Many people give varied reasons for starting a home based business.o They want to get rid of their bossy superiors
o They are just sick and tired of being told what to do all the time
o They are fed-up of commuting to the workplace in midst of crazy traffic
o They are looking for freedom to implement their innovative ideas which have been suppressed for a long time
o They are tired of other people taking credit for their hard work
o They want to be close to their families
o They want to be their own boss
o They want to have flexible working hours
o They want to create wealth which is not possible with their existing jobs
o They want to create opportunities for others and give back to societyIf you are thinking of starting a home business, you will surely have a reason for that.Let me ask you another question.What would your response be to a very lucrative proposal where you are offered a huge amount of money to fight a heavyweight boxer for one single round?The conditions are:1. You need to remain on your feet during the whole duration of the round
2. You will not be allowed to leave the fight halfwayHow long, do you think, will you be able to fight?When the going gets tough:The point that I am trying to make is that people are very enthusiastic while starting a home business, but they crash out of the competition almost as quickly as they started.Most people tend to give up and become so disheartened that they become incapable of mustering courage to try again.The need of the hour should be not to accept the defeat and to fight it out, tooth and nail.If you remain unrelenting and resolute, the victory will be yours ultimately.Appropriate preparation and backup:If you launch your home venture with proper preparation and backing, there is no reason why you cannot sustain it for a long time. You can take assistance from the experts and professionals to guide you in the initial stages.What happens if you fail in the first attempt?Most people close their business because they fail in their first attempt with some task. What they do not realize is that one cannot attain instant success in any business venture. It is going to be a long drawn out battle.Those who stay on and fight it out, emerge victorious. The rest leave battered and disheartened.It is wise to draw inspiration from those who have attained success after a hard struggle. Your association with like-minded business people will teach you the way they attained success with their business.Find yourself a legitimate business:Your first and foremost task should be to select a legitimate business opportunity.After doing that, you need to conduct extensive research and understand whether or not you will be able to implement your business ideas. Steer clear of those companies that promise to make you a millionaire overnight.You need to remember that there are plenty of fly-by-night operators on the Internet. It is in your best interests to avoid their traps. Starting a home based business requires true grit, but if you are prepared to put in the hard work, victory will eventually be yours.
Starting a Home Based Business – When the Going Gets Tough the Tough Get Going
Things You Need to Do So Your Home-Based Business Doesn’t Fail
Are you thinking about starting a home business? If so, you have probably heard about all the wonderful options and freedom that home-based careers offer. However, you might not have thought much about the challenges you are likely to face while working from home. It is easy to get caught up in how great it will be to set your own hours, be your own boss, and work from the comfort of your living room. Of course, these are all very attractive aspects of working at home. But there are some other things to consider before making the decision to start a home-based business.How to build a Successful Home-Based BusinessStatistics show that about 97% of home businesses fail. This can happen for a variety of reasons. Maybe the business owner did not have a product or service with an active market; maybe he or she did not market their business sufficiently, failing to take advantage of social media and web-based marketing platforms; or perhaps he or she just gave up too quickly. Whatever the reason may be, here are a few tips to help you overcome some of the difficulties of working from home.Home OfficeIt is absolutely essential to have a space in the home that is specifically designated for work. Whether it is a corner of the living room, the basement, or an extra bedroom. Separating the work and living spaces is essential. You would be surprised how quickly working from your couch in pajamas gets old and frustrating. Mixing your work and living space prevents you from ever getting away from your work.Think of a scenario: You are done with work for the day. You made some good progress, sold some products, and now it is time to relax. If you have a home office, perhaps a separate room, you can leave that room, shut the door and go about your leisure activities. If you cannot see your work, it is easier to forget about it. Now, imagine that you are working from the dining room table. You finish work and decide to eat dinner. After making some food, you sit at the dining room table, pushing away stacks of paper and a computer to make a little space for your plate. As you eat, your work is all around you. How are you supposed to relax when you are constantly reminded of all the projects ahead of you?Product / Service ChoiceChoosing the right product or service to offer is a vital part of your potential success. Your product or service should be something that interests you, as this will affect your ability to passionately market it and stand behind it. This might seem obvious, but the product or service should also be something people want to buy. Many home businesses fail because they are marketing something that does not have a steady following. Your product or service does not necessarily need to be something with a huge audience, but it does need to have a strong, loyal market. An example of a market with both a large and loyal market is the health and wellness industry. People in this market segment are very passionate about their health. Once they find a product or service of top-notch quality, they will use it, promote it, and come back for more.Market Yourself IntelligentlyHome business start-ups do not often have the funds to hire a marketing agency or consultant to assist with getting the word out. Business owners need to rely on their own resources to market their business. That is where social media and web marketing comes in. The cost of these media channels is very low, they are easy to use, and the results can be massive. The first step is to get a website up and running. There are plenty of options for free or cheap web hosting and development. Engage your customers by creating accounts on major social media sites. Listen to what they have to say and talk with them. Social media is a great place to both market your business and connect with customers on a more personal level.Online ResourcesThere are many good resources available online to help home business owners get started. Don’t forget to check out your state and local government websites for free and unbiased advice on the importance of having a business plan, setting goals and measuring the results.
