When many think about home based business, primarily over the Internet, they tend to think of get rich quick schemes. This is probably due to the overwhelming number of infomercials that are found on television late at night. When I mention to my friends and family about my home based business, that’s what they always think of.The truth is that, although there are many gurus and false programs out there, which claim that following there method would make you rich in a matter of days, this is no where close to reality.There are several kinds of home based businesses out there. Take day care as an example. That’s can be home-based, right? Although this is true, those kinds of businesses are not what most people are looking for when they are trying to achieve financial freedom.Running a business from home is one thing, but running one over the Internet is another. Over the Internet is where you’ll run into the gurus and false programs who sell you products that simply don’t deliver. Like I said before, they promise an a easy method that will earn you an unbelievable amount of money in a short time frame.What you need to do is forget everything you think about making thousands of dollars in a short time over the Internet. The truth is that it’s not that simple. There is no magic. If you want to get rich quick, purchase lottery tickets and hope for the best.Starting a Home based business, one that is over the Internet, takes time for it to grow. It also that a lot of work. This is not a business you can just through something up on the Internet and the money will just be pouring in. It takes time to do this work.Is it hard to do? To make this answer as short as possible. No, it’s really not a hard thing to do, however it does require proper education on the business. Internet Marketing is not something everyone knows all ready. There are plenty of resources on the Internet that will guide you to building your successful online business.How hard is the work involved in working from home?The work is not so much “hard” to do, but time consuming. There are methods to speeding up the process, however those do take some investment on your part. Whereas, if you wanted to build a business without spending any money at first, it takes more time because you have to do the work yourself.
The Top 7 Techniques That Lead To Catastrophic Failure When Marketing Your MLM Home Based Business
So before we get started, do you know what the leading top 7 techniques being taught are? The most common of them all is to build a list of family and friends. Then pass out business cards, brochures, audio’s and DVD’s. Once you have established a few new associates you’re invited to 3-way calls, hotel meetings, product promotions, and launch your own MLM affiliate website to share with potential prospects. Last is inviting people to your home party.Now I am not saying you will can all these techniques when given perspective, it’s just over the course of experience most MLM home based business owners find these strategies out dated, costly, with a minimal return, why? These techniques are primarily benefiting the company and secondary the builder.Let’s start with building a list of family and friends. On a whole you start with a list of about 50 to 100 potential buyers, that you are trying to sell. They are not truly looking, yet some will get excited about the product, service, or the opportunity. For every 10 that register, 2 will want to build their own MLM business. Reality is the average consumer will only buy products for about 3 to 6 months and new associates need to profit within the first 1 to 3 months before throwing in the towel. As for your MLM company if they have over 100,000 associates and everyone builds a list, the company is growing.Next, passing out business cards, brochures, DVD’s, etc. Let’s be honest the average American watches DVD’s for pleasure, brochures for the pictures, and business cards land in the trash. Yet your MLM companies still promote these techniques due to high volume return. We buy their promotional products and even at a 1% conversion rate they’re still making money.The 3-way call is one of the most counter active methods to grow a business existing. Simply said, you are telling your audience that you are not an expert, but your leader is. Who would you prefer to do business with?Who does not like the concept of “home based business”? Yet, where does hotel meetings, driving all over town, and picking up meal tabs fit into this picture?This defies the reason for starting a home based business? Your goal was to earn money while working in your PJ’s and not leave home.The myth behind the product. If the product sold itself your MLM companies would not even think twice about advertising expenditures. The truth remains it is not cost worthy and that is where you and I come in, word of mouth.Websites are necessary in today’s business building arena, yet most MLM websites base the construction for the masses, they sell. They are not designed to target your leading audience through proven marketing techniques. Yet MLM companies offer this promotional product knowing you will pay the monthly fee to have a fabricated website with the ability to attach that site information to your business card.Last, but not least is the traditional home parties. These has given MLM home based businesses a bad taste for many audiences. Your friends and family are expecting to have a nice social hour accompanied with some food, idle chit chat, not a sales pitch. It’s pretty black and white.I hope these 7 “Do Not” business building techniques leave you dismayed or nor discouraged. Each MLM home based business builder must find the coordinating techniques that work for their perspective market.
