Tax Benefits Advantages of Network Marketing and Home Based Business

Starting your own network marketing home based business brings you a million-and-one benefits but the one specific benefit I want to talk about on this blog post are tax benefits since it is tax season.Most all network marketing companies have a monthly auto-delivery program a member has to be on to qualify for all commission bonuses. For example, it is typical that a brand partner of a network marketing company needs to be on a $120 monthly auto-delivery to qualify for all commissions. Guess what? Your monthly auto-delivery of $120 is 100 PERCENT TAX DEDUCTIBLE!We called the IRS to ask them if our monthly auto-delivery is 100% deductible. We spoke with IRS representative Colleen ID #0348881 and below is what the IRS representative said. First she asked several questions about how our business worked:Is purchasing the $120 monthly auto-delivery was a common practice amount for all members? which is “yes”
If it was expected for business builders but not consumers? which is “yes”
If it was helpful to drink the product? which is “yes”
Necessary to get paid? which is “yes”
Appropriate for network marketing industry? which is “yes”Based on the answer and Publication 535 Business expense page 2, the expenses would be ordinary (common and expected) and necessary (helpful and appropriate) in regards to our MLM business model. Which means the $120 purchase qualifies as a business expense.Also if a doctor recommends and supplies you MLM product out of their office, it is a medical expense for a patient. This is in the instruction for Schedule A.Other tax advantages to your home based network marketing business are the obvious expenses you can deduct, such as:A portion of your rent or mortgage – your business has to pay rent and that includes home-based businesses. Some of the amount that you pay each month in rent or mortgage payments can be counted as a business expense.
The cost of your computer
Office equipment and furniture – office desk, office chair, computer, software, telephone, printer, lighting, etc.
Internet connection
Phone bills
Your vacations and company events – This benefit can be huge! You’ll be able to deduct the cost of the plane ticket, hotel expenses, food, entertainment.
Conferences – There is no faster way to super-charge your business than to attend a conference. You’ll get a fantastic business education, get a chance to network and best of all get to write off the expense.
Restaurant meals – Take out members in your down-upline, up-line, or anyone you talk to about your home based business and the meal is on the IRS.
Groceries – Your home office needs some food for visitors. It is unlikely you will get away with your entire grocery bill but food you consume for home events and visitors is a legitimate deduction.
Some car expensesIn conclusion, it is hard to put a positive spin on paying taxes. It always hurts but we all have to do it. The good news is that by joining any network marketing company there are tax deductions that you would not have been able to deduct if you did not have a home based business.Always consult with a tax professional. We cannot provide any warranty about the information above.

Do You Know How to Find the Most Successful Home-Based Businesses?

Do you want to know how to find the most successful home-based businesses? There are three main things you need to think about in order to find the most successful home-based business opportunities. The first is to make sure you can afford the business. The second is to make sure you have help. Finally, make sure you pick a business that really has potential for you to make money and isn’t all hype.Make sure your business is an affordable one to operate. Know how much you are willing to spend on a business and how much you will have to spend on a monthly basis to run that business. Don’t spend everything you have to invest on just the business alone. Make sure you have enough money to run your business on a day-to-day basis. For instance, what sense would it make to buy a McDonalds and not have enough money to buy the burgers? When it comes to owning your own business you have to make sure you have enough money to operate it efficiently. Be careful of free or extremely low-cost home-based businesses that promise you will make millions. Lets be real, the old saying you have to spend money to make money is pretty accurate. That doesn’t mean you have to break the bank by any means, but thinking you can start a legit business for next to nothing is unrealistic.Make sure you have access to reliable and experienced people who can help you with suggestions and any problems you encounter. One of the scariest things about opening your own business is that you are the boss. You are the one everyone looks to for answers, and if you don’t have the answer who will? Who will train you how to run your business? Make sure you have some kind of support group or someone who has experience in the industry that will be there for you when you need help. Make sure you have at least two contact people or groups that you can contact by phone preferably or email if it isn’t urgent. This is especially important when you first get started with your own home-based business.Make sure you are in an industry that will allow you to make the kind of income you are looking for. Lets face it no one opens a business just for fun, the goal is to make money. Pick a home-based business that has the potential to pay you very well for all your hard work. It doesn’t make sense to buy a home-based business that will put you in debt hundreds of thousands of dollars to make fifty thousand a year. Also, when you buy a home-based business make sure it is something that you will enjoy. When you are in the home-based business industry you have to be a self-motivator and it is easier to do your job when you work from home if it is something you enjoy doing.These are the 3 main things to consider before you choose to invest in a home-based businesses. Make sure you consider all the costs associated with running the business. Find a business that comes with a help line or support group. Pick a business that you will enjoy and has the potential to make a large income. Follow these three simple guidelines and you will be on your way to a successful home-based business.