3 Low Cost Home Based Business Ideas
Many individuals nowadays are leaving their desk jobs in place of becoming their own bosses by establishing home based businesses. However, the most common concern about establishing business from home would be the start-up resources as some of the would-be entrepreneurs are either cash strapped or would like to put up a business without having to lose the shirts on their back. This article will provide you with three low-cost home based business ideas that you might want to consider:TutoringTutoring is a low-cost business that works especially well for stay-at-home moms, home schooling parents or even college students who would like to earn a little something on the side. You can tutor students who are in need of help in their academic or even foreigners who would like to learn English or helping them study the subject. The key element of this home based business is your knowledge of the subject matter that you are offering. While a college degree or teaching certificate may not be required, you will still need to have full grasp of the subject that you are teaching, especially if you are planning to tutor high school or college students.Meeting and Event planningMeeting and event planning is one of the most lucrative yet easy to start home based businesses out there. The reason for this is very simple – an event regardless of whether it’s big or small will need preparation and for this, they will need the services of an even planner. The reason why it’s so popular among home based individuals is because they will be able to specialize. Say, you’re really good at preparing parties for children then a birthday event planner will suit you best. Or if you have the knack for preparing special solemn occasions like weddings, baptismal, or anniversaries then you can specialize in those specific areas as well. Be wary though as this business can have you working long hours and the competition can be tough as well.Freelance WritingThere has actually been a boom in this area of home based business as of late. The process is actually very simple and can get you started very quickly. By registering to various sites which will be able to post your qualifications for such a job, interested individuals will be able to contact you along with their requirements plus the compensation that they are offering. After taking the interviews or tests required, you and your client will come upon an agreement for which he may or may not send you a digital contract. The best part about this home based business is that you don’t actually need to have a lot of people or even equipments to get started. With a fast internet connection and a good computer you will be able to start working from home, offering your writing skills to the highest bidder – so to speak.These three ideas mentioned above are just examples, because there are many more low-cost home based business ideas that you will be able to find online. Take your time in searching for them and find out which one suit you best. Just remember to stick to only those that are considered legal as you might get into trouble if you’re not careful with the home based business that you choose.
