A Simple But Effective Criteria to Help You Choose the Best Home Based Business

When I write this article I am reminded of the saying “when you do what you love you never have to work a day in your life”.So for this reason whether you work in a job for someone else or in your own business, based either at home or in an office or factory, the ideal is to do what you love.But I am not here to talk about all types of jobs. I am talking specifically about the home based business in the area of network marketing.When you set out to investigate working from home having a criteria to measure prospective businesses against might is essential. Here is my suggestion.
Do something you love

Choose a growth industry- it is important to do your homework and make sure that whatever you are buying into is not a fad or soon to be superseded

Lucrative- high return for time put into the job. We were realistic enough to know there is no such thing as a free meal ticket……a real business requires real work but we certainly did not want to be working 24/7 with no time for fun things.

Systemized – with “tried and true” systems in place to follow from the word go. Learning the business by that often costly method of trial and error is not ideal

A reputable company that provided ongoing support- This is essential especially at the beginning of any new business when there is a lot to learn. It is vital to have access to people who are succeeding and are willing to help and advise

A sound compensation plan with residual Income built in- Plan to build your business and your income simultaneously. So if you are looking at a network marketing business you need to become very familiar with the compensation plan as well as how many people in the company are top income earners and how long did it take them to get there. All too often a business can look great on the surface but when you delve a little further only a select few are making the big dollars and it has taken them years to get to that point.

No monthly quotas to stay in the selling position or stock to keep and ship- Having these kinds of restrictions can be disastrous when you find yourself at the end of the month buying up enough goods yourself to stay afloat
So if you are looking at researching a home based business to set yourself up for financial freedom this criteria might be just what you need to make an informed, intelligent decision.

Beware of Home Based Business Ventures Requiring a Large Investment Up Front

Because there are so many home based business ventures out there choosing the right one can be difficult to say the least. Most genuine opportunities will require a small investment up front but beware of those that ask for large amounts of money.People sometimes make the mistake of thinking that businesses that require a large investment to join and set up must be very profitable and successful and are going to guarantee them success.This may well be the case if you are already a millionaire and planning on purchasing a McDonalds franchise but for the average man in the street this is certainly not going to be the case. Probably exactly the opposite in fact!Here are a few things to keep in mind that will help you make the decision that is right for you.1. Find a home based business that is centered around a product you already have belief in because you or someone else you know has used that product and had a positive experience with it.Promoting a product you genuinely believe and can give a positive endorsement of will help very much when it comes to making sales and money. You will also avoid the possibility of losing money when you later discover that the product is not up to the standard you were expecting.2. An easy way to highlight any positives and negatives of a potential home based business that will also help you work out how you truly feel about it is to do this simple test.Take a piece of paper and divide it into two halves. On the left hand side list all of the positive things about the business you are looking at and on the right hand side list all of the negative things about the same business.After doing this sit back and analyse what you have written down. What are the pros and cons? How do you feel about the business now that you have studied the results?3. There are many home based business ventures that you can start very cheaply, often for under $100. Some of them are even free!There are many companies and opportunities out there who will supply you with all the tools required to make a success of your home business for under $100 including your own website and email autoresponder to help you market your products and make sales.There is very often no cost at all associated with getting started as an affiliate marketer and many very cost effective and often free ways to promote your products. For example, article marketing and blogging are a couple of very effective ways to generate affiliate sales.4. Today many people build successful businesses by doing things for other Internet marketers. There is a lot of money to be made with graphic design, blog set up, article marketing, virtual assistant, blog writing etc.There are many things that need to be done constantly in order to build and maintain a successful online business. These tasks can become very time consuming when trying to do them all at once and a lot of business owners are more that wiling to pay other people to do some of the work for them.Outsourcing is big business these days because many business owners find that there workload is just too much and prevents them from actually running their businesses effectively.This is also a very cost effective way of starting up a home business. Depending on your skill level you may have to educate yourself about online business and this may involve purchasing some training materials. This should be viewed as a worthwhile investment in your future that will help you build a better business and make more money.These are a few things to keep in mind when considering potential home based business ventures. Never jump into an opportunity. Always take the time to consider and research the company, product and opportunity. This is very important because the very people who are usually looking for a way to earn money from home are the very people who can also not afford to lose money by making a mistake and a bad investment.

Best Home Based Business – Home Party Industry Vs Online Business – Which One is Right For You?

