Home Based Business Opportunities – Identifying the Problems and Damage Control

Home based business opportunities might sound very easy and attractive for someone who wants to start a business. However, if proper steps are not followed it is not going work out well for you. You will need to possess proper knowledge about the business which you enter into and you should also have the strategies ready if your original plans do not work especially for your home based business opportunities.No business in this world is trouble free and home based businesses also have their own distinct set of problems. You should have a pre-defined plan to drive your business even during the tough times. The key for the success of any business is to identify its loopholes and fix them at the appropriate time before the problems manifest into something destructive to your business.The following criteria should help you to identify some of the problems that could crop up in your business.Practical expectations:You should have realistic and practical expectations about your business since it most likely will not yield you any unforeseen profits overnight. This is to say, you should have realistic expectations based on the type of business you run and understand that it grows over a period of time and it will not make you rich overnight. Any kind of business will take its own course of time to stabilize and start returning a profit on your investment.Customer relationship:The key to any kind of business is the customer relationship. You will need to maintain good relations with all your customers and keep them attracted to your business by giving discounts and other benefits from time to time.Unproductive resources:Good businessmen always understand the importance of manpower resources for their business. You cannot afford to have too many people working for you unless they are critical to your operations and even then, only if they contribute to the financial returns on your investment. You should be able to get the work done with limited resources by eliminating the employee positions which are not critical to the success of your business thereby eliminating any unnecessary drain on your financial resources.Expenses:You will need to keep a close check on the business expenditures and cut down on any unwanted expenses. There is a saying that every penny saved is equal to a penny earned. As an example, you will need to cut down the cost of operating your business by eliminating the ineffective processes in your business, like buying the raw materials when rates are high and etc.Watch your competitors:You will need to keep an eye on your competitors in other home business opportunities. You should know what your competitor is doing to win customers and to grow their business. If possible, you should try to adopt some of their winning strategies into your business.You should be to open to learning new things to run your business. You will need to be flexible enough to make the changes in your business plan whenever the situation demands.Once you identify any problems, you will need to strategize your damage control plans. If the problem is complex, you could try fragmenting it into smaller segments and then try solving them individually.These are just a few helpful steps in identifying and solving some of the real problems that could prevail in any of your home based business opportunities.

Home Based Business in the New Modern Age

A home based business is a small business that operates from the business owner’s home office, and is especially available for students, house wives, and retired persons. Nowadays, many people want freedom and more respect for work done, which is why they seek opportunities on the internet to earn. Like any other business, a home based business also needs some time to get established. Though there are many different types of home based business opportunities, choosing the right one and a diligent search is essential.The most commonly sought options include:Paid surveys:Survey companies pay people to answer surveys. There are many sites that pay for taking surveys and can be registered for free most of the time. After registration and email address verification, simple surveys are sent out.Based on the answers, if the person is qualified, the survey is filled out. The points or amount will be shown and payment can be claimed once it has reached the desired level. The payment is made generally by check or PayPal.Data Entry Jobs:There are various companies in the market, looking for people to do data entry jobs. Data entry work from home, offers you an opportunity from home and do not require any special expertise. It needs good typing speed.Once you are awarded a job, you have to agree upon the monetary issues with the service buyer for price and payment method. Once you receive the task, do your best to produce it accurately and submit it promptly.Online copy paste job:The Job involves posting of business ads on various web sites or other tasks that involve copying and pasting from one resource to other. This is similar to data entry and does not require any technical qualification or knowledge.Pay per click:A website will be created for those who join. The company sends advertisement of various companies and once an ad is opened the company pays a certain amount to the website owner.Writing:Writing is another job that can be done from the home. There are many companies that source their content requirements to people who have good English and can write on a regular basis and stick to deadlines.Affiliate Marketing:Affiliate Marketing is another opportunity that is gaining popularity. This also is an opportunity that is done from home. Without any huge investment, without any need for a physical office or warehousing of products or any other efforts related to a business, this unique opportunity offers a successful career.Those with a real job may quit in hopes of a better one, only to find they cannot get their original job. There are many sites that offer home based business opportunities. One must be careful if a site asks upfront for registration fees for training or actually giving them the job. Genuine websites do not charge before giving work. While not all are scams, few end up being legit. It’s important to check the jobs that are genuine and apply for the same. Honest efforts with prudence does get paid! So, if you have a system and internet at home, there is nothing to stop you.

