Have an idea of the type of businessTo start a home based business online, it is helps to know which type of business you are interested in. It might be health and fitness products, affiliate programs, or freelance work. Join a business you will enjoy and make a great salary living off of. The internet is full of businesses. Maybe a few or many are fit for you. Do you know which business you are interested in creating or joining?Write a business planSecond tip to start a home based business online is writing a business plan. You should evaluate the business of your choice. Determine its strength and weakness. Furthermore, determine if you can live of the income you will be making. Gather as much information as possible. A business plan will change your outlook.Discover a NicheThird, identify your niche. A niche market is a large audience of people has a problem that does not have many solutions, in other words, an untapped market. Selecting a niche to start a home based business online is significant, because whatever business you join, you will have products or some service to offer. So, it is best to have a niche.Get Help from the CommunityPeople online have thousands of problems to be solved with their questions with starting their business online. A community full of experience people can provide helpful advice on how to establish your business. Receiving help from experts benefits the person in you. A community full of positive feedback and helpful information is what you need.
The Amazing Benefits of Having a Home Based Business
Since it became very popular, everyone wants to have his or her own home based business. Hearing the stories of success of millions of people will definitely invite you to join their online business. However, other than what these people told you, running your online business has more benefits. Here are some of the benefits that you will surely enjoy with your online business.Is spending more time with your family possible?You probably hate to stay in your home when you were single but now that you have your own family and kids to take care of, staying in your home and spending more time with them is something that you have been dreaming of for a while now. Working in front of your computer for few hours and earning more than enough money will allow you to see your children grow every day. You will get to know your children more and spend more quality time together. Your home based business will allow you to be with them during the most special times of their lives.Can you afford luxury vacations?Your family might be happy with weekends at the beach or holiday vacation in one of the best places in the country. But have you heard your spouse wish you can go abroad for a special vacation? Whether they ask for it or not, you can absolutely give them luxurious vacations here and abroad.Do you want to be rewarded for your work?Home based business allows you to be your own boss therefore; you are working for yourself and not for others. You earn less amount of money on your regular day job because you are working for others but now that the tables had been turned, it’s your time to earn more money.Is a stress-free work environment possible?A huge number of employees believe that their job and work environment are giving them too much stress. As an employee, you have probably experienced that amount of stress in your office. If you want a change and work in a better environment, you home is the best and the most comfortable place there can ever be. However, you can only stay and work in the comfort of your home if you are engaged in an online business.Is there a way to reduce your expenses?Your home based business will allow you to cut your expenses. Transforming your home into your personal office can also change the amount of tax that you pay each year. As a self-employed, this great bonus can come from new computer, software, phone and internet bill, increase in your electric bill and other things that you will write off.There are a lot of things that you wish you can do but you can’t because your responsibility to go to work and earn money for your family is holding you back. However, no matter how much effort you put in, you can’t seem to earn enough money that will support your needs and wants. If you want to change the way you earn money, start a home based business and it will make amazing changes in your life.
Toll Free Phone Number Benefits For Your Home Based Business
Starting a home based business is a journey of many difficult steps. After defining the company’s target audience and what goods or services to offer, the next task is establishing the company – developing name recognition, a reputation and client loyalty. Utilizing the capabilities of an established toll free, or 800, phone number can aid a home based business in doing all these things and more.As is the case with most start-up business ventures, creating a good first impression is paramount when connecting with the customer base. Unfortunately, one of the biggest hurdles that home based businesses face is that they lack a physical storefront. A tangible storefront provides ever-essential validity to a business’s reputation. Having a toll free phone number can help create a virtual storefront for any home based business.Many consumers see businesses that have an accessible phone number as a legitimate establishment. In fact, according to advertising research surveys, businesses that have toll free numbers are 30 percent more likely to receive product orders or customer calls than those businesses that advertise without such a number. So, even though the customer may not be able to walk by the business and visually see products or employees, they can still call a number and know they will get an answer and proper customer service.Furthermore, a