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.

Four Elements of Small Business Success

The prospect of starting a small business may strike people as exciting, intimidating, or both. This is for good reason; the appeal of being your own boss and launching a lucrative business is tempered by the high failure rate of small businesses. A quick internet search reveals no shortage of studies providing causes and statistics regarding small business failure rates. While the exact rate of each study varies by industry and timeframe, most studies indicate that roughly half of small businesses remain in operation within a few years of opening.This reality invites the question of what makes the survivors successful? I recently had the opportunity to speak with a few small business owners, each of which owns a retail storefront. The purpose of my inquiry was simply to learn a bit about the challenges of being a small business owner, and even more so, to learn what has contributed to their survival and success.Factory Direct Trains is an Asheville, North Carolina-based online and storefront retailer of scale model trains. Factory Direct Trains specializes in HO scale trains, and has been in business for six years. The Music Shoppe is a music store located in Harrison, Ohio, a suburb on the west side of Cincinnati. The Music Shoppe, which has been in business for 21 years, sells musical instruments and offers instrument repair service and music lessons. Originally founded by three partners, the Music Shoppe is now solely owned and operated by one of the original three. The Practical Outdoorsman, which is also located in Asheville, North Carolina, has been in business for two years, and sells retail and consignment outdoor goods for hunting, fishing, camping, hiking, biking and paddling.In speaking with the owners of each of these three businesses, a few consistent themes emerged that were attributed to their success: conservative financing and the general avoidance of debt, a priority on customer service, business differentiation, and the service of an identified market void or opportunity.All three businesses started small, slow and deliberate, and did not go into debt to launch their business. Often small retail operations with comparatively little overhead can avoid business loans with proper planning. Each business owner interviewed began with his own money, and in one case, also the money of two partners. Launching with savings as opposed to financing carries the benefits of a heightened personal commitment, as well as the absence of the burden of third party debt. Business loans or some manner of external funding are often unavoidable in other businesses with higher overhead and fixed costs, but retail can offer more flexibility in this area, depending on the scale of the launch.A contributing factor to the low overhead of these businesses is the small number of employees, the largest of which employs four people including the owner. The absence of debt facilitated a business growth pace for all three, which was directly linked to the growth in sales and revenues. Conversely, some of the interviewees cited the opposite scenario in which a business owner, typically a rival, borrowed money to build a business that was of a scale larger than the market it served, and as such, the business was then unable to both service the debt and generate enough money to cover operating expenses.Commitment to customer service was emphasized by each business. The age of internet retailing and large discount box stores makes it imperative for smaller businesses to offer value through other means, as they generally cannot compete on price and selection. This is where the human element becomes critical. A personal selling effort and cultivated relationships with return customers, if managed properly, are able to win out over the appeal of larger retail options. Some people are willing to pay a higher price for a more personalized buying experience.Differentiation was another key factor identified by all three businesses. Something needs to set your business apart to draw customers through the door. As previously discussed, customer service is one area of differentiation when competing with box stores and online retailers. Customer service is the primary differentiating factor between The Music Shoppe and larger, national chain music stores.Other differentiation criteria were also cited. Factory Direct Trains competes in the scale model train industry. This business, which maintains a physical storefront but is primarily an online retailer, differentiates itself from its competitors by having a sophisticated web presence. Integral to this web presence is a robust and growing degree of social media connectivity. This is a relatively modern model in an aging hobby business. The social media participation makes a small company in North Carolina highly accessible to online customers all over the country and internationally and as such, social media is a key component of Factory Direct Trains’ customer service efforts.The Practical Outdoorsman is unique in that it offers retail and consignment outdoor gear under one roof. Additionally, this business carries local, handmade outdoor items such as hunting knives, fishing lures and flies, and hunting calls. Such products give The Practical Outdoorsman the appeal of local authenticity that is not found in the larger chain outdoor goods stores.Each of the three businesses has remained viable by serving a market demand that was either growing or previously under-served. Two market opportunities were dictated primarily by geography. The Music Shoppe opened in a suburb on the west side of Cincinnati that is roughly 20 miles outside of the city. Since the store’s opening, this suburb has grown significantly, and the Music Shoppe has grown along with the population and economy. The Music Shoppe secured dealer status for large music brands such as Guild, Taylor and Martin guitars, and thus serves as the nearest dealer for such brands for the west side of Cincinnati as well as southeastern Indiana.Research prior to opening revealed to the owner of The Practical Outdoorsman that the nearest similar consignment and retail outdoor goods store was located over 150 miles away. Additionally, this store is located in the northwest quadrant of Buncombe County where there are very few outdoor goods stores. The Practical Outdoorsman is also the only North Carolina Wildlife Agent in this quadrant of the county, which provides such services as selling hunting and fishing licenses. Serving as a Wildlife Agent generates significant customer traffic.Factory Direct Trains found its market niche by establishing a strong web presence in a hobby industry that has been comparatively slow to embrace online retailing and social media usage. In doing so, Factory Direct Trains has been able to reach out and expand its customer base in areas under-served by local hobby shops with more limited selections.Of the four elements discussed common to these three successful small businesses, all seem intuitive from an outside perspective. However, small business start-ups have a high failure rate, and even these seemingly obvious attributes escape some small business owners, who ultimately close their doors as a result. These four elements, debt management, customer service, business differentiation and proper market opportunities, are by no means a comprehensive list of the requirements for business success. The formula for business success contains many more variables than those covered in this article. However, the consistency throughout the three cited examples of debt management, customer service, business differentiation and proper market opportunities, underscores their importance as contributors to business success.