Online Home Based Business Opportunity Craze Has Business Seekers Scrambling to Shoot

Before deciding whether an online home based business is for you, you must consider if you have what it takes. While the name definitely sounds appealing and the sales pitch is definitely enticing, without the qualities that are required to be successful, you will fail.The online home based business opportunity can present itself in many forms, such as through the affiliate programs, becoming a webmaster or building your own blog and selling handmade handcrafts and more. There are limitless opportunities on the Internet, many of which are legitimate. Before jumping into anything ask yourself if you have what it takes to be successful:• Are you practical?• Are you imaginative and creative?• Are you an achiever?• Are you self disciplined?• Are you independent?• Do you take action?• Are you patient?• Do you interact well with others?• Are you determined?• Are you motivated?• Are you easily discouraged?• Are you a goal setter?• Are you interested in the product?• Do you have the hours it will take to be successful?• Are you persistent?• Are you consistent?• Are you open to learning?• Are you a self starter?If you answer yes to most of the questions, then you likely will be successful, and should follow your dream of an online home based business. The online home based business opportunity does come in many shapes and forms, and you should study each before jumping in.Definitely choose one that interests you. If you have a knack for fashion, you might choose to become an online retailer. This can be achieved through various affiliate sites on the Internet or you may choose something as simple as setting up an eBay store. Through the affiliate sites, you will be able to apply to a variety of online retailers that interests you. Once you are accepted as an affiliate to the online store you will be given your own website to promote. Many of the online retailers work through a lead and a sales commission, so the business can become quite lucrative. You might also choose something that you can sale both off the Internet and on the Internet, attracting many friends and family members to join you in your entrepreneurship quest. Online home based business opportunities of this type would include something possibly for the home or vitamins, among various other options.The online home based business opportunity allows you to be your own boss and set your own hours. It is also is your responsibility to make it successful and you will need to learn the various ingredients that it takes to make it on the Internet and off the net. On the Internet, this means promotional marketing. This today, is completely centered on search engine optimization, and can be easily learned through visiting the forums and taking online training courses. Off the Internet, it means having the tools to present to various prospects such as business cards, brochures or flyers, and the knowledge of your business to thoroughly discuss it with others.If you are interested in an online home based business opportunity, research the affiliate programs and the various online businesses that are available through the Internet. Also, do a background search on the business you are interested in by visiting the scam sites and reading anything on the Internet that may be published on the Internet.

Participating In Home Based Business Forums

Forums in the internet are commonly known as a place or a site online where people virtually meet to discuss various topics. So what are home based business forums? Obviously, home based business forums are places where online businessmen meet to talk about home based business. In fact, anyone who wishes to know more about home based business can participate in these forums.These forums can be helpful in a lot of ways for both starters and experts in the field of online business. In other words, participating in forums has numerous benefits than you could imagine.First, participating in forums can help you introduce your website to other people without spending money for advertising. Forums allow you to have direct contact with other people whether they are fellow businessmen or potential clients, therefore, you are able to get the chance to introduce your site to them.Second is in connection with the first. Because you are able to introduce your website to other people through forums, many people will know about it especially those who require whatever information, products or services you have on your site. With this, you are guaranteed to get a lot of traffic to your site in no time.Third, back link building is possible when you participate in forums. Back links help you generate more traffic to your site. So, if you know how much back link building can benefit your site, you would certainly be convinced to participate in forums.Fourth, you will be able to gather fresh ideas at forums. All businessmen have different strategies they use to make their home based business thrive. So, while you may have your own strategy, when you visit forums, you will also learn of unique and wonderful ideas for your home based business that you can apply to be successful. You can also share your ideas to other people to help starters thrive, because like them, you were once a starter too.Finally, when you are active in forums, you lessen the risk of people thinking your website is a scam. One thing that hinders the flow of traffic to your site is because of the risk for clients to be scammed. Since clients don’t want to be tricked by fraudulent sites, they don’t easily trust websites especially those they don’t know about. When you participate in forums, you build client’s trust as well as the trust of other businessmen. This allows you to be known as a credible site and not as a bogus site.Overall, when you participate in forums, you get advertising, back links, traffic, ideas, and credibility, all for free. You don’t have to pay any fee just for your website to acquire these. You can even make and meet new friends through this. In other words, the most convenient, fun and economical way for your home based business to succeed is through home based business forums.

Small Business Legal Plans: Does My Small Business Really Need A Legal Plan?

