Is your business or company preparing for an industrial auction to sell off euipmment or other items? Whether it's commercial and industrial equipment, vehicles, construction equipment, excess inventory, tools and shop equipment, closeout items, surplus and salvage items, or any other industrial items, an auction may be exactly the solution to sell your inventory. However, auctions are a lot of work. Companies should weigh the perceived benefits against the effort involved with setting up and hosting an on-site auction. Following are some things you might want to consider:
Inventory - A large selection of items are necessary to generate interest and maximum sales. Most people will not show up to an industrial auction that does not offer a large inventory of items. While there is no magic number, it is generally recommended to offer a minimum of 200 lots to bid on. Each lot may include multiple items of the same kind.
Timing - Sales timing can make or break your industrial auction. For example, if the majority of items up for bid are recreational vehicles, such as motorcycles or ATVs, you may have a hard time getting the highest possible bid if your auction is held in the winter months. Additionally, bidders and auction sales frequenters are hesitant to attend an auction where they will have to stand or wait outdoors in high or low temperatures. Ideally, many auctions are held in the spring or fall months. You will want to plan your auction carefully around other auctions and sales taking place in the area. Having a date or time conflict with another auction, especially if the auction is in the same industry and carries more and/or better inventory, may severely hurt the attendance of your auction and impact the results of your bids.
Expectations - Develop a clear understanding of what you expect out of the auction going in. Be realistic with your perceived goals and remain flexible. Understand that, while some of the items up for bid may be auctioned off at a higher price, many others may not fare as well.
Staff time and training - Keep in mind the time and effort involved with creating and keeping listings up to date ahead of the auction, as well as the time and expense necessary to train your sales staff that will be involved with the auction. You will also need to train staff to encourage bidders to pre-register in the days building up to the auction.
Expense - While the auction itself should bring in enough to cover expenses, you most likely want to make a substantial profit. Weigh expenses against your perceived estimated income before deciding if an industrial on-site auction is the best way to sell your inventory. Typically an equipment is sold 1/10 to 2/10 of its retail price at an auction.
Plan a Budget
One of the very first things you should consider when setting up an on-site industrial auction is your budget. Run some numbers and make sure the auction will be profitable before proceeding. Your primary expenses will likely include the cost of a professional auctioneer and auction service, advertising, and printing of programs and catalogs.
If you want to bring in a little extra income, you might consider charging admission to the auction, or selling ad space in your catalog. In addition to the profits from the euipmment auctioned off, these little extras could make for an even more successful on-site auction.
In addition to having a large and quality inventory for your auction, it is also important to attract as many bidders as possible. A good portion of your budget should be put towards to promoting your auction. Things such as press releases, targeted email marketing campaigns, PPC campaigns such as Google Adwords, and reaching out to previous customers or current prospects are all common marketing strategies executed by auctioneers.
Procure a Professional Auctioneer Service
Once you have examined your budget and decided an industrial auction is the best way to go, you need to procure a professional auctioneer service. Some may elect to skip this step and handle the auction entirely on their own. This may be a practical solution if you have prior experience in planning and hosting an on-site industrial auction, though your best bet is to leave it to the professionals. While this will likely take up the largest portion of your budget, a quality auctioneer and team will not only take care of the details and make sure everything runs smoothly, they will also be able to get you the biggest bang for your buck. A skilled, professional auctioneer knows how to work a crowd by properly pacing the bidding, inspiring enthusiasm from the audience, and successfully dealing with lulls in the bidding. While an auctioneer will cost you a tidy chunk of your budget, rest assured they will work to get the absolute highest bids possible on your euipmment.
Hiring an Auction Company
Thousands of auctioneers offer services throughout the country, so what should you look for when hiring an auction firm? This is the most important step in setting up and hosting an on-site industrial auction, so you want to be certain you have hired exactly the right auctioneer service for the job.
Look for an auctioneer who specializes in auctioning off the type of euipmment or property you have to sell. All professional auctioneers have specialties, and they often have more than one area they excel at.
You should also look at the experience of the auctioneer and the auction firm before deciding to hire them. How long have they been in business? Do they have a reputation? If they have a web site, take a look at it. Get references from past customers who have used their services.
One other thing you should look for is if the auctioneer is a member of the National Auctioneers Association. The NAA is a professional association for auctioneers that offers continuing education that allows auctioneers to stay up-to-date on the latest technology and trends in the auction industry. All NAA members abide by a code of ethics that ensures fair business practices and high standards of customer service. Most professional auctioneers will display this logo on web sites, business cards, signs, and other business documents.
Following are a few things you should ask about when you meet with the auction company:
- Ask about marketing procedures. The success of your auction depends a great deal on the amount of effort that is put into advertising.
- Carefully look over the firm's contract or written proposal and get details about all that is involved.
- Find out how setup and cleanup will be handled.
- If you haven't already checked for references on your own, ask the company to provide references and follow up on them.
Before entering a contractual agreement with an auction firm, invite them to visit your facility and answer any questions you may have. Find out exactly how they intend to proceed with the auction, marketing, and other aspects of the event. Make sure you have a clear understanding of costs and how things will be handled before signing a contract.