Small Business Is Hard Enough: The Challenges of a Small Business After a Disaster

Disasters, I know we all hate that word. As humans we gird ourselves and simply say, “It won’t happen to me”. But the data shows that it’s not if it’s going to happen, it’s when is it going to happen.According to the Small Business Administration (SBA), 40% to 60% of small businesses fail following a major disaster. The number of presidentially declared disasters has more than doubled in recent years. However, many disasters don’t affect a large number of people like these declared events do. In fact, fire is the leading business disaster.If that is not bad enough, researchers estimate that approximately: half of business do not survive their first 5 years and 8 out of 10 fail within the first 3 years after a disaster.*Small Businesses have unique challenges that are quite different from their larger counterpart. Since 52 % of businesses are operated from the owner’s home or property their ability to recover is harder simply because they have to focus to two recovery efforts. There is never enough time to get them both done quickly and easily. If their business is in their home, there is no place for the work to continue. The property damage for a small business owner impacts BOTH the family and their business.While owning a small business may seem like the American Dream, owning a small business has many challenges. But after a disaster the challenges become more profound. There seems to be recurring views of these owners both before and after the disaster.Here are 7 challenges Small Business Owners face after a disaster:1. Illusion of Security2. Nothing could be done to protect against this3. Complete 360-degree disaster for the individual4. Self-imposed limits5. Imprudent use of financial resources6. Not understanding what is happening to their customer base7. Assumption everything will get back to normalStarting a business is a big achievement for many entrepreneurs, but maintaining one is the larger challenge. There are many standard challenges that face every business whether they are large or small. The largest challenge for small business owner is planning.Small business owners invest a tremendous amount of time, money and resources to make their ventures successful, yet, many owners fail to properly plan and prepare for disaster situations. You can protect your business by identifying the risks associated with natural and man-made disasters, and by creating a plan for action should a disaster strike. By keeping those plans updated, you can help ensure the survival of your business.When disaster strikes, having a plan and being able to put it into immediate action can mean the difference between staying open to service the needs of your customers and community or shutting down for a few days.I know, not another plan! Who has time for that?Resilience is different from preparedness. Where preparedness is something that you do; resilience is something that you become. In becoming more resilient, you as the owner should take intentional action. Do one thing today. (Just one thing). Do you back up your data? No, then get that done. Do you have an emergency contact list for your employees, suppliers, major clients? No, then get that done. Do you review you insurance policy every year with your agent? No, then get that done. Little by little, doing one thing moves you closer.You’ve finally achieved your dream. Don’t lose it to a power outage, hacker disruption, fire, earthquake or other disaster. If you’re not prepared, a disaster could put you and your employees at risk, possibly shutting down your business forever.

Home-Based Business Ideas – Think Big, Act and Grow Rich with Unique Business Ideas

We have all seen the inviting headlines: “Home-based Business Ideas That Can Make You Millions”; “The Hottest Home-Based Business Ideas to Use Now!”; “Launch a Successful Home-Based Business with These 10 Can’t-Miss Business Ideas.” The list of such headlines is endless, followed by articles that galvanize the reader’s interest in starting his/her own enterprise with visions of “happily ever after” outcomes.

But the first idea that I must present is that envisioning and dreaming about a home-based business is only a prerequisite towards successful entrepreneurship. Constructive action must follow any home-based business idea!

There exist so many entrepreneurial wannabees who remain in a constant state of immobilization. Such individuals often possess intelligence and creativity, even thinking outside of the box, but remain entrapped in the idea that they cannot pursue a home-based venture due to time or financial constraints. Others feel powerless to take action because they don’t know where to start. Indeed, they are uncertain as to what steps to take, going from inspiration and cognition to actual business production. Still, other aspiring entrepreneurs must confront self-imposed limitations, believing that they are incapable, incompetent souls who are not deserving of acquiring good fortune. Fear often predominates their collective mindset as there is much trepidation that the outcome of any home-based business idea will be an unfavorable one.