Home Base Businesses
It is a known fact that the whole world is suffering from Financial Crisis at present. The Recession brought a lot of problems to the entire world, which sadly led to having a lot of jobless people. Despite this problem, most people still do their best to live their everyday life in the best way that they can by finding legal alternatives for them to generate money. Right now, one type of money-making venture is considered as a great alternative for people to earn income the best way possible, and that is through home base businesses.Home based business is a new approach in the field of money-making, wherein the person is allowed to have a job and earn right within the four corners of your own home. Basically, home base businesses allow you to do work at home, either offline or online. Right now, there are thousands of jobs and home base businesses available online for job hunters to try, each of which provides a promising career and good monetary compensation.One good example of an online home based business is through freelance writing. In this setup, the freelance or article writers are allowed to make articles and submit them to their clients or editors and get duly paid for it in exchange. Another example is through web design and development, wherein web designers are able to create and prepare websites and pages for their clients and get paid for such service.Some of the latest advertising strategies and job opportunities available for all jobseekers at present are blogging and social media promotion. The latter will allow the companies to directly invade the social networking sites and be able to freely promote the products they are endorsing. Blogging, on the other hand, allows you to speak your mind for every entry, and then eventually earn dollars by placing company advertisements on your site.Offline home base businesses on the other hand, basically refer to the small business ventures you could actually take, such us setting up your own mini shop or perhaps a boutique. They are mainly done in person although some prefer to do it simultaneously with an online business by setting up online shops to expand the range of their target markets.What made the World Wide Web a handy tool for home base businesses is that computer and internet are readily available and one could conveniently use when it comes to marketing and advertising. This is so because of the multimedia effects and software available for everyone, making advertisement enjoyable and attractive to most surfers or online visitors.It is very difficult to find a credible job where you will be able to perform and maximize your potential and all your learning, and then get properly compensated in return. Opening online jobs provides fresh opportunities for most people to be able to be productive and be able to contribute well to the State. This innovative approach in providing jobs to most people is surely a good way to help the people and at the same time contribute in solving the problem regarding recession.
Starting a Small Business! Avoid these Four Major Entrepreneurial Mistakes
It is with much hope that every entrepreneur sets off starting a Small Business. Making money was his main objective. Failure was never in his mind but things don’t seem to happen the way he had planned for. Even the hope for Survival seems to have disappeared and Failure haunts him at every turn. Why does this happen and happen so often to numerous small business entrepreneurs?
The four major mistakes often made by new small business entrepreneurs are:1. Improper or No Research:The most fundamental thing to do before starting a small business is to do a market research to find out whether there is sufficient demand for the product or products you have to offer.
Perhaps the reason for the failure to generate the funds is that there is no market for your product or the market is saturated. The need for your product in your area of business activity should be your prime consideration before starting a small business. Only if there is sufficient demand for your products, you will be able to generate the funds necessary to help you run your small business, survive and succeed.2. Improper or Under Funding:Quite often the urge to start a small business is so great that the very vital aspect of funding is not given due importance. Businesses are started on a shoe string budget and shops open with very little stock and offices with insufficient equipment. To ensure the purchase of stock and equipment it is absolutely essential to have proper funding in place before commencing your business. Furthermore your business might take several months to start making a profit and hence funds are necessary to help your small business survive and keep your morale up during these early months.If you don’t have sufficient funds of your own, it will be wise and proper to obtain a loan before starting your business. This could be obtained from your bank or you can seek the assistance of the Small Business Administration which offers numerous loan programs to assist Small Businesses.
It is important to note that the SBA acts primarily as a guarantor of loans made by private and other institutions.Taking huge loans out of proportion to your needs can also be detrimental to your small business since provision has to be made for higher interest payments.3. Insufficient Advertisement and Promotion:No Business can be successful unless the public is made aware of the existence of your small business and its products. The best of equipment and stocks cannot generate sales unless the public is made aware of it. Hence advertising your small business and the products before the commencement of your business and thereafter should be a major consideration. Failure to do so has been the cause of failure of several small businesses.4. Unnecessary expenditure:One of the major causes for the failure of a small business is the improper handling of the funds. Extravagant expenditure at the initial stages such as the purchase of expensive cars, equipment and expensive business lunches completely out of proportion to your needs can eat into the capital and leave your small business with very limited working capital. Hence proper and wise handling of funds especially at the early stages can make all the difference between success and failure.Conclusion:Failure to avoid the above mentioned mistakes for one reason or the other can be detrimental to the progress and success of your small business.
Securing the services of a consultant to help you plan out your small business before starting will be a wise move to ensure success.
Home Based Business Opportunity – Were You Aware Of The Benefits Of Having A Home Based Business?
Home based business opportunity, what does this exactly mean? A home based business opportunity can represent a number of ways to start your own business from the comforts of home. You could decide to become a freelancer and write articles as a ghostwriter or make a website and sell your products that you have created as a home based business opportunity.
