Lessons I'm learning from the auction business

Since getting my auctioneer's license earlier this year I have yet to list my first auction.  This is a tough area in which to break into the auction business as we have dozens of auctioneers in a small geographic area.  Despite the large numbers of auctioneers four of them dominate most of the auction business.  Everyone else is left to fight over the remaining auctions that those four do not get.  I've been fortunate to have had the opportunity to work for several of the area auctioneers, including two of the main four, and I've learned a lot about the business that has applications for any small business.

A couple of weeks ago I worked a six hour auction for one of the primary auctioneers in the area.  I could not believe how much came out of a relatively small house that was to be sold that day.  It took six hours of hard selling, at times running two rings, to get everything sold, but at the end of the day both the seller and the buyers were pleased.  We were focused on what we were doing, and we worked hard to make the sale a pleasant experience for everyone, and we succeeded.

Contrast that with another sale I attended a few months ago.  This sale had a number of consignors with one person providing the bulk of the sale items.  The items he brought were also much more highly desirable than most of the other items we sold that night.  At the end he was not pleased with how the sale ran.  He felt too much time was spent selling less desirable items while some of his merchandise was left unsold at the end of the sale.  I would agree with his assessment.  People were allowed to spend too much time describing items with little value which not only meant that there was not time to sell everything, but people became bored and began to leave.  Fewer buyers mean less bids which means less money for everyone.

I attended an auction a few weeks ago that had a lot of desirable items for sale.  I purchased a number of them to resell in my antique and flea market booths.  The sale was conducted by an auctioneer that was engaging and who had a crew that knew what they were doing.  They moved a lot of merchandise that night, and I would think that most people left there feeling good about the sale.

The week before that auction I was asked to auctioneer at an auction house when their regular auctioneer could not make it.  When I arrived I was amazed at the poor quality of the merchandise they were going to sell that night.  Much of it was junk.  A decent crowd showed up for the sale, but few of them were bidding.  It was very hard to get more than a dollar or two for anything we sold.  We could not get a bid on several of the items.  After about an hour the owner of the auction house asked me what I thought we should do.  I responded, "I would shut it down.  Neither you nor anyone else is making any money here tonight."  That's what he did.  I've been told since that they have closed the auction house at least for the remainder of the summer.

What lessons can be learned from these various auctions?  One, regardless of what business you are in, you have to sell quality goods and services.  There are some people attending auctions looking for cheap items they can buy and resell to make a little money on, but even these folks have a threshold they won't cross.  Even junk buyers won't buy some junk!  If you cannot sell quality items or provide a quality service, you will not be successful in any business venture.

A second lesson is that you need quality people in your company.  I know many auctioneers who would have taken two or three sales to sell what we sold in that one six-hour auction.  The reason we could sell that much merchandise is because of the quality of the people that auctioneer has working for him.  I was the least experienced person there that day.  Everyone knew their role and knew what needed to be done.  The difference between satisfied clients and dissatisfied ones is often the quality of the people who work for you.

A third lesson is the importance of having a good reputation.  The best auctioneers attract the best merchandise because they have the reputation of getting top dollar on what they sell.  If someone needs to sell an estate or has good quality items to consign, they will automatically go to the person they believe will get them the most money.  Some auction houses are known as $2.00 auction houses because that seems to be what they sell a lot of merchandise for.  These companies are unlikely to get a lot of quality sales with that type of reputation.  I have decided to not do any more auctions for that last auction house I mentioned even if they do re-open because I don't want to be associated with that type of company.  These are nice, Christian people, but they do not know how to run an auction business, and I don't want to get the reputation of being a $2.00 auctioneer.

The final lesson I'll cover in this post is the importance of being a people person.  Auctioneering, like most business endeavors, is about being good with working with people.  The best auctioneers I've met have been outgoing, friendly, and honest in how they deal with people.  On the other hand, I've seen some who are petty, unfriendly, and less than honest.  Some seem to be very insensitive towards their buyers which I do not understand.  Why would any business person want to alienate the people who want to give you money?

Fortunately, I have a good job that gives me the freedom to break into this business slowly.  I hope I'm learning a lot about the business that will do me well when I do get my first auction.  If you have an estate in southern Indiana or some good quality items you want to consign at auction, get in touch with me.  I do believe you'll be pleased with my service, and you'll be hard pressed to find anyone who will work harder to make your sale a success.

How do you motivate your team members?

I just finished reading The Carrot Principle: How the Best Managers Use Recognition to Engage Their People, Retain Talent, and Accelerate Performance [Updated & Revised] written by Adrian Gostick and Chester Elton.  The book is based on a ten-year study of 200,000 employees and managers in the area of how to best motivate their team members.  The results of their studies found that "the central characteristic of truly effective management - the element that shows up time and again in every great workplace - is a manager's ability to recognize employees' talents and contributions in a purposeful manner."

I think there are three kinds of leaders in the workplace today.  One group does nothing in the area of motivation and recognition.  They believe that the paycheck the employees receive each week is all the motivation they need.  A second group would like to do something in the areas of motivation and recognition but do not know how to go about it.  When they do attempt to do something it is often awkward for everyone involved and usually fails to be very motivational.  The third group is committed to providing a workplace where people's efforts are recognized and rewarded in a way that is motivational to everyone.  What is exciting about this book is that it has something to say to persons in all three groups.

Their study found that effective leaders were seen by their employees are strong in four areas: Goal setting, Communication, Trust, and Accountability.  When recognition is added to these four areas "it serves as an accelerator of employee performance and engagement."  I wished I had understood this better when I owned a small business a few years ago.

I would probably have put me in the second group.  We had good employees, but I did not intentionally recognize their extra efforts as much as I should have, and when I did it was usually somewhat awkward for them and for me.  I was never certain of what kind of recognition was appropriate.  Probably my efforts were more demotivating than they were motivating.  I have no doubt that my leadership would have been much improved if I had read this book when I had the business, and I have no doubt that our company would have been much more productive and profitable if I had properly recognized our employees in ways that would have encouraged them.

If this is an area in which you struggle you really need to read this book.  Near the end of the book you'll find 125 different ways to recognize your team members.  That information alone is worth the price of the book.  You can find out more about it or order it by clicking on the above title.