Estimating your assets worth:
Typically, one of the first questions a company owner will ask me is,”how much will the assets bring at an auction”. After taking the opportunity to review the assets, the auctioneer should give the client a conservative estimate of the sale based upon his experience and the present market trends. It is necessary that the company give sensible expectations so the seller can make informed decisions based on their very best interest.
Compensation and Expenses:
Is the organization you are considering working for you or against you? The arrangement you pick may determine this.
A business owner should carefully consider the way the auction business is compensated. The most usual commission structures include: direct commission, outright purchase of resources, guaranteed base with a split over to both auctioneer and seller, guaranteed base with anything above going to auctioneer or a flat fee arrangement.
At a straight commission structure, the business is paid an agreed upon percentage of the total sale.
Within an outright purchase arrangement, the auctioneer only becomes your conclusion purchaser. The company purchases your resources and relocates them. While this can be an option in certain exceptional situations, remember that they will want to purchase your assets at a extremely reduced price to make a profit at a later date.
At minimum base warranty, the auction company guarantees the seller that the auction will generate a minimum amount of sales. Anything over that number either goes to the auction business or split with the seller. While a seller might feel more comfortable doing a market knowing that he’s guaranteed a minimum amount for his sale, remember it is the best interest of the auction business to secure a minimum base price as low as possible in order reduce their financial liability to the seller and secure higher reimbursement for the sale.
At a flat fee arrangement, the auctioneer agrees to appear for the sale and telephone the auction. There’s not any incentive for the auctioneer to receive the best prices to your resources. The auction company is compensated regardless of the result of your sale.
What is the best alternative for business owners? In my experience, an agreed upon directly commission arrangement. This puts the obligation on the auction business to supply the very best outcome for everybody involved. There is an incentive to get the auction business to work for both parties, set up and operate a professional sale, receive the highest bid and sell each thing on the inventory. Successful auctions interpret to a higher bottom line for both the vendor and the auction company.
In most auction arrangements the expenses to run an auction are passed into the seller. If the auction provider pays for the costs, it’s simply absorbed in higher commission prices.
All costs should be agreed upon in advance in a written contract. Typical costs include the expenses of advertising, labour, legal fees, travel, gear rentals, security, postage and printing. A reputable land auctions Georgia will have the ability to estimate all costs based upon their own experience in prior auctions. An arrangement ought to be real costs charged as costs, not an estimated sum.
Promotion is typically the maximum price in running an auction. The auction provider should set up an advertising campaign that will promote the sale to the very best advantage and not overspend to simply advertise the auction company.
When the auction is done, the auction business should provide a complete breakdown of all expenses to the seller, including copies of receipts inside the auction listing report.
What is a buyer’s premium? In the event you attend auctions frequently, you’re very familiar with this term. The auction firm charges a commission to the purchaser when they buy an item at auction.
The buyer’s premium has been around since the 1980’s and is regular auction clinic. It was first used by auction houses to help offset costs of conducting mortar and brick permanent auction centers. Since then, it has spread to all facets of the auction market. It’s prominent in online auctions and allows auction companies to cover additional expenses incurred from online sales.
It is the obligation of the auction business to provide clear disclosure of the buyer’s premium to both buyers and the sellers. Those not familiar with stocks are usually taken back from the buyer’s premium. They looked upon it as an under handed way for the auction business to make more money. Reputable auction companies will provide full disclosure within the market contract, advertisement and bidder registration.
Usually, an auction company will charge online buyers a higher buyer’s premium percentage compared to those attending an auction in person. Extra prices are incurred with online bidding and are billed accordingly to online buyers. This gives the seller a level playing field for both online buyers and those attending the auction in person. Without the buyer’s premium, there’s no way to do this.
We have all been there. We are looking forward to attending an auction just 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 say that pre-sales will hurt an auction. When a company decides to liquidate their assets, it’s simple to market off high-end parts of gear through internet sources, equipment vendors or to other companies. The seller receives immediate cash and avoids paying a commission to an auction company.
Auctioneer’s find themselves appearing to behaving in a self-serving capacity when prospective clients say they’re planning to sell off parts of their inventory prior to an auction. It’s difficult not to consider the auctioneer’s commission when they warn you not to pre-sell anything. Yes, the auctioneer wants to make a commission on these sales . however, it’s more essential that the auctioneer protect the sale from potential bad backlash that comes from pre-selling. The purchasing public knows when an auction has been”cherry picked” before the purchase and it reflects in their own bidding. It will become a sale of”leftovers” and that affects prices.
A buyer who purchases prior to the auction usually doesn’t attend the sale. They already bought gear at a fantastic price with no contest. If they do attend the auction, then they are inclined to let others know of the great pre-sale purchases that again, impacts prices and the general excitement of the sale.
It is necessary to see that auctions work best with a complete stock. You want competition on your higher end gear. The easy to sell things make it feasible to gain respectable rates for hard to market things.
When a company owner decides to liquidate their equipment assets, there is just one opportunity to do it right. Employing a respectable auction business will assist you with a professional, orderly and timely liquidation.