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.

Universal Elementary Education – An Experiment in Karnataka

Parents of the 32 students studying in standard seven in a school at a non-descript village in the Karnataka State of Southern India staged protests last June. The reason? They wanted their children, especially girls, to continue their education beyond the seventh standard, without travelling to neighboring villages; and the local school in the Tigalarapalya village where they were studying so far did not have classes beyond seventh. So they forced the authorities to add higher classes to the school.

Yet in 2000 and 2001, the same parents had resisted when the government officials, volunteers and non-government organizations pleaded with them to send their children to school. They preferred to send them to work in the silk-weaving factories which abound in their villages, so they could clear the loans they had taken from the factory owners. The rural district of Magadi on the outskirts of Bangalore city has many such villages, where the children work in hazarduous factories. Magadi Makkala Dhwani – a group of four non-government organizations, supported by UNICEF, had then approached both parents and factory owners and educated them on the rights of children and sensitized them to the hazards of working in factories.

The most heartening feature about the protests is that these were not headed by NGOs. It was a protest by the parents and students,which showed the concerted efforts by Magadi Makkala Dhwani had paid off in creating awareness about the importance of education.

Another interesting incident occurred last August. Around 26 child labourers were admitted to special residential schools after they were rescued by deputy Labour Commissioner and a team of inspectors and representatives of NGOs working on the pilot project introduced by the UNICEF and Norwegian Agency for Development. The three-year NORAD-UNICEF pilot project was implemented through Karnataka Government in 2002 as a test case in the districts of Davangere and Gulbarga. Since the last two-and-half years, the NORAD-UNICEF office succeeded in rehabilitating about two thousand child labourers working in chronic work situations in the two districts. Several self help groups and youth organizations took part in social mobilisation and mass awareness programmes like enacting street plays on the evils of employing under-aged children and the importance of sending them to school.

The ball that was set rolling in the 90s in the wake of the National Policy on Education through numerous programmes such as World bank-assisted District Primary Education Programme (DPEP), has gained momentum in the last five years through Sarva Shiksha Abhiyan, the integrated national programme for Universal Elementary Education, which aims to provide quality education for children between the ages of 6 and 14 years by 2010. The drive, launched in 2001, aims to reduce the number of children who are out of school, narrow gender and social gaps and improve the quality of education.

Education is the only hope for India to change its current status of a “developing country” into a “developed country”. And she cannot make this change happen unless she ensures that the 59 million children out of the 200 million children in the age group of 6-14 who are currently out of school enrol in proper schools and learn.

What is keeping these 59 million children outside the school? Problems of access, poor quality in school processes, lack of participation by the community in the school affairs and poverty are among the key barriers to universal education. In Karnataka alone, over 300,000 out-of-school children have been mainstreamed during the past three years. But what is causing concern is the national average drop out rate for children in 1-8th standard, which stands at 57% and an alarming dropout rate of 60% for girl children for the same standards.

Once children reach school, a variety of factors determine whether they will learn and acquire the skills to pursue formal education or drop out. In many cases, a child from a poor/rural family is unable to comprehend and cope up with the pace of other formal school children. Teachers are not able to identify or diagnose the competencies that a child lacks and provide him/her with supplementary teaching. It is not uncommon to come across children who have been to school but remain functionally illiterate. Disillusioned youngsters, who may have completed primary schooling and are unemployed, act as a disincentive for education of other children in the community. Younger children and their families see the writing on the wall – primary education does not always improve the situation of the poor unless what they learn is perceived as being relevant to their life situation.

The enrolment drives for out-of-school children, child labour projects and innumerable remedial education and bridge courses have emerged in the last 10 years, started by district and local government authorities and assisted by NGOs, corporate bodies, local business and the community. These bridge or condensed courses have helped children to re-enter the formal stream, prevented dropouts and improved the learning achievements of children in school.

There have been several initiatives taken by private institutions, or government in partnership with the private institutions, that have borne good results.

The Nali-Kali(literally, dance-learn) strategy of teaching developed by teachers in Mysore has adopted creative learning practices to help retain children in school and bring in those not attending school. This method creates the right ambience for the child to learn in a child-friendly fun-filled way through educational toys, songs, games, story telling, all made by the teachers themselves. This method eliminates the formal system of roll calls, examinations, promotions and ranking.

The initiative has helped improve enrolment, particularly of girls, and has been expanded to cover more areas within Mysore and 10 more districts in the state.

The Akshara Foundation, an initiative with the Infosys backing; has worked in the slums of Bangalore to touch the lives of over 60,000 children in and around the city of Bangalore. The young children do not have to follow their mother to her workplace as she goes out to earn her livelihood. Mother of Satisa, who studies in one such pre-school, says happily, “my son does not loiter on the road when I am out on construction. He has learnt to read and write!”

To take care of children who have to work to earn a livelihood Akshara and CWC (Concerned for Working Children) have partnered with the Department for Public Instruction to start Transit School Program in 8 pilot locations in the city. Transit schools are open from 8 am to 8 pm for the convenience of the children. Working children come to the centers (mostly in government schools) at convenient times during the day.

