Why Auctions Work

The Benefits of Auction Marketing

Today, more than ever before, auctions are providing results for buyers and sellers. Online sales methods have created a buzz around the word “auction”. When trainers have a champion thoroughbred horse, they sell it at auction. The finest art in the world is sold at auction. Classic automobiles sell at auction. Real Estate is the fastest growing segment of the auction method. Auctions are transparent, and buyers and sellers like that among other benefits of buying and selling at auction.

Auctions provide a definitive time and date for your asset sale. A carefully planned accelerated marketing program gives your property high exposure. You can stop costs of maintenance, vandalism, insurance, utilities, mortgage payments and other costs of ownership. Auctions are an excellent way to convert assets to cash in a short time period. Competitive bidding determines the best price for your properties. The perception of value of equipment and other assets and  reality are not always the same. Reality says your assets are not worth a dime more than a person will pay and has the ability to pay for it.

On the lawn or online, auctions are taking place in communities large and small across the country with more than a quarter trillion dollars in assets and goods being sold via auction every year. One of history’s oldest forms of commerce, dating back as far as 500 B.C, auctions continue to be the most efficient and effective means of price discovery. That said, auctions continue to be plagued with misconceptions and misunderstanding in today’s marketplace. We’ve heard it before from naysayers who say, “selling at auction is selling at a discount.” We’ve also heard the rumors that auctions only exist for selling distressed property. As unfortunate and frustrating as these rumors are, what frustrates our proud profession the most is that nobody questions the market value attained when rare, priceless works of art are sold for millions of dollars at auction like sculpture Alberto Giacometti’s “L’Homme qui Marche I” which sold for $104.3 million. Nobody doubts the values brought when Cher’s private home is sold at auction, or questions the method when the home of former U.S. presidential candidate, Senator John McCain’s is sold by an auctioneer. Nobody critiqued the prices attained when Michael Jackson’s personal affects were sold at auction. Nobody challenges the value of their shares in Wal-Mart at the end of the day on Wall Street. However, mention selling everyday real estate, commercial assets and other assets via the competitive bidding of an auction and doubt and uncertainty immediately follows.

Auctions work: Good market or bad market

The auction method of marketing is the world’s oldest and most misunderstood method of selling assets. The process is straight forward, but perception clouds reality many times. An auction is simply a marketplace where assets or goods are sold via competitive bidding with the highest bid winning the rights to own. Auctions are the purest and quickest form of price discovery. At an auction, the marketplace (consumers), tell you how much they believe an asset is worth and how much they are willing to pay through incremental bidding. No more. No less. Yes, auctions are used to dispose of distressed assets, but people fail to recognize or admit that these assets are sold via auction because other options have not met the needs of the clients or provide the speed and efficiency needed to complete the transaction. Most importantly auctions force buyers to be decisive because there is no “I’ll buy it tomorrow factor”, the “For Sale” sign languishing in the yard does not force or motivate buyers to purchase, especially in today’s marketplace. The sign will be there tomorrow and most likely the day after that. With an auction, there won’t be a sign after Auction Day in most cases. 

We don’t just talk fast, we act fast

Auctioneers are problem solvers, not just fast talkers. Auctioneers take pride in helping their clients find solutions. Auctioneers are strategic asset disposition experts. At the mere mention of auction, people hear the rhythmic cadence of an auctioneer’s trademark bid call. Contrary to public perception, talking fast isn’t our specialty. Professional auctioneers are marketing specialists who use product knowledge, technology and advanced advertising to promote the assets they are charged with selling. Experts in the psychology of selling, auctioneers have the tools and knowledge needed to create a portal for buyers and sellers to connect. The public perception of auctioneers is that “all they do is talk fast”, but the reality is that the auctioneer spends one percent of their time captivating their audience with their famous chant and 99 percent of their time marketing, building, managing the auction for their clients.

I won it at an auction

No other form of commerce or sales method today leaves customers walking away delighted that they’ve won something they have wanted. You didn’t win that sweater or compete for that flat screen TV at the department store. You paid for it. Only at an auction will you walk away invigorated and excited that you “won” the item for which you were searching. How you actually paid for it is of little significance because at the end of the day you won the battle and that newfound treasure is yours.

Auctions create ACTION

Many people fail to realize that auctions take place in a variety of forms and for a variety of reasons. Hundreds of auctions take place every day that don’t involve distressed assets or involve owners who are in financial trouble. Auctioneers are called upon by seniors wishing to downsize their estate and to begin the next chapter in their lives. No immediate need for cash, just results and assistance. Auctioneers come to the aid of the business owner who wishes to move on to a new aspiration but fails to have the means or expertise to attain the highest price for their business and assets. While one door closes, another opens and sitting in the crowd at that very auction is the entrepreneur with a notebook full of ideas and aspirations. All he needs are the tools and resources to begin his new journey.

The same goes for the auctioneer called to help a farmer sell thousands of dollars of tools and machinery they have accrued over a lifetime in the profession. The auctioneer creates a marketplace for the young farmer in search of the same materials so they can follow in the footsteps of the retiring farmer. Auctioneers provide a platform for the corporate CEO in search of a marketplace to replace used business equipment. At the same time they minimize loss and return the highest dollar value to offset the purchasing of new equipment for their growing business.

Auctioneers provide assistance to the frustrated homeowner wishing to sell her home quickly without waiting weeks and months for the phone to ring with an offer. The homeowner fears what they already know, which is any offer they received will come with a lower offering, followed by drawn-out negotiations and contingencies. Auctioneers provide a portal for the art lover and the artist to connect. Auctioneers bring the “fun” back to fundraising by helping charities across the country increase their donations while providing their supporters with an entertaining and fun-filled experience. Auctioneers create the venue where the collector and the car lover can pursue the next treasure for their collections.

Why negotiate down when you can always negotiate up?

Whether it is luxury, everyday, or distressed assets, the auction method of marketing has worked successfully for hundreds of years. Auctioneers will continue to offer their assistance to buyers and sellers and continue creating a marketplace for them to connect. Auctioneers will continue to assist those in need of our disposition services during these troubled times. We will also wait patiently for the future. For when the marketplace returns to normal and our economy emerges from the Great Recession stronger than before, we’ll be here. We’ll be here when the market shifts from a buyer’s market to a seller’s market. We’ll be here when disposable income and market values increase. We’ll be here when instead of 100 homes languishing on the market with few interested buyers, there will be fewer homes available and hundreds of interested buyers. When this day comes, you wouldn’t dare consider accepting the first offer that comes through the door when there are others who also want to buy your home. Would you? No. You’ll want to sell it at auction.

We want you to know the facts before you so no to auctions. The auction method has been our primary choice of marketing for over 40 years. We get auctions! Today, should you select our firm to conduct your accelerated marketing event, you can rest assured that with our internet bidding capabilities in conjunction with a live auction event, anyone interested in your assets will have a chance to participate in a competitive bidding environment. Just remember, the marketplace will determine what the real price is for your assets. No more. No less. When you are serious about selling, we stand ready to serve you!

To set up a face to face meeting, call us at 336-789-2926.