Reality Vs Myths – SBA Changes Small Business Reporting Standards
The SBA recently made some changes to how small businesses can compete in the federal marketplace, leading to some false beliefs. An examination which clears up some of the false beliefs about the change in Small Business Association guidelines and how it affects businesses trying to do work with the government.Myth: Small Businesses can’t compete in the federal marketplace because large companies are getting contracts specifically written for smaller businesses.Reality: Though it is true this has happened in the past, large businesses taking contracts set aside for smaller businesses is not a real factor anymore in the federal contracting arena. A minuscule percentage of contracts get awarded to companies whose size is later challenged – the companies are almost universally on the edge of what is defined as a ‘small business’ rather than the large multi-national corporations. The Small Business Administration (SBA) has adopted regulations which keep such contracts from being considered as small business contracts, helping to make the available figures and statistics more accurately reflect reality.Myth: Large and multinational corporations are listed in the GSA’s database with small business contracts because they were awarded them.Reality: There are two explanations for this. The first is that size status is determined at the time a contract is awarded, and is retained for the duration of the contract. In recent times, agencies have increasingly been awarding long-term contracts which can extend for as much as twenty years. During that period it is quite possible that these businesses become larger and no longer fit the small business size standard for their commodities. Small businesses are becoming large businesses during the period of their contracts, making size reporting difficult to implement effectively. Secondly, many large companies have a strategy of purchasing small businesses with long-term contracts, meaning that a contract awarded to a small business may then become owned as a subsidiary of a large business. Until recently, agencies were allowed to count those contracts toward their small business goals despite this fact.Myth: Nothing has been done to stop such misrepresentation of small business awards, and the SBA has not made it more difficult for larger businesses to attain long-term small business contracts and misrepresent themselves.Reality: Many steps have been taken to resolve this issue. The SBA implemented a ruling in June that requires companies, large or small, to recertify their size status at the end of the initial contract term (generally five years) and again at every exercising of a contract term extension option, usually between one and five years. Additionally, whenever a small business is bought out by or merges with another business (of any size), it must recertify its size status for all of its contracts, regardless of where they are in the term. Thus, from now on all contracts will be reported as held by large companies if the business holding them has grown past small business size standards or has been acquired by a large company. The SBA has also taken other steps, including increasing its staff working on finding small business contracting opportunities, requiring federal agencies to review any issues or discrepancies with their reported contracting statistics, and starting a “Small Business Procurement Scorecard,” which will monitor and score agencies on their performance on a variety of small business goals.Myth: This five year recertification allows agencies to report the tens of billions of dollars set aside for small businesses for large businesses until 2012.Reality: The new SBA policy explicitly prohibits this. It forbids small businesses that merge or are acquired by large businesses from claiming small size status for all future work, even on existing contracts. This means that as soon as a business is no longer legally considered ‘small,’ all of the dollars used must be reported according to the appropriate size standard. It also limits the time that a small business that expands beyond small standards can report as small to no more than five years – and most to within one year. All of the new SBA policies apply to all existing and future contracts of any term length, so that whenever any event that triggers a recertification need occurs – merger, acquisition, end of a contract term, or exercise of a contract option – the business must recertify itself to whatever size standard is appropriate at that time.Myth: Small business can be forced to compete alongside large businesses because of the new recertification policies.Reality: A contract that is set aside for small businesses MUST be given to a business that is certifiable as small at the time of bid submission. These new policies actually protect small business owners from having to compete with larger businesses, because there is now no way for them to acquire small businesses in order to certify small business status.Myth: There is no enforcement and there are no penalties, fines, or consequences for large businesses that get small business contracts.Reality: If the SBA determines that a businesses has misrepresented itself about the size standard, they have the right to disqualify a bid and deny the contract. If a business is found to have intentionally misrepresented itself regarding size status in order to get a contract, under Section 16(d) of the Small Business Act the owners are subject to fines and imprisonment. Companies that lost out on the bid may challenge the size of the winning companies and also file civil suits under the False Claims Act. Additionally, there is proposed legislation that would delay awarding of any contracts that have size standards attached over a certain dollar amount until the size status of the winning bidder is determined and verified by the SBA.Myth: The SBA will not release information on small businesses awarded government contracts.Reality: Information and data relating to federal contract awards is readily available to the public through the Federal Procurement Data System – Next Generation. Any person – small business owner or otherwise – may request information or reports through the database operator, the General Services Administration (GSA), if they have difficult finding data or navigating the site.Myth: The recertification procedures will change the size standards for small businesses and how they are classified as ‘small,’ much like the 2004 proposal.Reality: This is simply not the case. Small businesses are still determined to be so by the same regulations. The rules regarding size standards have not changed and are still determined by industry – some are based around maximum number of employees, some are on revenues in recent years, and some are a combination of the two. The 2004 proposal, which did not go into effect, was a broad restructuring agenda that would have made all size standards determined by the number of employees.Myth: More than a dozen federal investigations in the last six years have reported finding that billions of dollars were diverted from small businesses to Fortune 1000 companies and their subsidiaries across the country.Reality: There reports almost universally raised issues regarding the accurate reporting of contract dollars that were originally awarded to small businesses – just the sort of thing the new rules were put into place to prevent. This meant that small businesses were the original winners of the contracts, but then were bought up by larger companies. Although there are a very few occasions where large businesses won federal contracts that had been set aside for small businesses, generally this was because of a misunderstanding or of a small business not realizing it had grown beyond the size standard. None of the studies suggested that large, multinational corporations competed against small businesses for contracts. The dollars went to the larger companies because the business that originally won the contract was small. The new rules and guidelines that have been put into effect as of June 30, 2007 should prevent any further such problems of misreporting.
