Estimating your assets worth:
Typically, among the first questions that a company owner will ask me is,”how much will the assets attract in an auction”. After taking the time to review the assets, the auctioneer must provide the client a conservative estimate of the sale based upon his experience and the present market trends. It is important that the firm give realistic expectations so that the vendor can make informed decisions based on their best interest.
Is the company you are thinking about working for you or from you? The arrangement you pick may determine this.
A business owner should carefully consider the way the auction business is compensated. The most common commission structures include: direct commission, outright purchase of assets, guaranteed foundation with a split over to auctioneer and seller, ensured foundation with anything above going to auctioneer or a flat fee arrangement.
At a straight commission structure, the company is paid an agreed upon percentage of the total sale.
In an outright purchase arrangement, the auctioneer simply becomes your conclusion buyer. The company purchases your resources and relocates them. While this is sometimes an alternative in some exceptional circumstances, remember that they are going to wish to obtain your assets in a extremely reduced cost to create a profit at a later date.
In a minimum foundation guarantee, the auction provider guarantees the seller that the auction will create a minimum amount of earnings. Anything above that amount either goes to the auction company or split with the seller. Even though a seller might feel more comfortable doing an auction knowing that he’s guaranteed a minimum amount for his sale, keep in mind that it is the best interest of this auction business to secure a minimum base price as low as you can to reduce their fiscal liability to the seller and secure higher compensation for the sale.
In a flat fee structure, the auctioneer agrees to show up to your sale and telephone the auction. There is no incentive for the auctioneer to receive the best deals to your resources. The auction company is paid regardless of the outcome 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 company to offer the very best outcome for everyone involved. There’s an incentive to get the auction company to work hard for both parties, set up and operate a specialist sale, get the maximum bid and sell each item on the inventory. Successful auctions translate to a higher bottom line for both the seller and the auction company.
In most auction arrangements the expenses to run an auction are passed to the vendor. In the event the auction provider pays for the costs, it’s simply consumed in higher commission prices.
All costs must be agreed upon in advance in a written contract. Normal expenses will include the expenses of advertising, labor, legal fees, travel, gear rentals, protection, postage and printing. A reputable auction company will have the ability to estimate all costs based upon their experience in prior auctions. An arrangement should be actual costs charged as expenses, not an estimated amount.
Advertising is typically the highest cost in running an auction. The auction provider needs to set up a marketing campaign which will encourage the sale to the very best advantage, not overspend to just advertise the auction company.
Once the auction is complete, the auction business should provide a complete breakdown of expenses to the vendor, such as copies of receipts within 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 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 clinic. It was first used by auction houses to help offset costs of running mortar and brick permanent auction facilities. Since that time, it’s spread to all facets of the auction industry. It’s prominent in online auctions and enables auction companies to cover additional expenses incurred by online sales.
It is the responsibility of the auction business to provide clear disclosure of the buyer’s premium to both the buyers and the vendors. Those not knowledgeable about stocks are often taken back from the buyer’s premium. They looked upon it as an under given way for the auction business to earn more income. Reputable auction businesses provide full disclosure within the auction contract, advertisement and bidder registration.
Typically, an auction company will charge online buyers a greater buyer’s premium percentage compared to people attending an auction in person. Extra prices are incurred with online bidding and are billed accordingly to online buyers. This provides the seller a level playing field for both internet buyers and those attending the auction in person. Without the buyer’s premium, there is no means to do this.
We have been there. We are looking forward to attending an auction just to find that some products were sold prior to the auction date.
As an auctioneer with over thirty-six decades of expertise, I can honestly say that pre-sales will harm an auction. When a business decides to liquidate their assets, it is easy to sell off high-end pieces of equipment through online resources, equipment vendors or to other businesses. The seller receives instant money and avoids paying a commission to an auction company.
Auctioneer’s find themselves emerging to acting in a self-serving capability when prospective customers say they’re planning to sell off portions of the inventory prior to an auction. It is difficult 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 these sales . however, it’s more essential that the auctioneer take care of the sale from potential negative backlash that comes from pre-selling. The buying public understands when an auction has been”cherry picked” prior to the purchase and it reflects in their bidding. It becomes a sale of”leftovers” which affects prices.
A purchaser who purchases before the auction usually doesn’t attend the sale. They bought equipment at a good price with no competition. If they do attend the auction, then they are inclined to let others know of their great pre-sale purchases that again, impacts prices and the general excitement of the purchase.
Farm equipment auctions Athens is necessary to see that auctions work best with an entire stock. You need competition on your higher end gear. The simple to sell things make it possible to acquire respectable rates for hard to sell things.
When a business owner decides to manage their equipment resources, there is only 1 chance to do it right. Hiring a reputable auction business will assist you with a professional, orderly and timely liquidation.