Regardless of the reason, refuse to remain in a state of immobilization. If you have an idea for a home-based business, go forward with it! Of course, any idea for a business venture must be thoroughly researched and evaluated. One needs to consider the competition, costs, labor and time involved, the methods and procedures of the given business, potential return on investment and a host of other issues. The importance of business preparation cannot be underestimated. However, if you determine that the idea is viable and has merit after engaging in exhaustive research (even calling upon experts for advice), you owe it to yourself to implement it.

But many people who want to quit their jobs and discover their ideal home-based business may not have a concrete idea as to the type of enterprise to launch. Others may possess a few simmering thoughts as to which direction to go but the primary idea that resides in the cyberspace of their minds is that they are just desperate to work at home!

In order for a particular home-based business idea to germinate, perhaps one must first explore one’s own interests. Is it possible for an avocation to become a vocation? If you are passionate about creating jewelry, for example, that may be the underpinning of a home-based startup jewelry business. If you are a photography aficionado, photography may be the means to gain self-employment.

Successful Internet marketers always trumpet the importance of finding a niche. Your interest may uncover a niche that proves profitable. If you can tailor your hobby and interest to meet the needs and demands of a particular market, you can quickly prosper.

Local markets can even be tapped to develop a money-making enterprise. Consider a home-based entrepreneur who creates a free community newsletter, receiving advertising dollars. Another may find it more creative and profitable to sell a map of the local establishments, designed on a placemat presented by a given restaurant. The businesses listed on the map pay to be highlighted. Think about those who have created local surveys and reviews (comparing restaurants, hotels, etc.) and selling the resource at bookstores. The jeweler and photography, in our example above, may create work that reflects local influences, and thereby, gains local popularity. For example, I have a friend who resides in Alaska who is a sculptor and photographer. He has an inherent love of nature and outdoors, and captures the Alaskan wilderness and myriad forms of wildlife in his work. His creations subsequently capture the attention and dollars of his fellow Alaskan residents.

Obviously, an interest or passion in a particular field should be accompanied by a certain amount of competence or skill. It is difficult, for instance, to become a successful artist if one does not know how to draw. Proficiency need not be inherent; it can be developed. But one should have a firm grasp of one’s abilities, talents and, don’t minimize it – potential. As Carol Brady, celebrated TV mother of the Brady Bunch series once wisely declared, “Find out what you do best and do your best with it.”

(When developing an entrepreneurial mindset — when you are trying to create and define your home-based business ideas — be open to all resources, including popular cultural influences such as television programs and movies. Indeed, as actress Melanie Griffith said in her role as Tess McGill in the movie, “Working Girl”: “You never know where the big ideas will come from.”)

While exploring your interests and aptitudes, as you are open to a plethora of possibilities and opportunities, think about the prevailing winds of societal needs that change from time to time. Are there any national or local trends that you observe? Are there any growing markets? What are some fundamental needs that can be satisfied on a local and/or national level.

Unfortunately, for example, consumer debt continues to skyrocket in the United States. Millions of Americans owe more money than they make. So many people merely pay the interest portion, not the principal, of their credit card bills and find it increasingly difficult to pay crucial bills, such as a home mortgage. Any real estate agent can attest to the steady and scary upward climb in the rates of foreclosures. Opportunistic companies are responding to this alarming trend. Home-based businesses relating to the burgeoning consumer debt are proportionately increasing, specializing in credit counseling, debt consolidation and even collection.

Consider another trend: While we continue to become more health and fitness-conscious, the rate of obesity remains on an upswing. Certain home-based businesses cater to each demographic and some to both. A self-employed fitness trainer primarily taps into our collective interest to get into better shape. A purveyor of weight loss products gains from our national obsession to lose weight. Those who are designing programs that incorporate an exercise regime with a recommended protocol of dietary modifications may prove to be doubly fortunate.

