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.

Differences in the Types of Auctions That Take Place Around the World

Auctions are those events where properties or goods are sold to the highest bidder. Auctions are mostly public events, where bidders make a series of bids and purchase a particular item for a high price. During auctions, bidders decide the price of an item rather than the seller. It depends on bidders to decide the amount they would want to pay for a specific item. During an auction, a bid is a proof of a legal binding. Bidders agree to pay the amount that they have bid. In a high profile auction, bidders may have to pay a deposit in escrow accounts or give a proof that they can pay for those items.

Types of Auctions:

Different types of auctions take place around the world. Below mentioned are some types of auctions:

1. English auction:
This is a basic type of auction. In this type, people can see the item and then start bidding. Bidders slowly raise the value of their bid until everyone gives up. The highest bidder is the winner. An auctioneer manages an auction, keeps records of the on going bid and decides the winner. Sometimes, the seller will quote a minimum amount for an item to the auctioneer, below which the auctioneer cannot sell that item.

2. Dutch auction:
In this type, the auctioneer sets a particular price and then gradually lowers the price. People in public will start bidding and later decide which prices are suitable for the item. A seller may use this type of auction to sell large quantities of same products to the public. For instance, a seller may want to sell a large amount of hay and will thus, decide to sell this hay to people for the same amount, once a reasonable price is decided.

3. Silent auction:
In this type, the bidders in public will present their bids in a sealed format. These sealed bids open at the same time and bidder with the highest bid wins. There could be a modification in this type of auction. The bidders are allotted a specific period to bid. They can roam in a room displaying the items, and write their bids on an associated sheet of paper. The bidders are allowed to see bids of other bidders and can choose a higher price for an item. At the end of the allotted time, bidder with the highest bid is the winner.

Examples of Auctions:

Auctions can be of two types either public or private. Sellers may trade any kind of items in both types of auctions. Some areas where auctions take place are:

1. Antique auction: An antique auction consists of a trade opportunity as well as provides entertainment.

2. Collectable auction: In a collectable auction, the seller may put up collectables like coins, vintage cars, luxury, stamps, real estate, and luxury for sale.

3. Wine auction: In wine auction, bidders can bid for rare wine, which may not be available in retail wine shops.

4. Horse auction: Bidders can bid for young horses of the best breed.

5. Livestock auction: In livestock auction, bidders can buy pigs, sheep, cattle, and other livestock.

The other examples of auctions may not be public. These auctions are for bidders from corporate levels. Some examples of private auctions are:

1. Timber auction
2. Spectrum auction
3. Electricity auction
4. Debit auction
5. Environmental auction
6. Auto auction
7. Electronic market auction
8. Sales of business auction

Bidders in an auction need to examine the items displayed and decide an appropriate price for an item. Thus, auctions help buyers in getting the best deals and in gaining better profits for sellers.

Home Based Business Vs Franchise Opportunity

When I Was looking to start-up my business I was looking around at many opportunity’s to see what suited me best so I did my research into different franchises and business opportunity’s to suit my budget. What I found in my research shocked me and I wanted to share my experience with you.I knew I had to invest money and time and I was prepared for that so after a lot of thinking I thought to myself I could maybe get into the Subway Franchise, Well there are loads of them around so they are popular and successful and we didn’t have one in our town of Cobham, Surrey so let me share with you my findings.Subway FranchiseI spoke to a few people and they sent me the breakdown of the cost on how much it will cost to set a Subway and when I looked at it I nearly choked on my sandwich ( no it wasn’t a subway sandwich ha) I had some savings that I was willing to invest but I wasn’t ready to see what I saw so let me share with you how much I needed to get started.I needed at least £70,900 to get started and I’m telling you now I did not have that and not even close to it I was thinking to myself how am I going to do this and I knew it would take around three years to see any profit and I wasn’t prepared to get a massive loan out. So my search continued……What was a passion of mine and it was Fitness as being a personal trainer so I thought let’s get into a gym franchise so again began my research.So after a bit of research and meetings about starting up a energy fitness club the finance part came up and I was dreading how much it would all be and was hoping it was not as much as the Subway Franchise but again how wrong was I the minimum investment to get started was£95,000There was no way I could afford that again so this idea was out the window.Then a lightbulb moment happened for me and I sat down and went through what I wanted out of life and that was…
A good Income
Time Freedom to see friends and family
No Boss
So these franchises was not going to give me that first of all the investment was well out of my range, I would have to work my butt off giving me no time freedom at all to see friends and family and I would have more stress then it was worth and wouldn’t see profit for at least 3 years it just didn’t match my goals in life so I knew there was only one opportunity for me and that was Start my own home based business.Home based business opportunityBut where would I start as there was so much hype and BS on the Internet we all know that but there is also some quality opportunity’s. I was sitting down and talking to a friend who started his own Video Production company and I was telling him about my ideas and he gave me one piece of advice that I will never forget and that was ” Find someone who has done it and been successful and work closely with them”That’s exactly what I did I met up with 2 awesome guys who have been very successful within the industry and starting working with them closely,They helped me get set up and then having ongoing support which is vital and the rest is history.OK but how much does this cost well I’m telling you now it is no where near £75,000 so I am going to break it down for you in a very simple wayThis is an industry that you need to learn so time and investment is needed.Serious entrepreneur- £1000-£3,000On a budget- £80 per monthThe great thing about the home based business industry is that it can suit people on all different kind of budgets that is why so many people are turning to the Internet. If you are really serious about building a home based business and going on to your way to a six figure income then I am going to be very HONEST I would say you would need to invest between the £1,000 to £3,000 mark this will get you all the training and support you need and more of a fast track way to get your business up and running ( I’m not saying it will happen overnight)BUT DO NOT FEAR…If you can not afford that it does not matter as you can start on a budget of just £80 per month to get up and running this will require more work and will take a bit longer to get it all running but people do it this way and go on and make a six figure income and we teach you how to advertise for FREE so you do not need to worry about that. If you are sitting there thinking I cant afford or don’t want to spend £80 per month then I am going to be very honest and would say starting a home based business may not be for you now.As you can see a home based business is more affordable than a franchise opportunity that’s why so many people are starting them because you can see results within months not years and again it gives you.
Time freedom to do the things you want to
your the boss you decide when you want to work
you decide how much you want to earn the more work you put in the more you will earn.
I wanted to give you an honest view on the franchise side of things and the home based business industry and I have been completely honest I could sit here and say earn £30,000 in your first 30 days and by the way I’m not saying you can not earn £30,000 within a month you sure can but it wont happen in the first month I just don’t want to give you any BS that you see on many websites I want to give you the truth so you know what it takes to run a home based business.


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