toll free phone number gives a company the ability to sell goods and services outside the business’s local area. For a consumer, this means unlimited and unrestricted access to the business and what it has to offer. For the business itself, it means no limit on growth. Since the business isn’t physically nailed down to one area, the company becomes portable. This flexibility is especially important because if for some reason the home based business owner moves to a new home, the established connection to customers stays intact.From a marketing perspective, being able to offer a toll free phone number in promotional material presents the opportune chance of establishing a home business’s brand and reputation. Without appearing coercive, using a toll free phone number on company literature draws attention to the business’s credibility. This can be even more effective if the business owner chooses to incorporate a vanity number – a toll free phone number whose last seven digits spell out the business name or the product the company sells.This type of number makes it easy for the customer to remember how to reach an establishment with questions or orders. Additionally, the product or brand is perpetually promoted when the number is mentioned without any extra marketing cost. While surveys indicate the effectiveness of simple toll free phone numbers, they also suggest that ads bearing vanity phone numbers are 14 times more likely to receive a customer response than if they have a toll free number alone. This sort of number can put home based businesses on the same advertising level as those businesses with a physical storefront.Potential customers also respond well to 800 numbers because they know this method of business communication will cost them nothing. For example, if a business charges for phone consultations or services, customers will be unlikely to take advantage of their offers. However, providing a toll free phone number suggests to potential clients that a business holds customer service over the mighty dollar. This develops customer trust, ultimately resulting in successful, long-term consumer relationships.These relationships make toll free phone numbers a good opportunity to tout great customer service – something that smaller home based businesses can offer better than huge corporations with thousands of employees. If a customer has questions or concerns about the product or service, that person will be more likely to call if they know they are going to get an answer, not a long list of automated responses.Unfortunately, many home based business owners are under the assumption that their small budgets won’t afford a toll free phone number. However, the telecommunications industry is fairly competitive. As a result, toll free phone numbers aren’t as expensive as most assume. There are a number of online providers that offer monthly service that includes minutes and call forwarding. Most plans also allow for growth so a home based business can start off small and upgrade their plan as they grow.
Starting a Home Based Business
Starting a home based business is exciting, challenging and a little bit confusing. You are happy you decided to step out on faith and do what you love but it can also be overwhelming. You can easily get bogged down with a lot of tasks very quickly. If you are an entrepreneur who has started their own home based business, then this article will help you put things into perspective and really help you get an idea of where your focus should be.First things first..You also want to make sure you have your legal stuff in order such as selecting your business structure. Is it going to be a corporation, LLC, S corporation? You will have to file the paperwork with your local secretary of state office.Hopefully you have mapped out your goals and put a plan in place in order to reach them. If not, I suggest you work on this first. You are going to need a roadmap or business model that will show you how you will make money. If you need help with that I suggest you read books on goal setting or business plan development.You also have to establish a time for work. A lot of home based business owners find it hard to get things done because they are distracted. You are not working at a JOB where someone is making you work. You set your own hours and rules. Those hours and rules that you establish you have to stick to them. Knowing how long it takes to get things done or to produce a product will help you determine your pricing and billing.What is the key to a successful home based business?Selling. Many will say you need a great product or service. If you are one of them, then you do not plan to make much money in your business. Your product can be the greatest product in the world but if you don’t know how to sell it, it will just sit there. If you know how to sell and you learn the art of selling and you have a great product, then your are on your way to creating the life you want.The second is marketing. Getting your message out to as many people as you can and helping them make an informed decision to purchase your product is your next step. Most home based business owners find marketing expensive, and it is; so that is why many recommend starting small and scaling up as you generate sales. The best tool that you can use to really help you grow your business is the internet. The perk is you instantly create a global presence and immediately boost your creditability by marketing and selling to people from around the world. The internet is definitely the best way to go if you are looking to build a global empire.By the way, my name is Gloria Ward and I’m a online home based business marketing trainer. Check out my signature box for a free gift.
Should Struggling Small Businesses Consider a Small Business Administration Loan?
