Business

Training

Objective & Overview

To process sellers estate or business in a safe, prompt, efficient, and quality-oriented manner to maximize the sellers return on investment and maximize the auction company commission. Processing an average auction should take four to seven eight to ten hour work days at most with a three person team.

Do the Math to Maximize Profit

Lots should always be based with a least average bid value of twenty-five dollars. The average labor and overhead cost to produce one lot is $4.18. If the commission rate is the recommended 30% then a lot that yields $25 will net a profit of $3.32 per lot. To put this in perspective a 400-lot auction should yield a gross commission of $3,000 and a net after labor and overhead of $1,672 for the auction company, again this is net after overhead and labor are paid.

If the processing time is 5 eight-hour days (40 hours) then the auction company netted $41.80 per hour after labor and overhead. These are practical numbers that may be achieved if the auction is assessed and processed properly. This manual will show recommendations on how to process the auction to achieve greatest return for both seller and auction company.

Sourcing product for auction

There are many ways to obtain product and new consignors/sellers. The important thing to remember is get out there and network, spread the word about your business. The first tool should be business cards and your own business website that is geared toward sellers. everything from estates, Businesses and consignment liquidations should be considered.

common mistakes

These are quotes from former online auction company’s that made poor decisions that lead to their business demise. The people who had these attitudes towards their online auction business are no longer in business. Don’t make the same mistake!

There’s power in saying “No” to low quality items. Liquidating High Quality items is a self fulfilling prophecy & leads to a successful auction business!!

IMPORTANT NOTE:

Don’t get focused on what items “should sell for” based on eBay and other auction sites. Remember, an auction produces a true “Fair Market Value” (FMV) of items based on competitive market driven bidding. When a lot closes, that is what the item is valued at. This is why courts always order an auction in a liquidation judgement.

Advertising is NOT an Option

There are 2 groups to which you must advertise & market. Sellers & Bidders. The goal is to let sellers know you are the solution to their liquidation problem & bidders desire inventory. Bottom line – place your business info on quality advertising sites whenever possible.

Each Auction company should focus 75% of advertising resources on securing new sellers/consignors and 25% on buyers. Remember Auction Spear has focused 75% so the auction companies can focus more on new sellers/consignors.
Advertising is not an option. It must be done if you want to grow your business! Do not expect someone else to do it for you!

The Customer Assessment

The customer assessment is your chance to personally connect with the seller and build a relationship that is win win.

When scheduling an assessment with a new client, try not to answer to many of their questions over the phone or via email. The goal should be to schedule the Free assessment with the client. The reason for this is, it is statistically proven people will more often sign a contract after meeting face to face with the company representative.

Don’t be a pushy salesman, instead focus on educating the client about your services and the benefits you offer.

You are the solution to their challenge, be confident in your ability to perform the task. Dress professionally & make sure your vehicle is presentable. Ask if they are interviewing other liquidation professionals & why. Be polite and positive & ask about their needs & expectations. Present your services in a solution based educational manner. Find their overall goal for the sale – Vital to know. Give them a prepared packet with key information about your services and a contract, include your contact information. Leave them with a positive message. Contact them within 48 hours after the assessment to move forward and get a signed contract prior to performing any work.

Your main goal is to educate the seller about your service and why it is the solution to their problem.