Selecting the Auction Date
Once you have hired an auction service, a Project Manager will be assigned to your auction. You will then work with the Project Manager to develop a plan of action, set realistic goals, and decide on a date. Keep in mind various factors such as weather, time constraints and dates of similar auctions in the area that may conflict with yours. It is always a good idea to establish a second, alternate date for the auction if something should arise that requires rescheduling.
By this point, a plan of action has been set in place and things are starting to come together. It is now time to prepare your site for the auction. The first step involved with site preparation is referred to as cataloging. During this process, each piece of euipmment to be included in your auction will be cleaned, sorted, and prominently displayed. Any tools, spare parts, maintenance records, manuals, or other documents associated with a particular item will also be prominently displayed to give bidders a complete view and possibly enhance the value of the item. Once the cataloging has been complete, lot numbers are assigned to each item available for sale.
Group your lots. If you are hosting an industrial auction auctioning off pumps, valves, and motors, you should group these lots together so that your bidders will know, for example, lots 1 to 100 are motors, lots 101 to 200 are valves, and lots 201 and above are pumps. Some bidders will not have the time to sit through your auction from start to finish. Giving them the flexibility to choose when (approximately) to attend throughout the day will definitely encourage attendance.
Make your selections interesting. If you are selling industrial pumps, there may be bidders who are looking for individual pumps and those who are looking for bulk and assorted pumps. Usually high priced equipment are often auctioned off as single lots, and less expensive equipment are often auctioned off in bulk. For example, you may want to auction off a $10,000 pump as a single lot, and combine 20x $100 pumps into one lot of "assorted pumps".
Other areas that should be designated and prepared for the auction include:
- Entrances and Exits
- Asset Location
- Advance Deposit area
Highly visible signs should be posted throughout the facility to accurately direct people to these areas. At this point, you should also arrange for local riggers to be in attendance to assist buyers in loading their purchases after the auction.
Your Project Manager will work closely with your on-site representatives to develop a plan for promotion. This should include things like signs, advertisements in newspapers and trade journals, flyers, and eye-catching brochures to be delivered to potential buyers at least two weeks prior to the auction. These brochures should provide relevant and detailed information about industrial equipment or other euipmment available at the auction as well as quality photographs. The brochures should also include directions to the auction site and local hotels and lodging for possible bidders who travel longer distances. Online promotion of your auction through social media sites and other forms of marketing should also be considered. In short, consider the following:
- Targeted email campaigns promoting your online auction catalog to previous customers and future prospects
- Targeted direct mail campaigns to local businesses and residence around the auction site
- Targeted PPC campaigns such as Google Adwords promoting your online auction catalog to cities and provinces/states around the auction site
- Press release (e.g. Marketwired, PRWeb) promoting the auction event
- Banner advertisements on relevant websites. Advertise on newspapers, magazines, and relevant publications local to the auction site
- Contacting previous customers and future prospects over the phone
A variety of written or printed materials should be prepared for internal use and for the public. The following checklist will help you keep track of which documents to prepare:
- Master list of available lots
- Auction catalog
- Event program
- Bidding instructions
- Bidder paddles
- Recorder sheets
- Pick-up receipt forms
Day of Event Assignments
One of the final preparations before the day of the big event is to assign people to handle specific tasks on auction day. Whether you use volunteers or professionals to carry out these tasks, you should ensure that each person knows exactly what they are supposed to do. In some instances, training sessions may need to be held for more complex roles. Some of the essential job assignments include people for set-up, registration, photographs, checkout, and accounting. You will also want to make sure a cleanup crew is put in place before, during, and after the event.
Experienced auctioneers and auction services know informed buyers are more likely to bid top dollar on equipment and other large machinery. Therefore, it is vital that your buyers are well informed before the day of your auction. Large industrial auctions do well to have an inspection day a couple of days before the auction day. During this inspection, all potential buyers are invited to preview any equipment and other merchandise for sale. On-site teams should be available and prepared to answer any questions, direct buyers to euipmment they are interested in, and provide as much information as possible. Arrangements should also be made with buyers who are unable to attend the main inspection to schedule a private inspection if so desired.
The Big Day
On the day of the auction, bidders must first register. At registration, they must provide proper identification and sign a registration card that states their acceptance of the terms of the sale. Bidders also must turn in any endorsed checks with bank letters of guarantee for safekeeping throughout the auction. After registration has been completed, each bidder is given an auction catalog and assigned a bidder number.
The Terms and Conditions of the auction should be clearly visible to all bidders. They should be listed on registration cards, catalogs, and posted clearly on signs located throughout the facility. The auctioneer should also announce them prior to the beginning of the auction.
You should utilize auction software(s) that will allow you to accept bids online while the on-site auction is running. Although the majority of the revenue will come from the people bidding on-site, having online bidders will certainly not only drive up the bids, but also adds an extra level of dynamics to your auction.
Once the auction is over, each buyer should be provided with an itemized invoice of their purchases and a detailed explanation of payment. Upon receiving their invoice, buyers proceed to check-out. At the check-out area, assistants should be available to supervise the removal of purchases.
Check-out should begin immediately following the auction. Assistants should be available at each area to assist buyers and make sure each invoiced item is properly distributed. Independent riggers who were contacted prior to the auction will likely be on hand to help buyers load their purchases.
Setting up and hosting an on-site Industrial auction can be a lot of work. However, if you hire a professional auctioneer firm and carefully plan out each step, your auction can be a complete success.