If you run an online home-based business and you behave like a mere consumer, then don’t be surprised if all your efforts at growing your business is undermined by this mindset.Businesses make rational buying decisions after careful thought and based on a good feel for how what they are buying fit into their business model.Consumers make decisions based on impulse and what they feel will bring them satisfaction.If you are going to be successful in your online home-based business you have to understand this distinction.How do you adopt the mindset of an online business-person rather than a mere online consumer? Well maybe if you understand the implications, then this will force you to adopt the correct mindset.The implications from behaving as one or the other for your business are huge. And especially so if your business is home-based and run online.Every marketer trying to sell you something online is selling you based on their perception of you as the consumer who will instinctively pick up that tempting chocolate bar at the check-out.Not as a shopper who entered the store with a list of what is required and who is going to buy only what is on that list. And certainly not as an operator of an online home-based business having specific requirements.If you operate with the mindset of the consumer, each of your purchasing decision is most likely going to be driven by the mindset of a mere consumer. Not the mindset of a business person.That is because your online activities are most likely not based on a business model that have specific requirements, but are based on a purely money-making model looking to consume business opportunities presented to you.With this mindset you morph into an online business opportunity consumer, not an online home business operator.It leads to irrational decisions based on whims and driven by sales pitches creating an unhealthy level of anxiety that end up fragmenting your efforts, your time and your financial resources, damaging to your efforts at running a successful online business.These are the ultimate consequences of being an online business opportunity consumer rather than truly being an online business operator. And these consequences are what will eventually cause you to get exhausted and de-motivated only to end up putting your faith in another crazy idea with the same outcome over and over again.You cannot afford to have this mindset if you are going to run a successful online home-based business. So before you even contemplate running this kind of business online, get the correct mindset in place and the underlying resolve that comes from a deep understanding of the consequences of not doing so.Any other approach is just courting failure.
What Is the Best Home Based Business To Start in 2013?
The first thing to keep in mind is that the best home business to start is one based on the internet. It is no secret that more and more people are buying products and services online and, as the sales of online business transactions continues to increase, sales in the offline world continue to decrease.To begin an online business from home you do not need a lot of technical skills or a lot of money to get started out. There is no age barrier, or level of education required, it does not matter about your current internet practical experience or even that you do not have any products to sell.The best home based business simply starts with no stock. So, how can you have a business without any stock to sell? Basically, you sell products and services on behalf of other people and when you sell them the product owner pays you a commission. This home based business model is called online affiliate marketing.Unlike a traditional offline trading business, an online affiliate marketer does not have to buy the stock before he or she goes on to sell it. Firstly, you find products and services which are currently popular. This can either be physical products or digital products. Digital products are those which a buyer will download directly to their computer. This may be something like an education course.Once you have found a product, you promote it to a target audience who would be interested in it. When somebody buys it, you get paid a commission.For example, you can become an Amazon affiliate (which costs you nothing) and look for a product that interests you and that people are currently buying. Let’s say for example it is camping equipment. You insert an advertisement in an online camping magazine for the latest high-tech tent which you found on Amazon. When somebody clicks on your ad and buys the product, you will get paid a commission.This is why affiliate marketing is one of the best home based businesses to start. You do not have to worry about shipping the product, holding it in stock, sorting out any returns or any other customer queries.If you do not want to get involved with physical items and you prefer to have a home based business that sells digital products, you can find a huge selection at Clickbank. This is an online marketplace that deals in thousands of digital products for many different markets. Again, there is no cost to become a Clickbank member.Keep in mind that your home based business is a business and not a hobby. It will require work and some investment. Whilst the set up costs for the best home based business are a lot less than a traditional bricks and mortar business, it will need financial commitment for such items as a website, hosting, marketing, advertising, mentoring and education.An online home based business may not appeal to some individuals as they might believe that they do not have the technical skills required to get the best home based business possible. All of the reasons for not setting up a home based business on the internet can be readily overcome if you are prepared to learn and have the determination to build a sustainable and long term business.
