The right expert can ensure that you get the highest possible dollar return. To choose the right expert, analyze your assets. Then, determine who - an auctioneer, a dealer, a broker - has expertise in each category of assets you want to sell. If you are not sure where to start, ask your banker, lawyer and business associates for recommendations.
When deciding who to hire, obtain several proposals and consider the following:
Reputation
Who has a good reputation in your area? The last thing you want is to hire someone who is
here today and gone tomorrow, possibly with your sale proceeds. A good reputation is also
invaluable when it comes to negotiating with your creditors and attracting people to your sale.
Insurance Coverage and Bonding
Ask for proof of insurance coverage and bonding, or check with your state's licensing
authorities.
Sale Facilities
If it is not possible to hold the sale on your original business site, select a professional
with the facilities that you will need, such as a fenced yard or a warehouse.
Experience
Select a professional who knows how to pre-qualify potential buyers and has the staff to
handle not only the sale, but the presale preparation, inspection, advertising,
record-keeping, removal and clean-up process as well.
Licenses
Be sure that the person you hire has all the licenses required to sell your property.
For example, in order for an auctioneer to sell cars or trucks, most states require them
to have a motor vehicle dealer's license as well as auctioneer's license.
Sale Proposal
Read it carefully, paying special attention to the following:
Estimate of Sale Proceeds: Make sure it's realistic. A high estimate won't look as attractive when you're asked to pay the costs of the sale from your own pocket because the proceeds weren't sufficient to cover them.
Proposed Location of Sale: If the sale can not be held on your business premises, where will it be held and what will you be charged?
Compensation: Compensation is typically based on one of the following methods or a combination of them:
Commission - Usually a percentage of the total gross selling prices. The commission should be set out in a written contract prior to the sale.
Buyers' Premium - Typically a percentage of the accepted bid, usually 10%, added to the price the buyer pays. Be sure to examine any proposal that includes both a commission and a buyer's premium.
Guaranteed Minimum - A specific net return guaranteed by an auctioneer, who either keeps the excess proceeds or divides them according to a negotiated written agreement.
Expenses:
Moving & Storage: Are the costs reasonable?
Labor: Liquidation sales can be labor intensive. Unless you provide the labor, you will probably be charged for sprucing up your assets, organizing and grouping them into lots, setting up for the sale, cashiering, supervising removal of the purchased items, clean-up, and so on.
Advertising: Adequate advertising is key to the success of your sale. Study the advertising plan and budget carefully.
Does it include a direct mailing campaign? If so, what will the brochure look like? Ask to see samples from previous sales. How much will it cost to prepare and print it? What mailing lists will be used? Are they appropriate and how much will they cost? What is the postage budget?
Does it include newspaper advertisements? If so, will they be classified ads or display ads? Will they be placed in newspapers read by the buyers that you want to reach? When will they run and how much will they cost?
Does it include advertisements in trade publications? If so, which ones and when will they appear?
Does it include television or radio advertisements? These can be pricey but effective under the right circumstances. If included, which stations will air them and when?
Contract: If not provided, make certain to request and review a copy of the contract you will be expected to sign. Read it carefully. If you are not comfortable with it, ask your attorney for help.