So keep your finger on the pulse of “hot markets” and you may warm up to a very profitable undertaking. But don’t be afraid that your home-based business idea is too common, especially if it relates to tried and true home-based businesses. You may have an idea to add a twist to any business and deliver your own brand of special service.

Among the most frequently touted best home-based businesses include computer repair, childcare, coaching (life coach or Internet business coach) and tutoring, distributing and selling tangible goods or information-related services, interior decorating, photography, transcription services, dealing antiques and collectibles, handicrafts, baking, sewing and gardening and farming. The list is not exhaustive but presents fields that have proven profitable for the home-based business owner.

Many home-based business entrepreneurs decide not to walk or run on the conventional path. Their home-based business ideas are unique. Look at this creative entrepreneurial venture: Providing surf reports to those who want to “hang 10.” The owners of this business are hanging a lot more zeros when it comes to their bottom line. Another company profits from the absent-minded by offering a “reminder service,” reminding clients about special dates or occasions several days in advance. Many home-based business owners make a living by providing specialized instruction: Stop smoking groups, public speaking courses, women’s empowerment seminars are all variations on the theme of providing direct instruction. Maybe I should start a tutorial center on viable home-based business opportunities … but then again, this field is already saturated.

Even absurd home-based business ideas can take off, leading to early retirement for the home-based business owner. The Pet Rock, Designer Dirt, deeds to land that once belonged to famous people (e.g, Abraham Lincoln, Elvis Presley) have all contributed nicely to the financial coffers of their creators. Certain television programs love to highlight the offbeat, out-of the-box home-based business owner who has a unique idea. Think of something unusual and you will get massive publicity, especially if it involves a celebrity. I’m sure there are entrepreneurs right now, for example, who are getting a fat wallet on the coattails of Paris Hilton with their “Free Paris” t-shirts, bumper stickers, buttons and posters. They can even cater to the “Anti-Paris” community with their “Don’t Free Paris” paraphernalia.

In conclusion, it is crucial to act on the idea of pursuing a home-based business venture. Do the required research and preparation and consider your talents, abilities and potential. Think about any trends in business or growing markets that you can use to your advantage. Learn about businesses that have proven to be profitable for other home-based business owners. And do not, under any circumstances, be afraid or hesitant to think outside the box. In our culture, a crazy idea can very well lead to crazy money.

Advertising: Do You Know How Important It Is to the Success of Your Online Business?

Advertising can be defined as the process of making your products or services known to the people. Advertising can go a long way to contributes to your online business when done correctly. There are various ways of advertising you can use to make your products or services known to a large numbers of people. Before I give you the various ways, let me ask you some questions: Do you believe that advertising can work for you? Do you believe you can allot the time for adverting your products or services? If you answer yes to the questions above, then this article is for you. Back to our main discussion, some of the various ways you can use to advertise your products are:

1) Face-to-Face Advertisement: This is the type of advertisement that requires face-to-face contact with the person you are advertising to. This method is very effective for any types of products you want to sell. It has its merits and its demerits. Some of its merits are not limited to high power of persuasion, generation of more sales while its demerits are not limited to time factor, stress. This method of advertisement is suitable for products that have high prices.

2) Newspaper Advertisement: Newspaper advertisement is the type of advertisement that is placed in a newspaper in order to create a wider awareness of the products and services that are being promoted. Newspaper advertisement can too costly especially for a newbie and someone with little capital at hand. But it has proven to be very effective over the years and it still maintains the standard.

3) Media Advertisement: Media advertisement is the type of advertisement that passes information to the consumers on why they should purchase a particular product or service. The information can be disseminated from the radio, television. One of the merits is that it can reach a wide location. One of the demerits is that it does not target a particular group of consumer.

4) Online Advertisement: This is the process of advertising your products and services on the internet. In the present days when most businesses are relocating to the cyberspace, most product buyers prefers to purchase online. Some of the reason for wanting to purchase online is that it is safer; it does not requires physical presence of the buyers before the products can be purchased, it is faster, and it is less expensive. There are many places you can advertise online. Some of the places are online forums, social networking sites, and blogs. As at today, online advertisement is the best of all the different types of advertisement we have. Out of all the various forms of advertisement mention above, you should be able to choose one that fits your products or services.

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.

