented by a professional marketing consultant or a top ad agency, your results with generating leads will be much better and your ROI will be much higher.

Spending on SEO to organically optimize your site will be very important as new surveys have shown increases in effectiveness for Organic SEO to generate leads. Hummingbird is focusing on original content relevant to the products or services so SEO will be very critical in 2014 and beyond. Paid and Social media will certainly generate new leads, but according to the latest surveys, Organic SEO is increasing while PPC has slightly decreased and Social has remained constant. B2B companies are seeing the largest percentage of leads from SEO with PPC and Social Media being quite a bit lower based on percentage of leads generated. The 2011 survey from WebMarketing 123 is available to view via PDF along with the 2012 survey from Web Marketing 123.

There are many areas of search marketing specialty under the main heading of Search Engine Marketing or Search Marketing for short. The sub-categories for branding, conversion, mobile, landing pages, public relations, search term research, ppc, social marketing and blogs are all very important to the overall search marketing category.

When a person is interested in a product or service, they will begin searching or hunting for those items via online sources. It could be found through text, video, or audio components. If they are hunting or searching, this should give you a very good clue that they are somewhere in the buying cycle. It could be driven by a search to fill an immediate need or potentially a future need. Whether captured through a paid or an organic source, these leads are very good quality as you have a captive audience who is already interested in the product or service. Your job is not so much to sell them on the idea of the product or service itself, but to educate and provide information on how your branded product or service can yield value to that consumer. What’s unique about your brand and how can you make their life easier?

Here’s a multitude of reasons why people buy things:

Marketing… (Had to do this one first since we are a marketing firm) Marketing makes you remember brands and it changes product perception. It not only gives the rational view, but also provides the emotional arguments or attachments to draw you in closer. Product design and packaging make the product sexy. Slogans or bi-lines ring in your ears when you think of certain brands. Music attachment with stars or celebs make products more memorable if partnered successfully. Many marketing experts are also very knowledgeable about the psychology of buying. And lastly on the marketing reason, did you really plan to get those snacks at the store, or was it the marketing promotion to buy one and get one free. (BOGO as some reference)

Creatures of Habit… If you go to the movies, will it matter whether the popcorn is piping hot or just luke-warm? In most cases, it will not matter because you will eat the popcorn out of habit whether it’s good or not.

Moods… If you feel good, then you are more likely to reward yourself with nicer things. If you are hungry or have craving, you are more likely to take care of your immediate craving versus putting that craving off for a longer term goal like a diet objective. If you are depressed or sad, you may make an impulsive purchase to try and lift the depression or sadness. If you are mentally exhausted from a long day at the office, you may give in to your kid at the store to get such and such item just to avoid the negotiations or arguments so you can get out of the store faster.

Temptation… Companies want you to try things that make you feel good or try things give you satisfaction. It could be succulent chocolates, a mixed drink, and products attached to your own image such as beauty products to make us look good, trendy watches, or designer clothes.

Impulsivity… If you see a sexy package, your brain receptors may default to reward and then you rationalize to justify the unnecessary purchase. Some people are affected by the advertising and marketing more than others and respond to ads, offers, and promotions because they feel because they are getting a deal, that it justifies the unnecessary purchase. ADHD will certainly make an impact with more product purchasing.

Peer Pressure… You sometimes get products simply because your neighbor has them. The product may not be worth a flip, but you still get it because the Smith’s have it. You see others in the community with certain shoes, clothes, etc. and you get them because others have them first so you can be like them.

How to Find Great Live Auctions for Resale Items

Hi, my name is Walt. I’m an auctioneer with 25 years of experience in the auction business and licensed in the state of MA. I own Quick Auction Service, a company that specializes in building and running custom auctions, I’m also the webmaster of my own site and have been on eBay for 8 years. Besides eBay, the types of auctions I run most frequently are antiques and on-site estate auctions, although I’ve run everything from business overstock auctions to charity & special event auctions.

I enjoy sharing my knowledge and stories of the auction business. My goal for article is to help folks get the absolute most out of their auction experience.

Whether your fresh out of the package or a seasoned dealer I think I can offer something in this article to help you with your auciton adventures.

There may be as many reasons to attend auctions as there are types of auctions to attend. Maybe you want to attend an auction to buy items for re-sale on eBay, or some other market. Maybe you want to furnish your home with wonderful antiques, or you want to furnish your home as inexpensively without sacrificing quality.Some folks are just looking for a fun night out. With a little perseverance all these things are possible.

There are antiques and estate auctions, auto auctions, overstock auctions, absolute and no reserve auctions, real estate auctions, specialty auctions where only one genre of items are sold, tailgate auctions, live auctions, online auctions, sealed bid auctions, silent auctions, charity and fund raising auctions and many more.

Can you really buy for pennies on the dollar at an auction? You bet! Many times I’ve seen folks buy and re-sell at the same auction on the same night for a good profit, although be advised, this should only be done after the auction is over.

There are a lot of ways to find an auction, but here are some tips on how to find and attend the best ones.

Visit the genre of shops in the area that apply to the type of auction you want to attend. IE: If your looking for a good antique auction to attend, stop in the local antiques shops and ask for what there are for good auctions in the area. Sounds obvious right? But listen to what they don’t say as well as what they do say. Oftentimes when a dealer speaks poorly about an auction he or she attends, it may be likely that they are trying to keep a good thing secret. Think for a moment, why would a dealer keep attending a lousy auction?

Newspaper ads: I personally like to find ads in the classified ad section rather than flashy display ads. Flashy ads are usually indicative of an auction that will be high priced, may have reserves, (a set price on an item), and usually an enormous crowd. While any auction can be profitable to attend, it is usually best to steer clear of the glitzy ones, at least for the beginner.

Here’s the minimum you want to find out before you go. If there is a phone number in the ad, call and ask for the terms of the sale. What forms of payment do they accept? Is it an absolute auction? An absolute auction is one that has no minimum or reserve bids on items. These are the best auctions to attend! Is there a buyers premium? A buyers premium is like a tax that everyone who makes purchases at that auction must pay above the winning bid price. Most auctions these days do charge a buyers premium, 10% is not unreasonable but I feel much more than that is greedy, and the auctioneer that charges over 10% is counting on most bidders not doing the extra math as the bids quicken in pace.

A fair auction will have ample time to inspect the merchandise, usually at least 2 or 3 hours. Find out when inspection starts and make sure to attend! Never attend an auction if you can’t make the inspection, not unless your prepared to gamble. Most auctioneers sell at a rate of about 100 items per hour, which is why they sell “as is”. They simply don’t have the time to give a detailed description of all the items. Since almost all items at auction are sold AS IS, there are sure to be some damaged, refinished, fake and incomplete items at any given auction. Beware of any auctions that offer very little or no inspection time.

Good auctions will usually have 150 to 400 lots. A lot may be one item or a group of items. The exception to this are specialty auctions, auto auctions, real estate auctions etc.

When you attend your first sale, take note of the 1/2 dozen or so dealers that buy the most often. See if you can find out about other area auctions they attend.

When you do find an excellent auction, attend it as often as possible. By frequenting good sales, you help increase the bottom line of that business. It’s difficult for many auctioneers to keep the quality of merchandise consistent, so good attendance certainly helps. And when an auctioneer gets to know you as a buyer, he/she will go out of the way to accommodate you, to keep you coming back.