Posted by comments from a Real Auctioneer on October 08, 1999 at 20:47:45:
In Reply to: Re: Why e-bay is not honorable...arghhhh... posted by Jack Smith on October 08, 1999 at 02:30:39:
First, all states have laws governing auctions. In most of them, an auctioneer must have training, and serve some type of apprenticeship, and may have his license revoked if he doesn't follow the rules. Most of the laws in books govern the relationship an auctioneer has with a client, and not the relationship an auctioneer has with buyers. There is good reason for this. If an auctioneer is incompetent, dishonest, or conspiring, he or she will eventually get the reputation and go out of business. I have known several auctioneers who have made some bad business decisions, and they are no longer auctioneers. They still have licenses, but no clients. It just works out that way. There are 20,000 auctioneers in the US, according to the National Auctioneers Association, and in a given year, they estimate that up to 5% of those cease auctioning activity. The reason, again, is the competition. Finding work is often difficult, especially when starting out. In my first two years, I only had two clients. Very lean years.
Now, for clients. Clients are like the clients in any other profession- most of them have un-realistic expectations, and most of them have little or no idea of how to go about selling all their property. That is why the profession of auctioneer exists (which, by the way, has been in existence since at least Mesopotamia- the code of Hammurabi mentions auctioneering). You are often met with a person who is suddenly responsible for a great amount of personal property, and just is un-capable of dealing with their circumstances, or as in the case of the US Government, consistently large amounts of property, which must be disposed of to comply with laws and operational constraints. So you get shit upon, in almost literal terms. Terrible conditions and demands from clients. That is why you charge them from 5% to 50% of total proceeds for your services. And no help from the client, usually. There are many reasons for this, but I hope I ring a few bells with this- when people get rid of their possessions, this is a landmark event in their life. Think if tomorrow, you find your wife/ father/ son/ daughter has cancer, and need to sell all your Power Wagons to pay for treatment. Of course you'll do it. But aren't you going to get a little spacey about the whole process, maybe scheme to keep one of your trucks, try to delay the process? Okay, now imagine some one with 200,000 beanie babies (true story, not mine fortunately). You have an implied demand from the client to produce the highest value for the beanie babies, but the customer cries every day you are at their home, because they belonged to Maude, who really understood the beanie babies, like no one else. You are sweating your ass off in an un- air conditioned house in Virginia, in August, for a month, with a crying old lady, spend thousands in advertising, and at the last minute, Maude's friend pulls the plug, tells you to get out, and gives the collection to the SPCA, which by the way, has all the cats which you have been smelling for the last month.
Why, you ask, in disbelief? Maude would have wanted it that way...
So clients are tough. Well, buyers are tough, too. First, it takes a while to get smooth just running an auction. I'm still learning. You don't always get to work at the same place, with the same tools, and your buyers are not all the same. Buyers are there to buy cheap. You don't see the local bourgeoisie and nobles there- the proletariat is there, just paid, and have to have the busted pole auger, and they'll do anything to get it, but they are too cheap to pay for it. About 1-2% of your sales will be problem sales. The biggest problem is getting the buyer to remove objects from the property once sold. The next biggest is getting the guy who has bid 2K on junk to remember 3 of the 50 items he bought. They are intentionally forgetful, and will try to get their bill down any way they can. Last, you have to take checks, that's just the way to do business, and there is always one who will bounce it. Most of them will come clean, claiming mistakes, but it almost always comes out of the auctioneer's pocket until it is paid, and is up to you to track down, because your client has been paid already by the time you get around to being paid.
Last, house numbers. There is no way to lie about it, but the auctioneer usually has some one in the audience to bid on items. If you are sharp, you'll pick the number out. If you are more sharp, you'll notice that usually the items are taken back to the clerk. The house number is usually used to bid for absentee bidders, but some use it to run up the monies. Well, I won't do it- I think it's bad business, less than ethical, and if you do your advertising right and run a clean show, you'll get the bids.
But you can't blame a profession for all the problems. It's like blaming prostitutes for promiscuous men. They just bring out the promiscuity, they don't create it. It's true for any employment- some one is paying for your services because THEY CAN'T DO IT. Buying and selling in a free market will always be vicious- you just get to see it readily in an auction. If you feel like it's not for you, then stay away. But you will be missing bargains. I guarantee it.
If you have a large amount of property, and have to get rid of it fast, and don't have the time or resources to do it, you NEED an auctioneer. No two ways about it. Alternately, you need ebay. I really think ebay is going to put a real hurt on auctioneers. I don't think it is a problem for me. But for lots of others, it's bad. And it's good for the seller. Total control of the sale, and your commission is always less than 7%, which beats all auctioneers hands down.
Just my two bits worth, but do I hear three, three, three, threeeeeeee, four and a DOLLAR BILL.....