A business operated from home can give you the freedom to work when you want to, as much as you want to, and wherever you want to. You can log in at a library and check your email and your website while being on the road if you don’t have a laptop. You can visit a friend and check on business and even attend a web conference while visiting with family during the holidays. The type of business is yours to choose and yours to control.
A business operating from your home comes with great tax breaks. You can claim a home office whether it is a room, or ten feet by ten feet of space, by using a home based business. You can deduct whatever you use for the home office along with any equipment you had to buy to start your home based business opportunity. A great example is a brand new computer. You can use this for your new home based business opportunity and let it depreciate. Take all your pens, copy paper, and everything and claim as a business expense.
You could be introduced to a business opportunity by a friend or something you were reading online. Maybe selling vitamins caught your attention or learning internet marketing as a great potential business opportunity. Or, perhaps you wanted to try affiliate marketing as a business based out of your home and not even touch the products or services at all. With this type of business, all you have to do is place classified ads and get internet users to click on your affiliate link. There are many great ideas to think about when you have a business you can run from your home.
There are a lot of businesses available today that you can operate from home and they are structured to quickly get you on your feet and keep you financially stable. All you have to do is set goals every day, every week, and every month to achieve them and then once achieved; live your dream life.
When looking for a home based business opportunity, be realistic about the goals you have set. It takes time for things to fall into place. Look for something you love to do in a home base business. If you are not sure about a specific type of business, try another idea that you are more comfortable with. You can start slow in your business by reading and learning before the actual doing. There are plenty of eBooks and how to websites to give you help and ideas to make your business a success.
A Home Based Business can give you the freedom you need to have more time with your family. You never know, a home based business opportunity may entice some of your family members to start their own venture alongside you!
What Is an Online Advertising Network and How to Utilise a CPM and CPC Advertising Network
Utilizing the Different Online Advertising Network Formats for Your Business
The Internet has become increasingly complex over the years, so much so that today, it has almost become a necessary household tool that’s being used by almost everyone.
And, with the evolution of the Internet, also comes the evolution of online advertising. Today, online ad networks come in different formats and vary on how they serve advertising content to users, and it is a business owner’s responsibility to know and understand more about these formats, in order to find out which one is best used for a given marketing strategy.
CPC Advertising
CPC stands for “cost-per-click” advertising, and is arguably one of the more simple advertising formats to use. It’s a format that generates revenue for the publisher when the user gives a single valid click-through on the advertisement hosted. CPC ads usually come in text-based and rich media formats, and the most effective ads utilize some form of “call to action” to be noticed.
Utilizing the service of a CPC ad network is effective when the business is attempting to generate new leads, as well as driving new and potential customer sales. Hence, it is best utilized by publishers who have lower amounts of web traffic.
CPM Advertising
CPM stands for “cost-per-mile” advertising. In this format, the advertisers pay the publisher a set amount for every thousand actions a certain ad receives. CPM advertising is quite similar to CPC, but on a much larger scale. CPM advertising networks usually cater to publishers who receive a large amount of web traffic prior to their approval, due to the volume of potential leads that this format generates. CPM advertising networks are best used when the product being advertised is now receiving a growing amount of product exposure or recognition.
CPA Advertising
CPA stands for “cost-per-action” advertising, and is a commission-based advertising format in which the publisher receives revenue when a user clicks AND buys the advertised product or service being served. The amount of revenue the publisher receives is a percentage of the total price of the product being purchased. CPA advertising networks, or “online affiliate networks” as they are commonly called, are preferred when the business wants not only to increase their potential leads, but also their sales.
What to Use?
Deciding on what advertising format and online ad network to use largely depends on the capital available for the business, as well as the quality of the product being published. For newer brands who are taking some time to build their reputation, a CPC advertising network is preferable. Once the brand has generated enough leads, and has build up a very strong reputation level, switching to a CPM advertising network should now be considered to avoid running low on capital when the ads have a higher click-through rate. Finally, once the product and brand has established a very firm foundation for its reputation, a CPA advertising network should be used.
Of course, limiting yourself to one ad network certainly isn’t going to get you anywhere. In order to truly succeed, utilizing all of these in conjunction with each other is the best strategy to generate the maximum leads and revenue possible.
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.