Auctions have been around for generations and are proven to be one of the most effective and exciting ways to find true asset value.
Over the years, auction strategies and methods have evolved with the rapid changes in technology (live bid calling, simulcast, online-only bidding), but regardless of which auction method is used, three things will always remain true: there is a seller, a buyer and (hopefully) a professional to manage the entire process. This article is going to discuss the sometimes-frightening prospect of being an auction seller and give you some tips when working with an auction professional.
At K-BID.com, we’ve been fortunate to be a part of thousands of online auctions and work with some amazing clients. Our experience has allowed us to gather some simple tips to help you get premium results if you need an auction.
Choose the right auction company.
First and foremost, hiring a qualified company is the most important decision you will make in this process. Many of us have heard this familiar saying:
"If you think it's expensive to hire a professional, wait until you hire an amateur."
This is applicable for any service, auctions included. You deserve professional and qualified representation when it comes to the sale of your assets. Do yourself a favor and make your decision on more factors than price alone. You wouldn’t hire a bargain lawyer or CPA based solely on cost, would you? An inexperienced auction company could result in an underperforming auction and less money in your pocket at the end of the day.
We recommend that you research the available options thoroughly, ask to see previous auction results. You should feel comfortable with your decision and not be afraid to ask questions or take the time you need. There are thousands of well-qualified and professional auction companies in the United States, you deserve one that can help you get the best results.
Clean up and get organized.
It’s no surprise that clean and organized items will typically sell for a higher price. Clean items give buyers confidence and allow them to gauge value by comparing to like-items available in the marketplace. Many auction companies will perform this service for you, but be aware that this time-consuming process could come at a cost. Like any other business, auction companies must cover their expenses by increasing the price of their services – which means that you may be charged more if you want your items to be nice and shiny. For some without the time or manpower, incurring this extra cost makes sense; others are more willing to put in the extra work to save a few bucks.
Provide complete information.
Auction companies get the opportunity to sell all types of items – but that does not mean they’re an expert in every field or have detailed knowledge on every item you own. It can be extremely helpful when a seller provides information to help describe items that they may not be familiar with. Complete descriptions help educate buyers and can make a huge difference in bid prices. At K-BID.com, we want buyers to bid with confidence, which is why we emphasize full disclosure with members of our affiliate network. If you know the mower is broken or the transmission is blown, let the auction company know – the buyers, and bid prices will reward you for it.
A reserve is a form of price protection that will prevent an item from selling unless it meets a certain price. The prospect of letting the open market decide what your items are worth can be terrifying, we frequently get asked: “What if my item sells for pennies on the dollar?!” We get it, we really do.
Our job is to prevent this by marketing the auction and assets effectively. The unfortunate truth is that buyers do not come to auctions to bid against reserves or what the seller thinks an item is worth. In fact, the opposite effect can happen where bidders refuse to participate at all. We've found that nearly half of our buyers polled will not participate in auctions with a reserve.
50% of buyers polled stated they do not participate in auctions with reserves.
There is a time an place for reserves prices in auctions, however, we highly recommend our clients avoid reserves as much as possible due to the years of data that show the negative repercussions.
Use your network.
Auction success is all about numbers: the number of buyers, number of bids and ultimately the final bid price. Auction companies work hard to advertise your auction effectively to maximize the number of qualified buyers participating - but it shouldn’t stop there. As a seller, you can take advantage of your network and social media accounts to share notices about the auction (or a link if it’s an online auction). If you’re a business, share the auction with contacts or customers through email notices. We have seen numerous auctions receive hundreds of new bidders and thousands of dollars in extra bids due to the efforts of the seller.
Understand the auction process.
In some online auctions, 75% or more of bids placed can happen in the last day, hour or minute of the auction. A typical auction on K-BID.com will be live and receive bids for 7-12 days. This timeframe gives current bidders the opportunity to find newly listed auctions and allows us to execute our marketing efforts and bring in new targeted buyers. It’s important for sellers to understand that just because prices will remain low until the last few days – it will not stay that way! Most bidders like to wait until the last minute as to not tip their hand.
In some online auctions, 75% or more of bids placed can happen in the last day, hour or minute of the auction.
Try not to watch too closely or you could drive yourself crazy. The bidding will pick up towards the end of the auction and some items will sell for far more than you expected while others might go for a little less. Successfully executed auctions will have the right buyers ready and waiting at the end of the auction to start battling over who gets to take home your prized possession.
Trust the expert.
You should never be left in the dark and should have clear expectations on the auction process. It’s natural to have questions and wonder why things are done a certain way, and an experienced auctioneer will be glad to explain their process and be open to input. That said, be careful not to discount the knowledge and experience of the auction company you are working with. They have seen the good, bad and ugly when it comes to running auctions and are trying to make this process as seamless as possible. Don’t forget that most auction companies are paid on a commission basis, meaning they have the same goal as you: to get the highest return possible for the sale of your assets.