Azim Premji Foundation focuses on “quality of education” and what happens inside a school, taking note of the numerous initiatives taken by the government. Its CEO Mr. Dileep Ranjekar says that their programs demonstrate “proof of concept” that can be replicated at a large scale in the government system. The Accelerated Learning Program and the Child Friendly School are examples of such programmes.Large numbers of children have been mainstreamed through specially devised bridge courses.

The foundation has developed CD based, child centric and interactive curricular content in local languages that is being used by thousands of schools across five Indian states. The CDs are free for all government school and non-government schools that cater to children from socio-economically weaker sections. Other schools can have it at a very nominal charge.

Mr. Dileep Ranjekar says, “We have tried to use IT to enhance the curricular learning of the children as well as to create excitement in the schools. The attendance of the children is significantly up on the days they are scheduled to work on the computers.”

There are some more remedial steps that government/NGOs can take:

  • Mobilise and organize working children into a self-managed association/organization. Educate them about their rights – right to education, freedom from exploitation, hazardous and non-hazardous work, nutrition and emotional and physical well being.
  • Take a close look at what is happening inside the school. How are children- girls, children from disadvantaged groups, children in difficult circumstances treated?
  • Set up a help-line line to reach out to working children in distress, confront and work with the government, and employers to ensure the rights of children.
  • Encourage older children to talk about their future – training, employment and self-employment opportunities and link education with future prospects.

How to Find Great Live Auctions for Resale Items

Hi, my name is Walt. I’m an auctioneer with 25 years of experience in the auction business and licensed in the state of MA. I own Quick Auction Service, a company that specializes in building and running custom auctions, I’m also the webmaster of my own site and have been on eBay for 8 years. Besides eBay, the types of auctions I run most frequently are antiques and on-site estate auctions, although I’ve run everything from business overstock auctions to charity & special event auctions.

I enjoy sharing my knowledge and stories of the auction business. My goal for article is to help folks get the absolute most out of their auction experience.

Whether your fresh out of the package or a seasoned dealer I think I can offer something in this article to help you with your auciton adventures.

There may be as many reasons to attend auctions as there are types of auctions to attend. Maybe you want to attend an auction to buy items for re-sale on eBay, or some other market. Maybe you want to furnish your home with wonderful antiques, or you want to furnish your home as inexpensively without sacrificing quality.Some folks are just looking for a fun night out. With a little perseverance all these things are possible.

There are antiques and estate auctions, auto auctions, overstock auctions, absolute and no reserve auctions, real estate auctions, specialty auctions where only one genre of items are sold, tailgate auctions, live auctions, online auctions, sealed bid auctions, silent auctions, charity and fund raising auctions and many more.

Can you really buy for pennies on the dollar at an auction? You bet! Many times I’ve seen folks buy and re-sell at the same auction on the same night for a good profit, although be advised, this should only be done after the auction is over.

There are a lot of ways to find an auction, but here are some tips on how to find and attend the best ones.

Visit the genre of shops in the area that apply to the type of auction you want to attend. IE: If your looking for a good antique auction to attend, stop in the local antiques shops and ask for what there are for good auctions in the area. Sounds obvious right? But listen to what they don’t say as well as what they do say. Oftentimes when a dealer speaks poorly about an auction he or she attends, it may be likely that they are trying to keep a good thing secret. Think for a moment, why would a dealer keep attending a lousy auction?

Newspaper ads: I personally like to find ads in the classified ad section rather than flashy display ads. Flashy ads are usually indicative of an auction that will be high priced, may have reserves, (a set price on an item), and usually an enormous crowd. While any auction can be profitable to attend, it is usually best to steer clear of the glitzy ones, at least for the beginner.

Here’s the minimum you want to find out before you go. If there is a phone number in the ad, call and ask for the terms of the sale. What forms of payment do they accept? Is it an absolute auction? An absolute auction is one that has no minimum or reserve bids on items. These are the best auctions to attend! Is there a buyers premium? A buyers premium is like a tax that everyone who makes purchases at that auction must pay above the winning bid price. Most auctions these days do charge a buyers premium, 10% is not unreasonable but I feel much more than that is greedy, and the auctioneer that charges over 10% is counting on most bidders not doing the extra math as the bids quicken in pace.

A fair auction will have ample time to inspect the merchandise, usually at least 2 or 3 hours. Find out when inspection starts and make sure to attend! Never attend an auction if you can’t make the inspection, not unless your prepared to gamble. Most auctioneers sell at a rate of about 100 items per hour, which is why they sell “as is”. They simply don’t have the time to give a detailed description of all the items. Since almost all items at auction are sold AS IS, there are sure to be some damaged, refinished, fake and incomplete items at any given auction. Beware of any auctions that offer very little or no inspection time.

Good auctions will usually have 150 to 400 lots. A lot may be one item or a group of items. The exception to this are specialty auctions, auto auctions, real estate auctions etc.

When you attend your first sale, take note of the 1/2 dozen or so dealers that buy the most often. See if you can find out about other area auctions they attend.

When you do find an excellent auction, attend it as often as possible. By frequenting good sales, you help increase the bottom line of that business. It’s difficult for many auctioneers to keep the quality of merchandise consistent, so good attendance certainly helps. And when an auctioneer gets to know you as a buyer, he/she will go out of the way to accommodate you, to keep you coming back.


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