Could you use an extra stream of income? A home based business is a viable option but how do you know which one is right for you? A few areas to consider when trying to decide on the best home based business is your personality, time available and profit potential.-Personality: When considering the best home based business, your personality can steer you in a general direction. Many direct sales companies recommend having home parties or one-on-one meetings as their main focus for selling products. This requires contacting friends and family to host a party. If you have trouble talking to people face-to-face or in groups or don’t want to impose on those people closest to you, the home party industry may not be for you. However, it’s not to say you can not overcome your obstacles and have a successful career in the home party industry.On the other hand, a strong and outgoing personality easily fits the criteria for that industry but does not limit oneself to just the home party type of company. All personalities lend itself well to online businesses for two main reasons. First, no matter if you are shy and quiet or friendly and outgoing, many online companies have extensive training to guide you every step of the way taking fear out of starting a business. And second, if you fear talking to people about an opportunity, many companies are automated in which your only job would be driving people to your website. Some online companies even offer online assistants who will close sales and help lead you toward success.-Time: Another factor in choosing the best home based business is time. The home party industry typically promotes having parties during the day, evening or weekends. This could be difficult to schedule around your family’s needs. The online industry is more flexible. If you choose, you can work in the middle of the night and not disturb anyone. Can you imagine asking your home party host if you could start the party at 10pm after the children are in bed? The host would think you are crazy!-Profit Potential: If you are going to spend your time and energy building a business, choose the best home based business that fits your expectations for profit potential as well. Home Party businesses generally offer 30% to 50% in profits. The online industry is usually 50% but the sales are in larger quantities and in some cases provide residual income where you can continue to get paid an override on a sale you made in the past. Online businesses open a huge market far beyond the number of friends you have or the size of your family. All you need to do is learn how to capture online sales and plug into an organized system that guides you to the path of success while working from home.I would recommend exploring your options based on your personality, time available and profit potential when deciding which is the best home based business is for you. Whatever direction you choose to go, keep in mind that the most important ingredients to being a success are consistency and persistancy…take action every day!

Finding The Right Home Based Business Is Critical To Your Success When Working From Your Home

Starting a home based business can be one of the fastest ways to get out of the rat race while simultaneously creating the opportunity of “firing your boss” but make no mistake, it’s not all glamour and glitz. The fact is, developing a profitable home based business requires hard work, determination and a strong desire to succeed.Finding the right work from home opportunity revolves around a combination of items, such as the initial start-up costs, the actual opportunity itself, the quality of the product or service that is being offered and your own personal tastes and interests. With all that said; one key component that can not be duplicated or replicated is the actual asset of any home based business and that is the “You Factor”.The “You Factor” is what I consider to be the most important asset for any successful home based business. It is the driving force behind becoming unsuccessful, slightly successful or highly successful.Let me give you an example, if you are a hands on type of person that enjoys doing mundane tasks that other people avoid doing such as lawn care/landscaping, window washing, car detailing or house cleaning then those types of home based business opportunities might be just the ticket you are looking for in order to break out of the rat race lifestyle.Sure, each of those jobs represent hard work and require an individual who enjoys those types of activities but the fact is there are many money making work from home opportunities that can be taken advantage of within those fields.Of course, if you’re anything like me and prefer the direct sales route as the basis for your home based business then opportunities such as selling baskets, rubber stamping products or wickless candle warmers are exceptional ways to start working out of the comfort of your own home.As a home based business owner who has participated in several money making work from home opportunities along with several other direct sales companies I have determined that the only way to truly succeed is by finding a company that allows you to take full advantage of your individual “You Factor”.Of course, it also helps tremendously if you join a company that offers products that are impressive looking, easy to use and extremely easy to market. Those factors combined with the very low initial start-up costs make it easy to see why so many people are starting their own home based business.Of course, this direct sales opportunity is no different from any other because you will still have to approach potential customers, develop a viable marketing strategy and grow your business by recruiting others to join your sales team.Additionally, you will still require the skills necessary to conduct your business in a professional manner allowing you to provide first rate service to your customers and leadership, guidance and mentorship to the downline members on your team.With the current world economy being what it is, starting a small home based business with a minimum start up cost could be just what you need to escape the rat race.

Increase Your Chances of Getting Approved for a Small Business Loan

Depending on their capital, finding the necessary funds to operate their business is one of the most difficult tasks that a small business owner must face. At one point, expansion becomes necessary for growth and before this happens, the small business owner must be prepared. Before expansion and a small business loan to fund it become necessary, the small business owner should take the necessary steps to help him minimize the difficulty involved. It pays to know what you need to help you increase your chances of getting approved for a small business loan.Risk is your enemy when applying for a small business loan because it’s the only reason that lenders such as banks will turn down your loan request for your business. With the right preparations, you help yourself seem less risky in the perception of lenders so that you can get approved for your loan.Government and community grants are now a thing of the past and if you think you can start with that, think again. This is one common error that entrepreneurs make. You’re more likely to be able to get funding from family, your own savings, friends, or from conventional lenders.Here are some of the things that lenders look into in their applicants for small business loans:Credit score and history
Business plan and its feasibility
Business history and performance
Education
Business cash flowThese are just some of the many things that you should prioritize in taking care of when applying for a small business loan.You need to ask yourself several questions first, before applying for a small business loan. These questions are most likely questions that lenders will ask you too when you apply for the loan. Prepare your business plan and know that this is very important. The business plan needs to be able to show the lender that your business is feasible and can gain profit which in turn gives them gain in their investment. This means that the lower risk they see in lending you money, the better chances you have on getting approved.How much money do you need for your business expansion? This is the first thing you should ask yourself first because this determines the direction of the loan application. Be sure that you request only for the amount of money that you need, nothing more and nothing less.Where will the money go? Lenders also want to know how you will invest their money so they’ll know the kind of risk involved. Provide detailed information where every dollar will be invested in such as operations and acquisition of new equipment and/or facilities.When will you pay off the loan? Be sure that you also give the lender an idea when they will be able to get back their investment. Convince them that you’ll be able to pay in the expected time you give them.Lastly, many people think this is unnecessary but it’s a plus on the part of lenders. Tell lenders what you’ll do if you won’t get approved for the small business loan. This tells lenders that you have persistence and will not get discouraged if they turn down your application. This portrays a confident and determined personality – someone they can trust.Sometimes all you need is a little more cash. If you have bad credit you should consider a bad credit loan from a company like BHM Financial. Bad credit loans can give you the cash you need to achieve your goals.

