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.

Motivation And The Home Based Business Owner

Many people who start a home based business are not successful. The reasons why people fail will differ from person to person. I want to have a closer look at the theories of motivation to analyse some of the reasons for failure.

Take the first step in faith. You don’t have to see the whole staircase, just take the first step.” – Dr. Martin Luther King Jr.

Due to the structure of this industry, most of the home based business owners do not employing other people on a full time basis. They do not report to a boss on work progress on a regular basis, they do not interact with fellow workers on a daily basis as people working fulltime in a formal job do.

The motivation is totally different for the home based business owner. We must understand it to be optimally motivated every day in this environment.

Quite a lot of the people become involved in a home based business programme due to good salesmanship and not after they have done their homework. They have high expectations of making big bucks quickly, without much effort or work and study.

False Assumptions About Motivation And The Home Based Business

Many people believe that the motivation of people is only money and biological drives like hunger.

Studies have proven that the ability of money to provide motivation is very limited. It is only motivating people when they have a relatively small, simple task to perform over a short period of time. The more complex and long term the task is, the less money will be a true motivation factor.

Having a good lifestyle or the ability to travel and see the world will be considered by many people as nice to have. The big question is whether it will really motivate somebody to perform and work hard over time on a daily basis.

Most of the people that join a home based business group are motivated to join because of the guru or salesman telling them about the new lifestyle and the big money they can earn. The problem is that motivation does not last. It is not enough or a good enough motivating factor to keep that individual slogging and working hard every day.

I believe the fact that the real motivation of people is not being understood well enough in this industry by the gurus is one of the main reasons why so many people join but are not successful in making the big bucks that can be made with the programme.

Newer Theories Of Motivation And The Home Based Business Owner

People will not be motivated in their daily task if their basic needs are not satisfy. Their basic needs are not necessarily the potential better lifestyle or big bucks on some future date.

People are only motivated in the long run if they are doing something that is their passion or that interests them, something that they feel is meaningful. They must have a feeling of being part of a community. They must work for, be part of, and believe that they are working towards something much bigger than themselves. They must build a legacy. This legacy is not the life on the beach or travelling.

Understanding these true motivational factors of people is missing in the marketing strategies of most home based business owners when they sell their product and try to motivate people that have joined their team. Let’s have a closer look at them.

Autonomy And The Home Based Business Owner

One of the big motivational factors for people is autonomy. This is the beauty of the home based business. This is the kind of job somebody can do where he does have absolute autonomy. He has control over his time, tasks, techniques and the people he wants to work with. He does not have a boss to report to.

The home based business owner has complete autonomy over everything he does. He must develop his own business plan, set his own goals, develop his own time scales, decide for himself on his training programmes, and have his own daily plans.

I believe the importance of this as a motivational factor is not being used properly in this industry. Reasons for failure are due to the fact that many people starting out in this industry do not understand all the basic processes involved in planning a business and managing it on a day-to-day basis. More assistance is needed to assist home based business owners in this.

Mastery

“We are what we repeatedly do. Excellence, therefore, is not an act but a habit.” – Aristotle

People are motivated if they feel that they have learned something, have developed a new skill, applied that skill successfully, and are making progress in the development of their own abilities. They must see and feel the progress. They must be able to measure and evaluate their progress regularly. The athlete preparing for a big event has a training programme. He knows where he wants to be on a specific future date. He is planning his daily exercise programme and is monitoring his progress regularly. That is the only way he can be assured that he will be in top physical form and mental state on the day of the competition. He is being motivated daily during the slogging period of exercise and preparations because he has a dream, a goal, a plan are taking action, monitor his progress daily and give him feedback on the progress.

The same principle applies to the home based business owner. He must know what he wants to achieve. He must have a plan on how he wants to get there and he has to monitor his progress daily.

There is so much knowledge that a home based business owner has to master and learn. He can be overwhelmed by that. He might not have a plan and priorities. By taking small steps every day he will not be motivated daily to keep on taking action and to work towards his goal. He will lose interest.

Purpose

Money or profits have a limited ability to motivate people. We are motivated in the long run if there is purpose in our life. We want to belong also and be part of a bigger community. We want to contribute to others. We want to find meaning in life. In his theories of motivation, Maslow called it self-actualisation. There must be a purpose bigger than ourselves in life.

I believe that in the home based business industry this is not getting enough attention. People are losing interest and becoming demotivated because the emphasis in the industry is on the “self”; my lifestyle, my travel, the way I want to spend my time, I do want to earn big bucks fast.

We must develop a way to motivate people by giving them a bigger purpose in their lives that they can work for or be part of. Every day they must feel that through their daily actions or work, they will improve their own financial situation, but they will also contribute towards the lives of other and build their legacy.

The home based business must look at the integration of social entrepreneurship as an integral part of the industry. We must also develop ways to support and motivate people working with us.

The Lessons For The Home Based Business

“A real decision is measured by the fact that you’ve taken a new action. If there’s no action, you haven’t truly decided.” – Tony Robbins

It is a science to motivate people and keep them motivated. In the home based business programme, there are too many people who start but lose interest after some time. The rate of failure is too high. If failure is being defined as people not achieving in the industry what they believed they could or should have achieved, the real reason for this must be determined. My view is that the importance of the correct application of the basic theories of motivation is not being applied correctly in the industry.

The nature of the home based business lends itself to apply the theories of motivation much better. The environment to motivate people is much better than in the more formal work environment. By applying some of the theories of motivation in our business, we will make more people successful and in the process everybody working together will be more successful.

Join our team and we will keep you motivated. Your success is our success. You can reach the sky if you dream-it-plan-it-do-it daily. It will not happen overnight but remember it is a journey to your goal, not a happening.


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