How many times have you watched the news, read a newspaper, listened to the radio, or saw an article online that reported on a frivolous lawsuit filed against a small business. When you see the word frivolous, you immediately think that business either has won the law suit or will win it. But what one must consider is that many times a small business owner must spend a substantial amount of money to retain legal representation to defend against that law suit. And for a small business, more often than not, that expense can be huge, and thus, can be the difference between keeping the doors open and shutting them for good.Taking the law suit issue into consideration all by itself, makes for a valid argument for your business having a legal plan that offers some sort of law suit protection. But in addition to that, there are all types of other obstacles that can find their way into the operations of a your small businesses.Issues such as workers’ compensation, debt collections, business financing, hiring and firing, bad check recovery, and a host of other items, must be considered, when deciding to risk going it alone with out a business attorney or small business legal plan.Even just one basic item like contract or document review can present a legal issue without seeking proper legal advice. Think about it. It is almost always inherent that your business will offer a service or product that will require a contract. And your business, more likely than not, will purchase services or products that will require you to sign one. Let’s face it, in today’s litigious society, a good legal contract is vital to maintaining a good business relationship with your customers, and just as important, protecting your small business. There are a few small business legal plan providers that offer contract and document review. What you have to decide is if the cost of a s legal plan is worth adding to your companies’ expense sheet? One way to do this is to list every risk, large and small, involved with your business and compare that to the cost of the small business legal plan that best meets your needs.Most legal expense companies that offer coverage that includes the basics like debt collection letters, contract and document review, legal correspondence letters, and consultation. This consultation can range from trademarks to city zoning. And few companies offer even more extensive coverage, like trial defense services, which provides legal representation should your business be named in a lawsuit. Other companies offer website builder and hosting services, as part of your premium. When you consider that lawsuits have gone wild in America and Canada today, coupled with the fact that it is a must that your business have an internet presence in the current communication age, these types of extra coverage can be a very big plus.In conclusion, when asking the question “Does my small business really need a legal plan?”, one could suggest that it’s not if your business needs legal coverage, but what type and how much. There for, one could propose that the real question that needs to be addressed is, “What legal expense company offers a small business legal plan that provides my business the best legal coverage at an affordable rate?” You can’t possibly cover every risk, but a comprehensive legal plan should provide the best possible chance for success.

Online Home Based Businesses

With most transactions being done through the aid of the computer and the Internet, home based businesses conducted online have gained immense popularity over the years. Opportunities abound in the Internet and many people try their luck in engaging in one or more business ventures. However, not all players who have online home based businesses have met with success, as the probability of failure is equally comparable.

If you are interested in engaging in an online home based business, then you must remember that establishing one requires hard work on your part. Bear in mind that this is all about you, your product or service, your time schedule, how you execute your marketing program, creating and keeping your network of clients and prospective clients, and in the end, generating income for your business.

In setting up your online home based business, you need to have a start up capital, the amount will depend on what business you want to go into. Your capital should take care of your overhead costs like electricity use, Internet connection, and other equipment, like a new computer, that you might need in starting your online home based business. If you want to sell products online, then your funds will be used to build up your inventory of items to be sold.

In choosing what online home based business you want to establish, there are a lot of alternatives to choose from. If you want to sell your services, then there are businesses involving copy writing, web site building, web content writing, acting as consultant for research or marketing projects, or financial consultancy. If you prefer to sell products, your web site can serve as a store showcasing your own handicrafts or goodies/treats or you can act as middleman and sell other people?s products. Selling second hand products like clothes or books is another option and you can do this through setting up auctions or bids online.

Having an online home based business can be profitable if you just know how to properly manage it.

Using Multiple Sources of Small Business Financing

One misconception about starting a small business is that the only way to receive small business financing is through a bank. Though the bank is a viable option, it is not the only option. Looking towards multiple sources of financing can get your small business the financing it needs. Alternative sources of financing can be used instead of, or in addition to a bank loan. Using multiple sources of financing can help a new or veteran business owner maximize his/her business’ working capital.

Listed below are a variety of small business financing sources, that small business owners can utilize when building, expanding and maintaining their businesses.

Small Business Administration

The small business administration was created to help small businesses get on their feet and remain on their feet. Their mission is “…to maintain and strengthen the Nation’s economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters.” So why not look to the SBA for assistance?

The most common SBA loan program is the basic 7(a) loan program. This program is specifically designed for small business owners who may not be eligible for business loans through normal lending channels. Other loan programs offered by the SBA include the 504 Program, which provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings, Micro-Loans that provide very small loan amounts for startup small businesses, with a maximum loan amount of $35,000. Disaster Recovery Loans, which can assist in the recovery of your business if it is involved in a disaster, and Special Purpose Loans, that can be used for any special purposes within your business.

Grants

Just like there are scholarships available for just about anything, if you do enough searching, you could find the small business grant that works for you and get free money to finance your business. Though the federal government does not offer grants to small business owners, there are numerous other grants available for small business owners. You can look to your own state to find free funding your small business. Every state has a state development agency, and many of these agencies offer small business grants, and/or information on where to find them.

Small Business Cash Advances

Though a small business cash advance is not plausible for startup businesses, it can be used after your business has been up and running for a period of time. A business cash advance can offer fast and easy-to-obtain money for your small business’ financial needs. With few requirements, even business owners with average or fairly below average credit scores can qualify to receive a business cash advance.

Financial Intermediaries

A financial intermediary is a person who specializes in finding funds for business owners. Once you’ve done all you can to find money for your business, try hiring a financial intermediary to find the funds that you may have overlooked.

You can decide to use the expertise of a financial intermediary in order to give yourself the time to work on other aspects of your business, or you can use them in combination with your own expertise; as the saying goes, two heads are better than one.

Financial intermediaries can also be used to help in the start up of your business, offering help with the writing of business plans, proposals, etc.

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.


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