Creating The Most Successful Home Based Business With The Help Of A Coach: Part 1

Many of you might have heard from internet marketing gurus preaching as if everything in a most successful home based business, (ie. example online business) depends on the traffic of your website. Is that the only criteria for a successful home based business? Of course not! The truth is that the most successful home based business principles are not largely different from those of typical businesses. You cannot disassociate online business from the realities of the market because you are still selling to real people.

Have you ever wonder why some people have found successful home based businesses while you are struggling? Do they have access to the best rated home based business, the best online marketing business opportunity, or the best business opportunities from home which you do not have? What really make them possess one of the most successful home based business? Lastly, what is their key to their success? The good news is that there are no secrets to it! These successful people depend heavily on their mentors or simply coaches. Isn’t it common sense? Just like how we have acquired knowledge from our school teachers. (The only difference being that school teachers do not teach us how to earn money.)

Successful entrepreneurs have mentors for the very same reason why Michael Jordan has coaches. Many coaches have helped and groomed Jordan into a basketball legend (Of course, most of it depends on Jordan’s hard work). In the same manner, you will also need coaches to make you success in whatever you do. You alone cannot possibly know everything by yourself especially in starting a home based business.

If you have coaches, they will show you latest examples of the successful home based businesses, fresh and latest home based business ideas or opportunity, latest online marketing business opportunities and teach you strategies to create a successful home based business of your own. Moreover, you will be exposed to new and exciting products ideas, multiple streams of revenue which you could generate. Most importantly, you can harness their experience to help you avoid costly mistakes.

As coaches are expertise in their own trade, they have many contacts and resources. With their experience, they can show you where you can obtain the most successful home based business opportunities, resources and contacts to aid in your internet marketing or online business. Therefore, you should not have any more worries of not knowing how to start off with your own internet marketing or online business. Whenever you have any queries or got stuck during the process, your coaches are the ones to guide you where and how to move on. Before you start off with your home based business, you can discuss your ideas and plans with your coaches. They will show and lead you to the path of success, clearing the entire impasse along the way. Who knows, you might just be the next owner of the most successful home based business!

In the next part of this article, I will continue to illustrate more benefits a coach can bring in helping you to create one of the most successful home based business which you have always wanted.

Government Grants for Small Business: Finding Them and Getting Them

Starting or expanding any kind of small business is difficult, but it can be especially difficult if you don’t have enough capital. Raising capital for start-up or expansion is often your biggest challenge. If a loan is not possible for you right now, and if you haven’t been able to line up any investors, don’t give up hope. There may be a chance that you qualify for government grants for small business from the U.S. federal government.

Small businesses have historically played a significant role in the U.S. economy. That’s why the government has an interest in facilitating the growth of small business with government grants for small business. Even though small business is central to our economic health, the bureaucrats in Washington are not necessarily just waiting to give out government grants for small business. The government normally uses grant money to encourage business development in certain fields or specific locations, or to level the playing field for everyone. But there are quite a few bona fide government grants for small business and they can be substantial.

Government grants for small business are available to new business start-ups and existing businesses. As you might suspect, you’re probably not the only small businessman looking for help in the form of government grants for small business. Be prepared for competition if you qualify and apply for a small business grant. Attention to detail in the application process can often make the difference between winning and losing government grants for small business.

Depending on the amount of money involved, application procedures and forms for government grants for small business can be long and complex. The trick is to break the application into manageable pieces. If you don’t already have an existing team of business partners to help you, consider outsourcing some of the application work to a consultant or freelance writer. When it comes to government grants for small business, application deadlines are firm and turning your application in late is not an option.

You can do some basic research on the availability of government grants for small business at the Small Business Administration’s website. The SBA is mandated with helping small businesses succeed, but they normally don’t give grants directly. Government grants for small business are usually provided by other agencies, depending on what the grant is meant to accomplish.

If you’re interested in starting a small business or expanding your existing business, then you should start finding out all you can about government grants for small business. You may want to opt for an online directory service to help you figure out which government grants for small business you might qualify for. The structure of government can be mystifying sometimes, and you wouldn’t want to miss out on a grant you’re qualified for just because you couldn’t find it. You’ll soon learn that the secret to your small business success is to concentrate on doing what you do best, and outsource the rest.

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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