Many small businesses that are struggling with debt wonder if they should consider a small business administration loan. For many the thought of borrowing money when they are already in so much debt just does not make sense. However, this is a very special form of loan offered to small businesses to help them survive this terrible recession we have all been suffering for other businesses, a loan may seem like the only answer to their problems, and in fact they may be making the situation worse in the long term.Applying for a small business administration loan can be complicated and it can be difficult to understand all the legal issues and requirements associated with this type of loan. For this reason, it is always better to get some professional help and advice so you can access this loan without putting your business into further problems.Taking out a loan to get your business out of debt can, in some cases, cause more problems and weaken the business further. It is much better, if you are struggling with debt that you speak to a professional as soon as possible. They will be able to advise you on the best course of action. For some this may be negotiating with creditors, or arranging settlements of offer in compromise, but for some a loan may be an option. If you are unsure about what you should do to get your business out of debt, you should speak to a professional adviser urgently, before the debts get further out of control.While small business administration loans can be helpful, great care must be taken that it is really the best option, for many businesses, they could be putting their whole business at risk. This is why it is so important to get the right professional advice.Growing debt can very quickly cripple a small business, and in stressful situations like these, it can feel that the only answer is to borrow even more money; this is not always the best solution however.Small business administrations loans have helped many businesses get through tough times, but they must be dealt with correctly and professional advice is needed to establish whether this option really is the best way to get out of a financial mess.Instead of worrying, or rushing into borrowing more money, help your business and help yourself by getting the professional advice and support you need, so you will be able to get a true picture of your financial situation, and see all the ways you can work to getting your business out of debt and back on track.Then, once you have a clear picture of your finances, if a loan is the best option, an adviser will help you apply for it and help you through the entire process. For small business that are struggling and considering a small business administration loan, the first step is to know that there are answers, and help available and that they should not waste any more time, but get the help they need and deserve as quickly as possible.
Success Guide – How to Choose the #1 Home Based Business Opportunity
Thinking of starting your own #1 Home Based Business? When trying to decide if you should start your own Internet Home Based Business, there are many things to think about. This helpful guide will help you consider all the variables necessary for a new Home Based Web Business enterprise – especially those you didn’t even know you had to think about.
Many dream of starting a #1 Home Based Business, and enjoying self-employment and work at home income opportunities. But in the dream, getting that online internet home based business started usually isn’t in the picture. How is it done? Home Based Businesses are a huge new trend, and everyone’s trying to learn how to cash in. Today’s technology ages, and innovations with the Internet, have made almost anything possible. For those wanting to earn money from home, there are more options than ever. So, what’s the secret of starting an Internet Home Based Business online (and keeping it going, after that)?
Before I started my own online internet home based business, I was always wondering how easy or hard it is to work on a home base business… But now after a few good years since I started working from home I think I have the answer and I want to share it with you… The truth is, that depends upon your expectations, especially your financial expectations. And that’s because working on a Home Based Web Business will grant you a steady income without sacrificing your comfort and without a strict program – but in 99% of the cases you won’t be able to earn as much as you could doing the same time in a full time job. But for myself I consider that working from home and earning money from an online internet home based business is a great solution and your family will certainly appreciate it. However there are a few guidelines that must be followed. One of the biggest problems when working at home in your own online
Home Based Business is to find customers. So be sure that you never refuse a potential customer.
o Always deliver top quality work and you’ll see that the people will not only return to you with more work, but also recommend you to other people.
o Every time if possible ask for a testimonial which you can show to other people.
o The beginning (’till you make yourself a little reputation) may be harder so it’s a good idea that for the beginning to ask lower prices so people chose you.
o When you work from home you are not only a worker, but also a sales man and a PR person… so
o Remember that you should always be kind and nice with your customers and that your communication skills match your working skills. When planning how to start a home based business, play to your strengths. Consider both your talents and skills. A talent is something you are good at in general, such as interpersonal communication. A skill is something you know how to do. For example, you may have the talent of creativity, but you still have to learn the skill of drawing.
Once you have a list of your strengths, brainstorm for business ideas. No one but you will look at this list, so don’t censor yourself. Even ideas that seem impractical can prove successful if approached with the right frame of mind. Whether the idea is profitable, this is a critical and often-overlooked step when determining how to start the best Internet Home Based Business. Figure out what you can offer each month, whether in hours of service or products. Ask how much people will pay for it, deduct your expected expenses, and ask yourself if the profit is worth your time. Be brutally honest with yourself. Be sure you consider your local prospects rather than how a business might do in general.
