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.

Establish A Mechanism for Home Based Business Sales

Are you struggling to generate a steady significant stream of home based business sales? Are you tired of not having enough home based business sales to offset your costs?What I’ve realized learned from some of the best retailers of home based business sales products is that you need to do this one thing really well to boast your revenues. It could be true that you may be an excellent one-to-one salesman and can probably sell ice to an eskimo. However, that is a very difficult skill to duplicate down an organization. Let’s face it: super salesman do not grow on trees, and very few amounts of people that you will come across will actively and passionately go out and sell for the sheer love of it.The truth is that most people are deftly frightened of sales.They don’t like it, they secretly feel embarrassed of the products they have to offer, and they feel sleazy for selling to people. So as a team leader, you must find a resolution that will take the individual pressure off of them but still be able to tap in to their networks. And what do the top retailers do?The best home based business sales retailers run events!OK… maybe that’s not a well-kept secret, but there’s a science to how you run events that determine whether or not you leave with a sale or empty-handed. Here is what separates a typical event from a selling event:1) You must provide value -Our most effective home based business sales events occur when we dispense valuable information to our target customer base. Case and point, my wife is a great retailer. She specializes in cosmetics, and as a company trainer, she is also a certified makeup trainer. She invested in herself to make herself in to a makeup expert and uses her expertise to boost her sales. She conducts general education classes and makeup workshops that target ladies who are interested in learning professional-grade makeup techniques that are simplified for everyday use.By providing this value, she is able to attract a larger volume of guests, which increases her chances of completing a sale, a powerful form of attraction marketing.2) Product Demos – If you’ve never done a product demo for your home based business sales events, you are losing valuable sales opportunities. One of the lessons that I’ve learned being in network marketing and seeing so many affiliate products, mine and others, is that most products are top-notch. Very few network marketing companies carry inferior products, but the downside is that they also don’t invest in mass market advertising, which is why you are involved in your home based business franchise. You are the marketing mechanism for them.Think about it: if demonstrations weren’t powerful, why would infomercials, Costco, department stores, and kiosks at the mall all utilize this strategy to draw you in?When you host your events, you should always focus on doing some sort of demonstration of your product after the general information has been covered. Make sure you pick products that have symmetry with the topic that you are covering at the event, else it loses its value.When doing your demonstration, be sure that if you are promoting a health and nutrition product, have a control piece as well. What that means is that you should have a demo without using your product to demonstrate to the audience the difference of using your product, and what it means to not use your product. For my website company, we have programmers sit down with the prospect and show them the capabilities of the website via live webinar to demonstrate the ease of use of our platform website builder.3) Have Roles -A well-run home based business sales event needs to have team unity where each team member knows their role in the sales process.- You always have a presenter who gives out the information. That person also does the demonstration.- Another team member sets up the demonstration while the speaker is engaging the audience.- A team member needs to greet the guests as they come in and help them get situated by filling out a questionnaire to extract extra information (i.e. “What question do you wish to address in terms of health and nutrition?”)- You need to designate a sales person. That person should be the “closer” that collects the payment and is responsible for upselling packages and promotional items.If you have a team that is well-versed in these tasks, then you will watch your sales revenues spike because it’s not reliant on one person doing everything.4) Build Packages and Promotions – Sales sell in a traditional business, and so too in a home based business sales event. Try to create promotional packages grouping several products together, or run a special on promotional items to entice customers to buy at the event. Make sure you stress that the sale is ONLY for this event so it creates a sense of urgency.Promotions that work best for us are bundles of several low-end items, as well as offering tiered pricing and incentives for purchasing a certain dollar amount. In comparison to events that don’t have packages, sales for packaged items always increase overall sales by 33-50% at our events.5) Always Promote the Next Event – We have a saying in our company: “Who’s the best speaker? The next speaker!”What that means is that one of the keys to genuinely strong home based business sales teams is that they always promote the next event before the current event is over. It opens up the opportunity for you to book your guests for the next appointment. It also allows your team to provide incentives for guests to invite their friends to the next event, which will organically grow your retail audience and increase potential of sales.Make simple, effective, and professional flyers for the next event and have them ready to distribute to the attendees. Give them a few extra to give to friends. If you use that incentive suggestion in the previous paragraph, they will no doubt be motivated to promote the event for you. We offer discounts for customer from the current who attend our next event.Conclusion: At the end of the day, it’s all about teamwork and commitment. When you have a group of entrepreneurs that are dedicated to generating significant revenues for yours and their home based business sales events, then you will have the beginnings of a fantastic lasting formula of success. If your speaker does a good job, they will have already done half the sale because they stressed the importance of why the product is needed. The demo moves the customer to want to buy, and the closer comes in and finishes the job. It’s a fluid sales process.Now that you have learned an effective mechanism to boost offline home based business sales, let me introduce you to a way to leverage the internet sales aspect too. Would you rather have only one channel of distribution, or two? Multiple streams of revenue are always a plus, especially if they work in unison.There are a lot more tips that we can share for running events, but to go on and on would take all night. If you can’t wait until our next piece for more retailing tips, then reach out to me via my blog and I will be glad to help.

Your Home-Based Business – Do You Have the Requisite Skills Set?

So you are giving serious consideration to starting a business and running it from home. Thousands of people just like you make that big move from the corporate office to the home office. While this is a great move for quite a number of those who do take that decision, the fact is the majority of small businesses fail in their very first year of operation, as much as 80%.While there are numerous reasons for this, one striking reason is an inadequate skills set of the business owner. In a home business environment this is even more crucial as there is usually only the owner running the business. So a critical question you should be asking yourself if you are thinking of starting a home-based business is, are my job skills transferable in a manner that will benefit my business?Obviously you would have to do a match between what you believe your business would need in terms of a skills set to execute your business plan effectively and your own skills set. So one of the first things you really need to address is your own skills inventory. Basically you will want to answer two questions with your personal skills inventory exercise – what are the work-place skills you now have, and at what level of competence each one is.Your next step is to go through your business plan which should give you a good idea of what skills you will need where and when. Determine those tasks that you will need to perform as the business owner, how often and in what time frame. Your objective here is to come up with a skills requirement chart outlining the requisite skills, how critical each is to achieving your goals, who will be carrying out the tasks, how often the particular task will have to be done, and over what time frame.You now have a fair idea of what your business require in terms of skills and what skills you have to bring to the business. It is now time to find the critical skills gaps that you will need to fill somehow. Once you have identified the skills gaps, you need to give some consideration how these will be addressed.Some steps you can take to fill the skills gaps identified are:* Take additional training to upgrade your skills.* For those tasks where you do not have the necessary skills set to perform, consider contracting these out.* Take on a partner to complement your skills set.Ensuring that you have the requisite skills in place to make your home-based business a success is one of the most important things you can do for your business. It will save you a lot of unnecessary headache and frustration as you are now much better equipped to execute your home business plan.


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