A Small Business Advisor Makes Good Business Sense
Let’s face it. When you’re first starting up a business, you need help and advice. Even if you have an MBA from Harvard or are an experienced entrepreneur, you need someone to bounce ideas off of and check in with to make sure you’re on track for business success.Technically, there are only three times during the life of your business when you absolutely need a small business coach: when you’re first starting up, when you’re ready to grow and expand, and when you’re ready to move on.What do most people do? They hire one small business coach to help them start up. Then, they hire another specialty coach when they’re ready to expand and, finally, another business transition coach to help them close out their business.That’s three different coaches for three different stages. And, each time you hire a different business coach, you lose continuity. Is that really what you want?After all, your start-up coach has been with you from the very beginning, through thick and thin. She knows everything about you and your business. She’s walked with you through your fears, she’s pulled from you the heart of your business plan, and she knows what dreams you secretly hold for your business.Do you have any idea how valuable that kind of knowledge is?Well, let’s say you phase out your relationship with your start-up coach, and it takes you 40 hours to bring your next business coach up to speed. At approximately $200 per hour, that’s at least $8,000. And we haven’t even added a dollar amount for your valuable time spent “training” your new coach.At that price, wouldn’t it be more cost-effective to have one business coach who could start up your business, help it grow, and stay with it through its entire life cycle?Enter, the small business advisor.What to Look for in a Small Business AdvisorWhy do we treat hiring a business coach differently from hiring a financial advisor? You don’t hire three different financial advisors-one at the beginning of your investment years, one in the middle, and another when you retire-do you? No, you hire one financial advisor with the intent of maintaining a lifetime relationship with him, from beginning investments to retirement dividends.The same should be considered when hiring a business coach. Instead of thinking “business coach”, think “business advisor.” Instead of thinking “short-term coach”, think “long-term relationship” with a small business advisor who can be with you through the entire life of your business.Do you think that’s impossible? Think again!A small business advisor is the golden egg of small business know-how. She’s not only capable of helping you write your business plan, she can carefully analyze your business circumstances, assess the business market environment, and help you develop a long-term strategic plan that will take you from start-up to exit plan.Some small business coaches are actually small business advisors, whether or not the title “advisor” is on their business card. Don’t be afraid to ask questions to find out whether or not the coach you’re considering has the desire and the skills to work with your business from beginning to end.A skilled small-business advisor has the training and insight to:· Understand your goals, your dreams, and your reasons for starting up, growing, and transitioning your business.· Create a small business growth strategy that meets your short and long-term needs.· Understand the nature of business and offer wise counsel and continuous monitoring that will help ensure that your small business is positioned for success whether the market is booming or fraught with uncertainty.Best yet, she is someone you can trust who will be with you from start to finish.What You Can Expect from a Small Business AdvisorFirst and foremost: a comprehensive approach.The first thing she’ll do is sit down with you in order to obtain a thorough understanding of your current business situation and find out what you want to accomplish.Much like a financial advisor, your small business advisor will ask you questions about your current business, the future of your business, your growth timeline, the level of risk you’re comfortable with, and the return you expect to get when you sell your business.Periodically, your small-business advisor will meet with you to revisit your business strategy to make sure your business is on track. She’ll also work with you to make any necessary adjustments. That way, you can be sure to reach your business goals.Just as having a financial advisor manage your investment portfolio makes good financial sense, having a small business advisor who offers a comprehensive, long-term approach makes good business sense. A trusted small business advisor can add an enormous amount of value by guiding you through the many complicated business challenges you’ll face from start to finish.So, take advantage of all the expertise your small business advisor has to offer. Share your dreams and goals with her to build a valuable relationship that goes beyond traditional small business coaching to encompass the whole life of your business.
X-Ray Vision For Web Marketing
Seeing what others miss
How many small business owners really have an accurate description of their web market?
The reason this question comes up is because the vast majority of business web sites do not even speak to their market. In fact, the only people the web site speaks to are company people such as owners and managers.
We can all see the company clearly in any business design, but our market is not interested in our company. They have their problems and they have no need, right now, to know what wonderful people make up this business web site.
If our market cannot see how the web site is trying to help them then help is not there. If our intention is to build a relationship with our market then the help we offer needs to be the first thing our market sees. They love this and they want this and it is the best part of our marketing.
How do small business designs block their own market?
A good analogy is found when we meet someone that only talks about themselves. We get bored instantly when we realize they have nothing of interest to offer us.
I remember growing up as a young kid and with friends we would sometimes run into this older character that bragged about his rich uncle that had a Cadillac a block long and he had to take it to the airport to turn it around.
We weren’t fooled but we got a good laugh. At least he was entertaining even if he wasn’t helpful. And after the second time there was nothing new and we got bored by his bragging because this guy didn’t care who he talked to as he just kept telling the same stories.
Isn’t this just like a typical small business web site?
Not once on the page is there any recognition of who the web market is. Not once does the web site mention a problem their market experiences and the causes for the problem. Not once is there a sense that the web site cares about the market and wants to serve that market.
No, all that the web site shows is that the only interest is in selling us something whether we need it or not. That’s their story being told over and over.