The key to success when deciding how to start a home based business is never to forget that it is a business and not a hobby. This is particularly important if this is something you already do for fun, such as home decorating or making crafts, that you want to turn into a business. When you turn something into a business, much of the fun disappears. Now you aren’t decorating or making crafts for fun, you are working at home because you just filled a big order and need several products done by Tuesday. If you want to keep it as a hobby, selling the crafts now and then as the whim strikes, that’s perfectly fine, but don’t confuse it with a business. When running a online internet home based business, the rules are different. Act professionally, keep an eye on your bottom line, and be prepared to make the tough decisions any business owner has to make. One of the major reason small businesses fail is because they are treated as hobbies.
Why Yahoo Small Business Can Benefit Any Business
If you have a small business to manage, then you know just how difficult it can be. Although they are called ‘small’ businesses for a reason, it can take a full sized team to run a successful business of any kind, and between web hosting and web design, financial organization, marketing, online sales, and a variety of other positions that need to be filled, there are so many things that need to take place to grow a small business. And Yahoo Small Business is a great way to get your small business’s web presence off to the right start.
Between the web hosting services, their merchant account services, help with advertisement and customer service, and a number of other services that are offered, any small business looking to get a good start would benefit well from the many services offered by Yahoo Small Business. Whether building your first website or looking for Yahoo E-commerce and an online store, YSB has the tools and is your easy solution.
Yahoo Small Business Web Hosting Services
Being that Yahoo is a web based service, they excel at providing users with the necessary tools to improve their small business. Choose your own web address and domain name and personalize it with your very own professional grade website. The goal is to make your business thrive with an improved online presence.
If you get stuck, Yahoo provides 24 hour customer support, assisting you with questions related to down times, data transfer, emails, and more. The web design tools that are included are relatively easy to use with easily customizable designs, so you never have to worry about having your web site look like everybody else’s.
1,000 email addresses give you more than you could ever need for a small business, and with unlimited web storage and all of the benefits of Yahoo email, you are well equipped to give your business a boost. Everything is easy to use. Yahoo Mail Plus with SpamGuard keeps those nasty spam emails away from you and your employees, keeping computers safer and allowing your business to be more productive.
The Finer Points of Internet Auctions
WHAT IS A PENNY AUCTION?
Penny auctions have exploded in popularity with the massive growth of the internet. However, few people know the true origins of penny auctions.Beginnings actually stretch back to the Great Depression. Those were hard times for everyone, but even harder for farmers. Farmers struggled to bring in steady income because of droughts and crops not selling as well as they had previously. As a result, the banks would foreclose on the farmers who couldn’t keep up with their mortgage payments.
The banks weren’t satisfied with just repossessing the house, they wanted to raise as much capital as possible, so they resorted to selling off the possessions of the owners of the repossessed houses. There was not much the farmers could do about it so they began bidding ridiculously low prices, pennies, on the items while threatening others who dared to bid higher than a few pennies.
The auctions of today hardly resemble their tremulous beginnings. Being part of a penny auction today is exhilarating, fun, and addictive. It combines the selling format of auctioning with a little bit of chance factored in.Auctions are a game of strategy but also a game of luck.
The premise behind penny auctions is giving people the chance to win an item at a drastically reduced price.Auctions make that possible by spreading out the cost of the product among multiple bidders. In order for a person to take part in an auction, they must pay a set price for each bid. For example, if a person wanted to bid on a fifty dollar Amazon gift card then he would spend a dollar for each time a bid placed. If he ended up winning the gift card, then he would only have spent a few dollars for a fifty dollar gift card. Usually penny auctions sell bids in packages.
HOW PENNY AUCTIONS WORK!
The main foundation of penny auctions is the pay-per-bid format. It is the key that allows bidders to win items at the fraction of their retail value and allows the auction owners to keep their site profitable. Most y auction sites run on the same premise: people pay a set amount for each bid, whenever a person places a bid within the closing seconds of the auction time will be added, the last person left with a unique bid after the clocks runs out will win the item. There are a large variety of items that can be won, but they tend to be popular electronics or gift cards to popular stores.
There are two types of auctions: lowest unique bid auction and highest unique bid auction. Lowest unique auction sounds confusing but it is actually quite simple. A unique bid is when only one person has a bid at a certain price. Bids usually start at one penny, a bidder can then place a bid at two pennies. Until another bidder places a higher bid, the most recent bidder will be the lowest unique bid because that was the only bid at two cents and nobody bid higher. However, penny auctions generally don’t stop at one penny. It is not uncommon to find auctions that end up at a couple hundred dollars based on the popularity of the item being auctioned. However, the same principles apply for those auctions. Highest unique bid auctions follow the more traditional auction format such as eBay. The person with the highest bid at the end of the auction wins the item.
