Many auctioneers show themselves to be determined salespeople with a never-say-die attitude about their efforts to just keep knocking, knocking, knocking at bidders’ “doors” in an unfailing effort to move the bid ever higher and capture the last dollar that an auction crowd might offer. The sad truth, however, is that appearance can be deceiving and many of these auctioneers are shrinking violets - at least when it comes to dealing with sellers - and especially a very important category of sellers. I will explain.

This column is about “the gold” business to be had in auctioneering. One of the earliest lessons that a student learns in auctioneering school is there are two prime sources of business every auctioneer should work to break into and cultivate - banks and lawyers. These sellers have a lot of good auction business to place and it is usually high quality. So why would these sellers intimidate many auctioneers? There are several reasons.

I have observed in auctioneers, and even heard a few acknowledge, that they are intimidated by both banks and lawyers. Apparently some of this feeling is attributable to “class” distinctions that some auctioneers see with these sellers who they view as being well educated and able businesspeople, with prestigious positions and financial success. That is an auctioneer selling himself short, however.

Professional auctioneers are experts and successful at what they do, too, and they have no reason to ever feel inadequate when in the company of other businesspeople. Consequently, I do not believe that a perception of class distinction really explains why auctioneers are sometimes intimidated by bankers and lawyers. Indeed, I do not believe that auctioneers are intimidated by these sellers nearly as much as they are intimidated by the feelings that bankers and lawyers arouse in them. I am referring to the fear that auctioneers feel that they will not get the business that a banker or lawyer has and, instead, the business will go to a competitor.

Auctioneers’ lust for this “gold” business is heightened in accordance with the quality and quantity of the business to be gained. The business that bankers and lawyers have is the type from which auctioneers can expect to make sales and earn commissions, so this makes it high quality. What is more, unlike with private sellers of goods, auctioneers often say that with these commercial sellers, “no one ends up crying.” That means soft selling prices will not be an issue with the banker or lawyer as such a result might be with many individual sellers.

 The almost universal sales response among auctioneers with bankers and lawyers is to start rolling back the amount of the selling commission in an effort to appease the prospect and get the business. This is the wrong approach with sophisticated, commercial sellers such as these. Instead, it is important to recognize that these sellers call auctioneers for two reasons. Here they are.
First, auctioneers offer these sellers the ability to market assets to be sold by public auction. An auction is not only a fast and proven way to liquidate assets of every type, this method of sale has long been recognized by both the statutory law and the courts as being commercially reasonable when properly executed. This point is extremely important to both bankers and lawyers, who often must answer to overseers to explain what they did, why they did it, and whether that course was proper and reasonable. A well-advertised and run auction fills the bill nicely.

Second, bankers and lawyers have a specific need in calling an auctioneer. That need can be described in two words - “problem solving.” These sellers call for an auction because they see that selling method as offering an acceptable solution for solving a problem that currently occupies a spot on their desks - and an auctioneer wields that solution. This is where auctioneers should lose any feeling of intimidation they might have felt and replace that with a sense of professional confidence and business value. Sure, bankers and lawyers have the good business that auctioneers want - but auctioneers have the auction method of marketing and the ability to solve problems that these sellers need even more.

When presented with an opportunity to meet with a banker or lawyer and discuss potential business, what should an auctioneer do?

Every auctioneer should first carefully consider the business being offered before simply accepting it. The opportunity should fall within the auctioneer’s area of competence and capability, plus it should be worthwhile so that it will yield a reasonable return for the investment in time, money, and labor that would be required to do it.

Next, since the banker or lawyer will almost certainly already be a believer in the auction method of marketing, the auctioneer ought to focus the sale presentation on his or her experience in the field, areas of competence, and capabilities to do what is needed. The auctioneer should seek to close the deal by wrapping his or her credentials for doing the business with this statement: “Now, let me explain what I am going to do to solve your problem.” This is the killer statement and it marks the spot where an auctioneer begins to sing a beautiful song of a siren into the ear of the banker or lawyer.
For most of these sellers, problem solving is a lot more valuable than merely further paring a commission rate. Consequently, auctioneers should emphasize problem solving in their sales presentations to these prospects. Knowing that he or she possesses the critical problem-solving skills that the seller needs should wipe away any feeling of intimidation by an auctioneer and replace it with a calm and well-deserved confidence.

Steve Proffitt is general counsel of J.P. King Auction Co. Inc. (www.jpking.com).  He is also an auctioneer and instructor at both Reppert School of Auctioneering in Auburn, Ind., and Mendenhall School of Auctioneering in High Point, N.C.  He welcomes questions from readers about auctions and auctioneering.  Readers’ communications may be reprinted in whole or part. Mr. Proffitt will answer selected questions but cannot provide personal answers.  His answers do not represent legal advice or the formation of an attorney-client relationship and readers should seek advice from their own attorneys on all matters. 

Please submit questions to sproffitt@jpking.com