The bottom line about customer relations
As small business owners we get in our own way and totally block any communication with our own market when we focus on our product or service. Nobody is interested in us talking about ourselves and what we have to sell.
Read any business home page and it tells you about the company and why you should be impressed with the company, but you cannot find a clue as to the market. Not even with X-ray vision can you find who the market is.
Our market wants to know how we can solve their problems and we totally ignore the issue while we talk about product features and benefits. We actually think that a product description is real content – but no one cares about our product description, in fact, no one even cares about our product until they know it really has a solution to their biggest problem.
How does it feel?
How does it feel when someone ignores you?
How does it feel when someone asks you to buy?
How does it feel when someone asks us how they can help?
The last of those 3 questions is what attracts us the most. It captures our interest and our curiosity. It is just like getting a free gift because that is what it is, and we are going to benefit by learning something we never knew before.
How did we get here in the first place?
How did we come to build such poor marketing web sites? We got here by listening to web designers instead of thinking with a business mind. Web designers paid a lot of attention to us and our business and it all felt good and so we thought we were on the right track. The end result is that our web site pays a lot of attention to our business and zero to our web market.
Lesson learned
We cannot let our web designer be the one to design our web site. All we want our designer for is to do the technical aspects of building a web site. It is our job as small business owners to figure out what our web market wants and how to serve them best.
Okay, so you want ideas on how to display your helpful information and a web designer could help if they forgot all about their trendy design packages. It is going to take something different in web design to put your helpful information first, but in bite size chunks.
Navigation for information is going to take some thinking. Hypertext lists may work. Paragraph intro with hide and click drop down information may work. Hover text with slide in info may work. The real job of a web designer is to help you find and use the best means of providing information to your market.
Seeing your market
I challenge you to go look at your home page, or any other business, and see if you can figure out who the market is. Almost all small business web sites fail to identify their market and you can’t build a relationship by saying, “Hey you, look at what we have!” But you might sell if your web site said, “Hey farmer Jones, would you like a fence post that lasts 100 years?”
How do you get X-Ray eyes?
To acquire x-ray eyes you just need to look inward, that’s where you find all your insight. It’s not difficult at all and if you’ve ever been caught daydreaming then you are using insight.
We need to pretend that we are the market. We are the homeowner with a leaky pipe, or the guy with a hole in his shoe. Whatever we sell we need to be that market and wrap ourselves up in the problem that this market has. If we don’t feel the pain then we can’t talk about it, and we want to talk about that pain and how we are going to solve the problem that creates the pain.
When we then put our eyes back on our own web site we can see through the filler we thought was real web content. We can see as our market sees and we will find lots of things in need of change.
Using logic and foresight
Analysis and logic can confirm, or it can contradict the feelings and insight you have about your market. I recommend using insight and if logic doesn’t back it up then toss out the logic.
Why toss out the logic?
The web does not work with factual data like demographics. Instead, web marketing works best with psycho-graphics where beliefs, habits, Likes & dislikes, and shared values play a big role in defining a market. These are intangible and emotional values that are difficult to back up with logic.
We need to go with our emotions and intuition because they are the same tools we use when developing social skills, and our web site is sorely lacking in social skills.
Before we even think about connecting with social networks we need our web site to express its own social attitudes.
How to Promote Your Online Business Using Banner Advertising
If you are looking for different ways to promote your online business and attract more customers to your web site, banner advertising may be an option worth considering. Search engine advertising, or “pay per click advertising” as it is called, still remains the most popular website advertising solution. However, an alternative option to consider is to promote your website by utilising internet banner advertising. It is easier, cost effective and much cheaper than you think.
This type of advertising has the capability to provide more than just basic text based advertisements. With internet banner advertising you can have your logo displayed along with animation or even eye catching video. A well designed web banner advertising campaign will attract more attention and draw more customers to your website. When you choose this style of advertising, you are able to produce a media rich display that is more pleasing to the eye.
Banner advertising can be cheaper than pay per click advertising
Advertisers using the search engine advertising (pay per click) method, will only incur a cost when the potential customer clicks onto their advertisement and goes into their actual website. With internet banner advertising it works in exactly the same way. Depending on your industry and the products or services you wish to promote, it may actually be cheaper for you to choose this type of campaign over the more traditional search engine advertising option. Of course, you will have to consider the banner design cost for your web banner, but the benefits of improved brand awareness tend to outweigh the cost.
Use a mix of different size banners for your advertising campaign.
With this style of advertising campaign there are many banner sizes to choose from. These range from leader boards to sky scraper sizes. Another great feature is that there is no limit to the amount of text that you can use within your banner display. Unlike pay per click advertising, where your words and characters are limited to a certain number. This in turn only allows you to promote a reduced number of products or services and limits your advertising capabilities.