Auction site owners turn a profit by selling bids. Say twenty people are bidding on a ten dollar gift card at one dollar per bid, at the end of the auction if there were twenty bids placed in total then the site owner would have made twenty dollars with a ten dollar profit.Auctions do seem like a win-win situation:The site owner makes money while the bidder gets an item for dirt cheap. However, not everyone wins in penny auctions. The people who paid one dollar each bid but left with nothing to show for their investments will not be so happy.
HOW TO WIN!
Penny auction has a lot of chance mixed into it, but one can incorporate strategy that will help raise the chances of winning. Playing smart can make all the difference between gambling and auctioning.
The first crucial tip to winning penny auctions is to know how to manage your bids. Your goal should be to win as much as possible without spending a ton of money buying bids. Managing your bids means that you should already know how much you are willing to risk in order to win an item. The amount of capital you are willing to risk will determine how many bids you can use. Once you know how many bids you have to spend on an item, then you will be better able to manage how and when you place a bid. That will keep you from blowing away all of your bids in the first few seconds of the auction.
The next tip is to practice time management. When fighting in the trenches of penny auctions, you have two enemies: other bidders and time. Knowing when to bid is a must if you want to have success. Placing a bid when there is a lot of time left on the clock is never a good idea. You have to remember that the key to winning a penny auction is being the last one standing when the clock runs out and that each bid increases the amount of time left. It would be a good practice to wait until the last few minutes of the auction before you begin to bid.
The final tip for successful auctioning is to keep your emotions under control.Auctions have a lot of similarities to gambling, and just like gambling, your spending can get out of control. If you keep your emotions level, it will keep you from making rash decisions and blowing loads of cash. Keep your mind clear so that you can gage the behavior of the other bidders and outsmart them.
HOW TO AVOID SCAM SITES!
Penny auctions are a great addition to the web whether you want to win an item that otherwise you wouldn’t be able to afford or if you simply enjoy the thrill that comes with bidding in auctions. Unfortunately, scam sites have tarnished the reputation of the legitimate penny auction sites. However, there are ways that you can protect yourself from scamers and enjoy your auctioning without having to worry about losing your money due to dishonesty.
Checking the reputation of the auction site before you start spending your hard earned money is always a good idea. Chances are other people have tried the site before you and some of them have left reviews. The reviews are your way to gage whether a auction site is trustworthy or not. If a site is getting overwhelmingly negative reviews, then that is a clear indication that you should steer your business elsewhere.
Another tool you can use to protect yourself is checking the Alexia ranks of the auction sites. Alexia rank will give a solid view of how much traffic the auction is getting. If you see a huge difference in the amount of traffic Alexia is projecting and the amount of active bidders on the site, then warning signals should be ringing in your head. Some auction sites have been known to set up robots that automatically bid on projects in order to keep the auction going and inflate the price. That is known as shill bidding. You can sniff out those sites by comparing the traffic the site should be getting to the amount of users using this site.
CONCLUSION!
New legislation may come out later down the road that will officially make penny auctions gambling, but until then, it is a fun, exciting auction that allows one to win the item they’ve always wanted but couldn’t afford.Auctions are also quite lucrative for the site owners because of the pay-per-bid strategy they’ve incorporated. Penny auctions had humble beginnings with farmers who just wanted to get back at the banks who kicked them out of their house. More recently, auctions have enjoyed an explosion in popularity with the rise of the internet.
There are two main formats fora auctions, lowest and highest unique auction, however they both run on the same premise where the last unique bid wins the item. Winning a penny auction will require a certain amount of mental tactic and a bit of luck. However, you can increase your odds of winning by practicing certain techniques such as managing your bids wisely, learning how to work with the time, and keeping a level head and your emotions under control. When you combine those three strategies to your bidding plan, you will find that you win a lot more often.
It is important that you do your due diligence to protect yourself when participating in auctions. Not every auction is run by honest and trustworthy people. There are people out there who just want to take your money. You can protect yourself by ensuring that you only bid on sites that already have a very positive reputation from real users.
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.
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.