3 Ways Edgar Allan Poe Can Supercharge Your Marketing
Marketing is the lifeline of your business and you need a dynamic marketing program for your business to grow. As a business advisor, the constant complaint I get from clients is that they just can’t afford the marketing they need.
To help your marketing be more effective and get a higher return on investment, I’d like you to remember Edgar Allan Poe with my little parody of The Raven:
“Once upon a midnight dreary, while I pondered weak and weary,
Over so many ways to help my business grow.
Marketing ideas I was creating, but my budget’s so berating,
Media exposures are begetting expenses as my constant foe.
Finding ways to spread my story with finances low
Big ideas, so little money, then I discovered POE.”
Edgar Allan Poe is one of my favorite authors, but POE is also an acronym for the 3 categories of media marketing. Though a common practice in large enterprises, POE is often overlooked by smaller businesses. The term media marketing is most often thought of in the context of mass media but, in reality, media marketing is simply communicating your story, whether to a mass market or to one individual. Recognizing and understanding the many forms of media and utilizing each category of POE will increase the overall effectiveness of your marketing.
• Paid media marketing. OK, this one is obvious; it’s when you pay third party marketing companies to get your message out through media such as print, TV, radio, and online advertising. No other type of media can guarantee the immediacy and scale of paid media. Paid media is usually what we think of as mass media marketing but it also includes trade shows, sponsorships, organization memberships, and sales expenses. The pros of paid marketing is that you have control of the content and the target audience. You can start and stop it when you wish. The cons are the high expenses and the fact that advertising is not as effective as it was once was. You are paying for everything, and smaller companies with tight budgets find it difficult to get effective results for the costs incurred.
• Owned media marketing is when you leverage a channel you create and control. From a digital standpoint, this is your company website, email announcements or newsletters, LinkedIn, blog, twitter, YouTube channel, and your Facebook page. Each allows you to project your brand and personality as you chose and when you chose.
Don’t overlook the importance of emails. Though thought of as “old tech” by many, a surprising new survey by the global management consulting firm McKinsey & Company states that email is nearly 40 times more of an effective way to acquire customers than all that tweeting and posting and “liking” you’re doing on social media Facebook and Twitter combined.
But owned media marketing is not just in the digital world, it can also be your hard assets such as your bricks and mortar facility, your delivery trucks as well as your employees’ uniforms, as each of these helps create an image and brand that promotes your business. A simple example of owned media is my local tree service company who has their phone number in 3 foot numbers on the sides of their large trucks. Their trucks are now mobile billboards that can be seen from 100 feet away. They enjoyed more than a 100% increase in calls after they did this.
• Earned media marketing has been around forever. It’s an old PR term that essentially means getting your brand message noticed for free rather than having to pay for it through advertising. Public relations (PR) and word-of-mouth are examples of earned media marketing. With Earned, the press and the public share your content, speak about your brand via social media or word-of-mouth, and otherwise discuss your brand. In other words, the mentions are “earned,” meaning they are voluntarily given by others, such as testimonials.