With banner advertising, your website will come alive with vibrant colors and exciting advertisements. Attracting new customers and building a solid database of existing customers is very important.
By using this form of advertising, you can successfully reach your advertising potential by drawing in thousands of customers to your website. It can really be worth your time and effort to consider this type of internet advertising for your business. Developing your online business using web banner advertising is a smart choice for any website owner to make.
Robert Smith has over 5 years experience in search engine optimisation and internet banner advertising. He is the owner of Get On Fast, a specialist internet marketing agency, based in Cambridgeshire, United Kingdom.
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.
Five Tips for Selling at Live Auctions
Ah, the old-fashioned country auction! The idea of a country auction conjures up certain images for people. The image of a fast-talking auctioneer offering up an antique table or chair is a popular example.
People who are buying household goods or collectibles are looking to get their items at the lowest price possible. However, the people who are selling their items at auction are hoping for the highest price!
Unless a person is in the business of buying and selling antiques or other items, not a lot of thought goes into how goods are prepared for sale via the auction process. However, if you are one of the growing number of people using auction venues to sell your collectibles or other inventory, there are a few things to learn first about how to sell at auction before you bring a truckload of stuff over to the next event.
Tip 1: Make sure the things you want to sell are a good “fit” for the auction house you’ll be using.
Never bring a load to an auction house without actually having been to one of the previous auctions. It’s important to get a feel for the type of goods that the house sells. For example, at one very rural country auction it was common for the owners to sell live chickens, pots and pans, car parts, and farm equipment.
After close investigation, this would not be the right venue for selling your daughter’s “Hello Kitty” collection. On the other hand, the spare John Deere parts that you bought at last week’s yard sale might be just the right thing for the buying crowd at this auction.
Tip 2: Be sure you clearly understand the terms and policies of the auction house.
Visit with the auctioneer ahead of time. Call to find out what the best days and times are to visit. One of the worst possible times to drop in for an informational visit with an auctioneer is the day of the auction. Call ahead and ask. While you’re at it, find out what are the best days and times to drop your stuff off.
Once you have a little time with the auctioneer, you’ll be able to find out what type of commission he or she takes from consigners (which is you), and what type of paperwork might be needed. Some auction houses send out Form 1099 tax forms at the end of the year. An auctioneer may need to see your identification and have you fill out a W-9. Be prepared.
Find out what happens to your items if they don’t sell. For example, some auctioneers may have a minimum starting bid. If, for some reason, one of your items does not sell, it may be grouped with another one of your pieces. Know the auctioneer’s strategy beforehand so that you aren’t surprised on pay day.
Tip 3: Make sure the auctioneer knows what you’re selling.
It might be perfectly obvious to you that the signed print you are consigning is a rare and valuable piece of art. However, the auctioneer may not know this particular artist. Make a note of anything particularly special about your items, and leave the note with the piece. Be sure to tell the auctioneer about it as well. He or she might determine that this is something to highlight on the company website or in the newspaper listing.
Tip 4: Present your items neatly.
No one likes to have to dig through a box full of grimy and greasy car parts to see what treasures might be in there. Separate the parts and lay them out on a flat, or use more than one box to de-clutter the lot.
There is no need to buy fancy display boxes. It’s easy enough to go to the local convenience store or supermarket and ask if you can have the emptied boxes or flats that they are discarding.
While it’s good to present clean items, take care not to ruin the value of anything by over cleaning. For example, if you find some old cast iron cookware, clean the obvious dirt and grime, but don’t scrub it to its original finish. For many people, this ruins the value of the item. So, clean and tidy and organized is the key here.
Tip 5: Don’t complain to the auctioneer if your stuff doesn’t sell for as much as you’d like.
The phrase to remember here is, “You win some; you lose some.” That’s just the way it is. There are some days where an auction house is loaded with people who all seem to want what you’re selling. There will be other days where the crowd is sparse, and the bidding is simply not competitive.
Remember that it’s in the auctioneer’s best interest to sell your things for the highest possible hammer price. But sometimes, it’s just not going to be a stellar sale. The auctioneer is only human, and is also disappointed if a sale doesn’t go as well as planned.
If you notice that every time you bring a bunch of goods to sell that you’re not realizing as much as you think you honestly should, try another auction venue and compare apples to apples. That is, bring the same types of items to the new auctioneer and compare the results.
Unless the auctioneer is particularly disagreeable or inconsiderate to you or buyers, there is no reason to confront him or her about a sale. If you find you just don’t care for an auctioneer’s style or methods, find another one. Believe me, there are plenty of them out there!
