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.

The Quest For Affordable Small Business Health Insurance

Studies have consistently shown that small businesses are much less likely to provide health insurance to their employees than larger companies. Indeed, the smaller the business, the less likely it is to offer health insurance benefits. As recently as 2003, about 50% of the uninsured in the United States were either self-employed or worked for companies with less than 26 employees.

The main reason for this disparity is cost. Health insurance for small businesses is typically more expensive than for larger companies (on a per employee basis) because it is more difficult for insurance companies to accurately predict the average cost of medical care for a small group. That is, risk is greater for insurance companies for small businesses since small businesses have fewer employees to spread the risk of health claims. It only takes one employee with significant health claims to have a significant impact on the overall costs for the group insurance. This is also the reason why small businesses do not self-insure; the financial risk is simply too great for the majority of small businesses.

So what can a small business do if it wants to offer health insurance to its employees? Often they have no choice but to pay the premiums. More often than not they will split the cost of premiums with their employees, typically 50/50. Unfortunately, these small business health insurance plans are not only quite expensive, but also include significant deductibles and co-payments for the employees.

Small businesses can sometimes reduce their health insurance costs by either joining or forming a purchasing cooperative to negotiate better rates and benefits from companies offering small business health insurance. Depending on the type of business, professional organizations can also offer better health insurance rates to small businesses.

In their search for affordable health insurance, small businesses should obtain multiple quotes before deciding on any one small group plan. One of the best places to start the process is online. By using the Internet, within a very short period of time, small business owners can access dozens of quotes from several insurance companies, making comparison of various plans much easier.

Of course, as a small business owner, if you are not comfortable shopping for your small business health insurance on the Internet, look for a good health insurance broker. If possible, interview more than one broker, and ask your peers for recommendations.

In order to remain competitive in the labor market, small businesses need to be able to offer health insurance benefits for their employees. This is not always easy as cost can be a limiting factor. With some effort, however, small business owners can find affordable small business health insurance. Joining buying cooperatives or professional organizations, using the Internet (probably the most convenient), or contacting a health insurance broker can be effective ways to begin the challenging process of securing affordable small business health insurance.

Home Based Business Income Opportunities – 3 Great Tips

It might not seem obvious to you but let us look at the many information printed about home based business income opportunities out there. There’s just a ton of stuff to digest. What makes it worse is that there are so called ‘top marketers or six figure earners’ telling you this and that.

The one thing you must realize is that credibility is very flaky today and it is as easy as your common copy and paste technique. How do you know which ‘big guy’ is telling you the truth about his achievements in building such successful home based business income opportunities? That is what you will find out in the next few paragraphs.

Just do short Google, Yahoo or MSN search on some other articles on home based business income opportunities categories and you find nothing short of generic advice and baby steps. There is something missing. You surely must agree with me on this. They (top earners) tell you to join affiliate programs and find proven home based business income opportunities and get started marketing online.

Since you are here, surely the stuff they told you in certain articles about home based business income opportunities must be a joke. That kind of information about home based business income opportunities at that time is a thing of the past.

You want the latest and greatest tips about instantly profitable home based business income opportunities:

Great Tip #1:

Firstly, home based business income opportunities come in abundance in all types of compensation plan and marketing system. We commonly refer now as marketing these programs online over the web. You bet your horses that this is the best way to profit wildly with any home based business income opportunities. The only other factor is knowing how to market properly.

Great Tip #2:

Secondly, the system from good home based business income opportunities only works well when you work at it. Going online doesn’t take the work out of the equation so you need to get your mind set to be serious about this for your lifestyle. Taking good information and implementing them into your online marketing system is crucial to your success in home based business income opportunities.

Great Tip #3:

Third, no matter that people tell you online about home based business income opportunities, they are mostly telling you a story and not so much on the facts. The only real way is to get to know the site administrator either in person or by personal communication to see if they are genuine to you based on their responses.

The trust aspect is very important. Make sure you practice good character in promoting your various home based business income opportunities online.

Finally, home based business income opportunities are abundant. You should also know that being in a direct marketing system is a highly profitable way online. The reason is your commissions are instant in certain home based business income opportunities. Make sure you take the 3 tips to heart starting today.


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