There’s an old adage in marketing: “When we say something about ourselves, people tend to disbelieve it but when others say something about us, people tend to believe it.” Positive earned media is a result of brand behavior. Many consumers don’t trust advertising, but they do trust peer recommendations. This is why earned media is so important to your success. One positive testimonial can have more value than an expensive advertisement.
When you have done something so well or interesting that people want to use their own media to tell others about it, you’re earning media. More importantly, earning media is about engaging with consumers on their terms and gaining trust based on genuine understanding of what interests them. Building relationships through strong networking is also earned marketing. Build your networks by joining groups, attend events, do public speaking, write articles or an eBook, and meet people one-on-one.
Here’s an example of how one small business combines paid, owned and earned marketing to expand their exposure using POE: The small family-owned business where I take my cars for service does a great job of combining all three areas of POE. They spend money on a professional direct mail piece that goes out regularly to area homes and businesses (paid). They have a user-friendly website where you can set an appointment and get tips on caring for your car (owned) and they send regular emails with service tips and specials (owned). They have an attractive clean facility with a family-friendly waiting area (owned).
Great customer service is one of the best forms of owned/earned marketing, and they do a terrific job of following up every service job with a personal phone call and a thank you letter (owned). This sets them apart and gains them valuable testimonials (earned), some of which are posted on their website (owned).
No marketing is free. Remember there’s a cost to each category of marketing – time, money or both. Many small business owners underestimate the cost of their precious time invested in the marketing they do in-house. Owned and earned marketing takes effort and creativity to develop and leverage at any scale but it’s worth it. If you want your content to spread through social media and for social discussions to spring up around your products or services, you have to put effort into developing your social media channels. You must build your social media profiles, engage with customers and create interesting content. You must also do it consistently, week in and week out. Paying attention to your Twitter account once every 5 months will not accomplish much.
Everything you do is marketing. Regardless of the size of your business or budget, the strength of POE comes from the constant realization and reminder that nearly everything you do in your business creates a form of media marketing that falls into one or combined categories of POE. From an expensive TV ad to how you answer your phone, you are creating your brand that will affect the growth and success of your business.
What Do Customers Say About Aerial Advertising?
The aerial advertising companies think that airplane messages are incredibly worthwhile. Advertisers might be enchanted with the novelty of having their ad flown over a busy beach or festival.
But what do consumers think? It would seem a waste for advertisers to spend a good deal of money on advertising that won’t be worthwhile, that consumers won’t respond to, that won’t bring customers and money to the door.
Advertisers will be happy to know, then, that consumers think highly of aerial advertising. They enjoy watching the banner ads, and they remember the ads long after they are gone.
In 2004, a Miami Beach survey of 2,194 beachgoers backed this up. After seeing airplane messages in the sky, they were asked some questions about the advertising. The results were interesting and useful to potential aerial advertisers.
Other forms of advertising might be remembered for a short period of time, especially if the message is unique, but most consumers don’t recall the information for very long.
So what’s enlightening is that in the survey of beachgoers a stunning majority of people not only remembered the banner ads they saw, they remembered them for a long period of time.
Beachgoers were asked if they remembered the banner that passed over in the past 30 minutes. The response? 88% of them had. It’s hard to imagine another advertising medium that could boast of 88% of the people remembering it 30 minutes later.
In fact, most people pay little attention to advertising, unless the message is unique or the way of communicating the message is unique (as in a duck, cavemen, or something similar). But sometimes how you present that message is what’s unique (as in aerial advertising) and that’s what people pay attention to. Once you have that attention, you can get your message across in a clearer way than you might think.
The advantage of airplane advertising is that it is unique. It’s not like all the advertising that we see on any given day – billboards, radio ads, and newspaper and television ads. When that plane flies over, towing a banner and a message, we all look up. We pay attention. We remember.
And this statistic bears that out – 79% of the people questioned remembered what was being advertised on the airplane banner. This is 30 minutes after the banner passed over. This backs up what aerial advertising companies already know – airplane messages work. The medium is unique enough that people notice it and they remember it. An advertiser can ask for little more than that.
Finally, the best news for advertisers – 67% of those beachgoers surveyed said they remembered at least half of the message of the airplane advertising. When people remember the message, they remember the advertiser. They seek out the product or service being advertised.
The bottom line is, consumers respond to aerial advertising. They enjoy looking at it, they pay careful attention to it and (best of all) they remember it. Whether alone or combined with other forms of advertising, an advertiser’s dollar goes far when used for plane advertising.
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.