Kenny Lindsay, CPPA, CREA, PA
Professional Certified Auctioneer

 

Don't items sell too cheap at auction?

Many people see auctions as an outlet that generates below wholesale prices. It is those prospective bidders that come to auctions with a preconceived notion they will be able to purchase items at dirt cheap prices. However, in the majority of the cases, the bottom line is just the opposite.

There are situations where items can be bought for 'cheap prices' and I'll explain this here. The term 'auction' is the lure that brings prospective bidders to the auction in the first place because there is a genuine opportunity where the bidder can obtain the property at a very desirable price. Since the bidding begins well below the estimated value of the item, there's always that chance for 'the deal of the century'.

The largest reason an item sells too cheaply at auction is due in part of a lack in marketing skills with the auctioneering company. In my professional opinion, the majority of auction companies throughout the United States fail in the marketing campaign by not promoting the auction to the ideal target audience. Many rely solely on their established mailing list which attracts the same and stale clientele. I know of one auctioneer that boasts that he knows all his bidders by name.

A professionally marketed auction will establish enormous prices for the key items. Auctions are ideal - you're showcasing your goods in front of a large audience in a fast moving, competitive bidding atsmophere.

Did you ever sit back to think why famous celebrities and athletes resort to the auction method of marketing to dispose of their assets? Professionally operated auctions are effective making the auction method the first choice not the last resort.

How much do you think our estate will bring?

This is a great question to ask any auction company that you're considering doing business with. Here's the tip: If the auction company responds with an monetary figure - for example; "Oh, I think what you have here will bring somewhere around the $25,000 range." - WALK AWAY AND DON'T WASTE ANY MORE OF YOUR TIME!

Sound's extreme? Absolutely. Regardless of experience, no auctioneer should be capable of answering such a question. A properly marketed auction will attract fresh bidders which ultimately over rides the 'regulars'. If an auctioneer does answer this question with a monetary figure, he knows his audience much too well and more than likely he's fabricating a price to win your business.

Remember to ask this question right away when you're qualifying an auctioneer.

What should I look for in an auction company?

THE FIRST QUESTION YOU SHOULD ASK. For starters, ask the qualifying question to the auctioneer about "How much do you think these items will bring at auction?" If they respond with a price - move on.

COMPETENCE. Secondly, it's important that you are dealing with an experienced auction company who appears to be very knowledgeable about the auction business. However, don't place too much emphasis on how educated the auctioneer is about the details of your specific goods - although knowledge is helpful in a specific field (farm equipment etc.). What's important is the auctioneers marketing strategy, personality and organizational skills.

PROFESSIONAL AFFILIATIONS! It's important that the auctioneer has professional affiliations with the Michigan State Auctioneers Association and the National Auctioneers Association. Such organizations adhere to a strict code of ethics which adds creditability to the auction firm. In addition, such organizations are passionate about continuing education of the auctioneer. The auction industry is rapidly changing and it's critical that the auctioneer that you chose to conduct your auction is well versed in the latest technology, marketing and other segments that have a direct impact on YOUR AUCTION.

THE WANNA BE AUCTIONEER. You should be very much aware that the State of Michigan does NOT require any special auctioneer licenses in order to conduct business. However, there is a voluntary registration that most legitimate auction firms take part in.

In other words, anyone can call themselves an 'auctioneer'. This makes your job of hiring a competent auctioneer more difficult as you have to seperate the hobbiest auctioneer from the real deal. After all, all auctioneers look the same in the phone book so you really need to do your homework on which auction firm is truly out for your best interest rather than the so-called 'auctioneer' that is out to make a few bucks on the side.

FULL TIME AUCTIONEER! Look for a FULL TIME auctioneer who is able to dedicate the tremendous amount of time that's necessary to coordinate and execute the extensive marketing plan of your auction. If you choose to hire a PART TIME auctioneer, then you're cutting yourself short right out of the gate. Suppose that someone in your family required a major operation. Would you even consider hiring a part-time surgeon? Okay, what about an attorney? Would you really want to hire an attorney that works part time?

INDUSTRY RECOGNITION. What awards, association committees, honors and accolades has your candidate been branded with? Such industry recognition is not easy to come by and is a very important detail you should be looking for. There are auctioneers that take a lot of pride in their business and others that are not. How would it make you feel if the auction firm you selected won a marketing award due to hard work from YOUR auction? Such recognition speaks high volumes about that particular auction firm.