The primary thing to remember as you learn how to sell at auction is that the business is unpredictable at best. You will have good days, some not-so-good days, some great days. The more you sell, the more experience you will gain, and the more enjoyable the business will be.
Real Estate Auctions – The New Land Rush
On a sunny afternoon in Florida, an energetic crowd gathers on the lawn of a high end luxury estate. A loud and eager banter between an auctioneer, a group of bidders and bidder assistants fills the air. For several minutes the auctioneer asks for the next highest bid and the bidders respond. Suddenly the bidders grow silent. The high bidder holds his breath in anticipation of winning the auction. The auctioneer calls for one more bid. In a loud clear voice which rolls over the audience he says, “Fair warning, last chance” the auctioneer pauses, “SOLD!” And in less than 10 minutes another multimillion dollar estate has changed owners.
Successful real estate auctions like the one above are happening all over North America and the Caribbean. Recently real estate auctions have been on the rise, the increase in popularity is partly driven by growing inventories and fading buyer confidence. Properties that were selling in weeks using traditional methods are now languishing on the market unable to attract buyers even as seller’s lower prices. Many say the real estate boom is over but savvy buyers and sellers are profiting from real estate auctions.
Real Estate Auctions Work in Up or Down Markets.
Regardless of trends or market cycles, real estate auctions provide an open and transparent process for buyers and sellers. Properly conducted real estate auctions attract ready and willing buyers and motivate them to act now.
The auction method removes the “wait and see” attitude which serves to further depress real estate values. Buyers are always concerned about overpaying. Buyers gain confidence with their purchases at real estate auctions because they can see what others are willing to pay.
When market demand is high and inventories low, real estate auctions can deliver selling prices well above what a willing seller would have accepted in a negotiated private treaty sale. In good selling climates many property owners using traditional real estate methods; negotiating with one buyer at a time, leave thousands of dollars of equity on the table. During up markets real estate auctions are the best way to establish top market price.
Evaluating Your Real Estate for Auction
Not every property or seller for that matter makes a good candidate for auction. First of all sellers must be ready to sell now and for the current market value. Also a real estate auction will not fix problems caused by a downturn in market value of your property, if you owe more than a willing buyer will pay, be prepared to come to closing with your check book.
Properties that do well in real estate auctions have a high uniqueness factor. Ask your self, “What makes my property different from most others?” Maybe you own a resort property or high end luxury home, commercial properties and land do very well at auction. Real estate auctions thrive on uniqueness. If your property is like everyone else’s, the best thing you can do is offer the most competitive price.
Most importantly sellers must be reasonable about setting a minimum bid. A seller must look at the lowest, most current comps and price below that to generate the interest and urgency necessary for a successful real estate auction. Once the auction begins and qualified bidders start competing against one another you can watch the selling price increase.
Locate a Qualified Real Estate Auctioneer
Start by checking with the National Auctioneers Association, the best real estate auctioneers belong to this organization. These real estate auctioneers are well trained and adhere to a standard of practice and a code of ethics. Many attend the annual International Auctioneers Conference where the latest techniques and innovations in the real estate auction industry are presented.
Find out if the company you are interviewing is a full time real estate auction firm. Many real estate agents are getting auction licenses yet have no experience with the auction method of marketing. Conducting a successful real estate auction is nothing like (private treaty) traditional real estate sales. Go with a real estate auction pro.
You’re probably better of with an auction house that specializes in real estate auctions. There are many qualified auctioneers who have generations of experience selling personal property; furniture, dishes, lawn equipment and the occasional rare painting. Selling real estate at auction is a complex matter that should only be attempted by full time experienced real estate auction professionals.
Commissions and fees may vary, sellers must pay all marketing expenses up front and buyers typically pay 10% of the sales price to the auctioneer of which a share goes to participating real estate agents.
Types of Real Estate Auctions
Auctions are effective because they create a seller’s market. Professionally conducted real estate auctions create urgency, a reason to buy today and competition for the property. Terms and conditions of sale are established ahead of the auction. Real estate auctions will follow one of these three approaches:
Absolute Auction
The property is sold to the highest bidder regardless of price- using this process often returns the highest sale price.
Minimum Bid Auction
Seller agrees to sell at or above a published minimum bid price – this method is useful for internet auctions.
Seller Confirmation or Reserve Auction
With a reserve auction, the seller “reserves” the right to accept or decline any bids usually within 48 hours of the auction. Reserve auctions are used when there is a lien on the property from a lender or a court ordered sale with a minimum selling price.