Five Tips for Selling at Live Auctions

Ah, the old-fashioned country auction! The idea of a country auction conjures up certain images for people. The image of a fast-talking auctioneer offering up an antique table or chair is a popular example.

People who are buying household goods or collectibles are looking to get their items at the lowest price possible. However, the people who are selling their items at auction are hoping for the highest price!

Unless a person is in the business of buying and selling antiques or other items, not a lot of thought goes into how goods are prepared for sale via the auction process. However, if you are one of the growing number of people using auction venues to sell your collectibles or other inventory, there are a few things to learn first about how to sell at auction before you bring a truckload of stuff over to the next event.

Tip 1: Make sure the things you want to sell are a good “fit” for the auction house you’ll be using.

Never bring a load to an auction house without actually having been to one of the previous auctions. It’s important to get a feel for the type of goods that the house sells. For example, at one very rural country auction it was common for the owners to sell live chickens, pots and pans, car parts, and farm equipment.

After close investigation, this would not be the right venue for selling your daughter’s “Hello Kitty” collection. On the other hand, the spare John Deere parts that you bought at last week’s yard sale might be just the right thing for the buying crowd at this auction.

Tip 2: Be sure you clearly understand the terms and policies of the auction house.

Visit with the auctioneer ahead of time. Call to find out what the best days and times are to visit. One of the worst possible times to drop in for an informational visit with an auctioneer is the day of the auction. Call ahead and ask. While you’re at it, find out what are the best days and times to drop your stuff off.

Once you have a little time with the auctioneer, you’ll be able to find out what type of commission he or she takes from consigners (which is you), and what type of paperwork might be needed. Some auction houses send out Form 1099 tax forms at the end of the year. An auctioneer may need to see your identification and have you fill out a W-9. Be prepared.

Find out what happens to your items if they don’t sell. For example, some auctioneers may have a minimum starting bid. If, for some reason, one of your items does not sell, it may be grouped with another one of your pieces. Know the auctioneer’s strategy beforehand so that you aren’t surprised on pay day.

Tip 3: Make sure the auctioneer knows what you’re selling.

It might be perfectly obvious to you that the signed print you are consigning is a rare and valuable piece of art. However, the auctioneer may not know this particular artist. Make a note of anything particularly special about your items, and leave the note with the piece. Be sure to tell the auctioneer about it as well. He or she might determine that this is something to highlight on the company website or in the newspaper listing.

Tip 4: Present your items neatly.

No one likes to have to dig through a box full of grimy and greasy car parts to see what treasures might be in there. Separate the parts and lay them out on a flat, or use more than one box to de-clutter the lot.

There is no need to buy fancy display boxes. It’s easy enough to go to the local convenience store or supermarket and ask if you can have the emptied boxes or flats that they are discarding.

While it’s good to present clean items, take care not to ruin the value of anything by over cleaning. For example, if you find some old cast iron cookware, clean the obvious dirt and grime, but don’t scrub it to its original finish. For many people, this ruins the value of the item. So, clean and tidy and organized is the key here.

Tip 5: Don’t complain to the auctioneer if your stuff doesn’t sell for as much as you’d like.

The phrase to remember here is, “You win some; you lose some.” That’s just the way it is. There are some days where an auction house is loaded with people who all seem to want what you’re selling. There will be other days where the crowd is sparse, and the bidding is simply not competitive.

Remember that it’s in the auctioneer’s best interest to sell your things for the highest possible hammer price. But sometimes, it’s just not going to be a stellar sale. The auctioneer is only human, and is also disappointed if a sale doesn’t go as well as planned.

If you notice that every time you bring a bunch of goods to sell that you’re not realizing as much as you think you honestly should, try another auction venue and compare apples to apples. That is, bring the same types of items to the new auctioneer and compare the results.

Unless the auctioneer is particularly disagreeable or inconsiderate to you or buyers, there is no reason to confront him or her about a sale. If you find you just don’t care for an auctioneer’s style or methods, find another one. Believe me, there are plenty of them out there!

The primary thing to remember as you learn how to sell at auction is that the business is unpredictable at best. You will have good days, some not-so-good days, some great days. The more you sell, the more experience you will gain, and the more enjoyable the business will be.