DON'T SHOP COMMISSIONS! What it can cost you by shopping on price can be devistating to the success of your auction. To use a little baseball analogy here, who would you rather on your team? Babe Ruth or the Bench Warmer? The heavy hitters (who you want!) come at a price whereas the bench warmer will do anything to get on the field. A truly professional auctioneer will NOT cost you money, they will make you money so don't step over a dollar to pick up a penny.

AUCTION DAY DOCUMENTATION. Another important feature is to find out if the auctioneer video tapes and/or audio records the entire auction. Such evidence is important documentation in the event of a price discrepancy after the auction is over. If the auctioneer admits to not recording his auctions, you need to reevaluate everything that you have considered up to this point. Not only should this be a common sense business practice on the part of the auctioneer but it's also a part of the organizational skills we talked about earlier.

MORE QUESTIONS TO ASK. Ask your potential auctioneer a series of questions. For example: "How much do you think these items will bring at auction", "How do you intend on marketing the auction", "What fees am I responsible for?", "How soon after the auction do I get paid?" "Do you video tape or audio record the auction?" etc. etc.

TRUST YOUR GUT. Trust your instincts and make sure that there is a written agreement where both you and the auctioneer sign.

Do I have to attend the auction?

We prefer to have you in attendance or something equivalent so you can witness the entire auction experience. However, we're very empathic to the reason that sometimes an auction can be very emotional for the family when an entire lifetime of memories are being sold to the highest bidder. American Eagle Auction Company video tapes and/or audio records each and every auction which is available for your viewing or listening reference.

We're having some family disputes about who should get a particular item out of my deceased uncle's personal property. What should I do?

There's only one thing to do. Sell it at auction! Assuming that you're the executor of the estate, take charge of your leadership role - inform and invite your family members to the auction where they can actually bid on the item and all they have to pay is the commission of the sale. Let's use this as the example: Let's figure the commission is X% and your brother Joe is the successful bidder of your uncle's shotgun at $200.00. All your brother has to pay is a lousy $XX.XX. This method is fair and relieves you of unnecessary stress. There you have it. Show us your problems and we'll show you the solution!

Where will my auction be located?

This is determined on a case-by-case basis. However, we have found that auctions being held on site (at your location) is most cost effective and is recommended in the majority of the cases.

It is best if estate auctions are held at the estate. However, some limitations may prevent or hinder this preferred method. We have conducted live auctions onsite in metro Detroit, Ann Arbor, Livonia, Grand Rapids and throughout the State of Michigan.

In situations where there are fine arts, high end collectibles or multiple real estate then we prefer a ballroom setting.

If I call you today, how soon will my auction begin?

From the day the agreement is signed your auction will take place between 30 and 60 days. This allows us the necessary time to aggressively market, promote and organize your auction to ensure maximum success.

'Short notice' auctions are common within the auction industry and can be extremely successful based on the urgency of the situation. However, the auction must be professionally marketed and a classified ad in the local newspaper isn't going to cut it.

 

Do you have any kind of an affiliate program?

In the business world, the most effective method of advertsing simply cannot be purchased - it's called 'word-of-mouth' advertising.

Now think about it. How many products and services have you purchased because a close friend, family member or business associate highly recommend it? Probably the greatest example of the effectiveness of 'word-of-mouth' advertising is the Internet. What actually inspired you to take that step to purchase a computer and get on the Internet? For the majority of us, it was because of all the buzz about how great the Internet is and we usually heard it repeadly from friends and family. The next thing you know is you have this faceless voice in your home saying; "You've got mail."

Although we cannot purchase 'word-of-mouth' advertising we are very enthusiastic about compensating you for any leads that evolve into an appraisal or an auction. If you're in the know of a friend, family member, acquaintance or business associate that may need the professional services of a highly qualified certified auctioneer and appraiser - please suggest that they should check out American Eagle Auction Company.

The key to success is not to cut corners but to pave new paths. To ensure our success we must recognize and pay for the cost of doing business in all aspects.. It is for this reason that we have an established and organized affiliate program. By referring business to us, you have ensured yourself a paycheck that can reach into the thousands of dollars. Naturally, your compensation is based upon what services are rendered from your referral.

 

 

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This site is dedicated to the auction method of marketing and appraisal services in the state of Michigan by auctioneer Ken Lindsay of American Eagle Auction & Appraisal Company. We provide services in Ann Arbor, Grand Rapids, Livonia and throughout Metro Detroit.