Top Legitimate Home Based Business Opportunities With Low Start-Up Costs

Starting a successful home based business is the dream for many aspiring entrepreneurs that possess a strong desire to leave the stress of the rat race once and for all. Unfortunately in the past the high start-up costs associated with starting a work from home business prevented many from indulging in this wonderful opportunity.However, there has recently surfaced several different ways to start your own home based business with a low start-up cost.These exciting opportunities have leveled the playing field allowing many more people to experience the joys and economical success with their own home based business provided they were willing to still invest the time and work effort required to run a business.Affiliate MarketingThis opportunity represents perhaps the easiest way to break into a successful work at home business venture but it generally does require finding a product or service to sell to potential customers and some knowledge of the Internet of required in order to truly reap the rewards associated with becoming an affiliate marketer.Still, the pay-off can be very lucrative when you get a selling funnel developed and implemented and with a small initial upfront cost for a domain name and hosting, affiliate marketing is a very doable business.Freelance OpportunitiesIf you possess a skill such as writing, drawing, graphic creation or website creation then perhaps the freelancing model might work best for you. In most cases with zero up-front cost to get started and no other expenses except for you internet connection fee the opportunity to become a freelancer can be very profitable indeed.Product CreationThis is a favorite home based business model for many online marketers because it allows you the freedom and flexibility to create a product based on your vision which can then be sold to people. The initial start-up costs may vary but generally you can create a product for under $500 and if the demand is high enough and you market it properly you stand a chance of having a five or six figure business on your hands. Direct Sales or Network MarketingThis is one of my preferred methods of making money with a home based business based on the low entry fee and potential ROI that can be achieved. Sometimes referred to as multi-level marketing or MLM, this work form home business involves sales. If you are an outgoing person with a natural sales ability and hook up with the right company in order to sell a quality product you could be on the verge of a six-figure business within a short amount of time.There are hundreds of thousands of legitimate home based business opportunities with low start up costs and the information above represents a quick overview of the many different possibilities.Finding the right home based business for you can be very exciting but you must be on the lookout for potential scams. Spend some time conducting thorough research and you will be able to find the right work from home opportunity that meets your dreams and desires.Are you in need of a work from home opportunity or home based business that really offers the potential to excel with a low start-up cost? As a successful California Scentsy consultant I invite you to check out the benefits available to you when you become a Scentsy consultant on my team.


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