Real Estate Auctions – The New Land Rush

On a sunny afternoon in Florida, an energetic crowd gathers on the lawn of a high end luxury estate. A loud and eager banter between an auctioneer, a group of bidders and bidder assistants fills the air. For several minutes the auctioneer asks for the next highest bid and the bidders respond. Suddenly the bidders grow silent. The high bidder holds his breath in anticipation of winning the auction. The auctioneer calls for one more bid. In a loud clear voice which rolls over the audience he says, “Fair warning, last chance” the auctioneer pauses, “SOLD!” And in less than 10 minutes another multimillion dollar estate has changed owners.

Successful real estate auctions like the one above are happening all over North America and the Caribbean. Recently real estate auctions have been on the rise, the increase in popularity is partly driven by growing inventories and fading buyer confidence. Properties that were selling in weeks using traditional methods are now languishing on the market unable to attract buyers even as seller’s lower prices. Many say the real estate boom is over but savvy buyers and sellers are profiting from real estate auctions.

Real Estate Auctions Work in Up or Down Markets.

Regardless of trends or market cycles, real estate auctions provide an open and transparent process for buyers and sellers. Properly conducted real estate auctions attract ready and willing buyers and motivate them to act now.

The auction method removes the “wait and see” attitude which serves to further depress real estate values. Buyers are always concerned about overpaying. Buyers gain confidence with their purchases at real estate auctions because they can see what others are willing to pay.

When market demand is high and inventories low, real estate auctions can deliver selling prices well above what a willing seller would have accepted in a negotiated private treaty sale. In good selling climates many property owners using traditional real estate methods; negotiating with one buyer at a time, leave thousands of dollars of equity on the table. During up markets real estate auctions are the best way to establish top market price.

Evaluating Your Real Estate for Auction

Not every property or seller for that matter makes a good candidate for auction. First of all sellers must be ready to sell now and for the current market value. Also a real estate auction will not fix problems caused by a downturn in market value of your property, if you owe more than a willing buyer will pay, be prepared to come to closing with your check book.

Properties that do well in real estate auctions have a high uniqueness factor. Ask your self, “What makes my property different from most others?” Maybe you own a resort property or high end luxury home, commercial properties and land do very well at auction. Real estate auctions thrive on uniqueness. If your property is like everyone else’s, the best thing you can do is offer the most competitive price.

Most importantly sellers must be reasonable about setting a minimum bid. A seller must look at the lowest, most current comps and price below that to generate the interest and urgency necessary for a successful real estate auction. Once the auction begins and qualified bidders start competing against one another you can watch the selling price increase.

Locate a Qualified Real Estate Auctioneer

Start by checking with the National Auctioneers Association, the best real estate auctioneers belong to this organization. These real estate auctioneers are well trained and adhere to a standard of practice and a code of ethics. Many attend the annual International Auctioneers Conference where the latest techniques and innovations in the real estate auction industry are presented.

Find out if the company you are interviewing is a full time real estate auction firm. Many real estate agents are getting auction licenses yet have no experience with the auction method of marketing. Conducting a successful real estate auction is nothing like (private treaty) traditional real estate sales. Go with a real estate auction pro.

You’re probably better of with an auction house that specializes in real estate auctions. There are many qualified auctioneers who have generations of experience selling personal property; furniture, dishes, lawn equipment and the occasional rare painting. Selling real estate at auction is a complex matter that should only be attempted by full time experienced real estate auction professionals.

Commissions and fees may vary, sellers must pay all marketing expenses up front and buyers typically pay 10% of the sales price to the auctioneer of which a share goes to participating real estate agents.

Types of Real Estate Auctions

Auctions are effective because they create a seller’s market. Professionally conducted real estate auctions create urgency, a reason to buy today and competition for the property. Terms and conditions of sale are established ahead of the auction. Real estate auctions will follow one of these three approaches:

Absolute Auction

The property is sold to the highest bidder regardless of price- using this process often returns the highest sale price.

Minimum Bid Auction

Seller agrees to sell at or above a published minimum bid price – this method is useful for internet auctions.

Seller Confirmation or Reserve Auction

With a reserve auction, the seller “reserves” the right to accept or decline any bids usually within 48 hours of the auction. Reserve auctions are used when there is a lien on the property from a lender or a court ordered sale with a minimum selling price.