The hard times that many auctioneers are experiencing were my focus last week. We are in an unprecedented situation unlike any that many long-time practitioners can recall. Uncertainty and frustration are common reactions among auctioneers as fewer sellers of quality assets come to the auction markets.

Despite the current downward trend, I noted several reasons conditions will eventually improve and auctioneers will return to a period of economic prosperity. This week I am offering some suggestions to help auctioneers prepare for and reach these better times.

Business runs in cycles both up and down. When times are good and business is going hot and heavy, there is plenty of money to be made as both sales and profits expand. Expansion, however, is always followed by a period of contraction and, when it strikes, business falls into the deep freeze and all activity slows, including the ability to make sales and earn profits.
This is the way it has always been and this is the way it is today. The roses that once bloomed so beautifully in the auction garden have given way to weeds, but the roses will return again. The question is when. Auctioneers need a positive outlook and the kind of thinking that goes with that.

Just because new auctions are not cluttering an auctioneer’s calendar is no reason to go on an extended fishing trip, or sit at home and vegetate in front of a cable TV with a 500-channel package. Instead, professional auctioneers who are serious about the auction business will be looking hard to find the next good auction, because that auction is out there somewhere and some lucky auctioneer is going to land it.

The key for auctioneers in a declining market is to be visible and stay busy. This requires more to accomplish when sellers are not as eager to come to auction, but auctioneers who have fewer auctions to prepare and conduct have more time available to work on their public visibility and pursue prospective sellers. They should do both.

The obvious reason is that hard assets still have to be liquidated and not every seller can sit on the sideline and quietly wait for market conditions to improve. Some have to sell … now! Auctioneers want to meet those sellers … now!
Auctioneers should search for and try to land these sellers even if it requires shaving their commission margins to do so. I did not say give their service away and auctioneers should hold their commission rates whenever possible, because these are the rates their businesses need to be profitable and stay viable over the long run.

Commission cuts should be made sparingly and only where necessary and then kept as shallow as possible.

Auctioneers should not work for nothing or at a loss. They should concentrate on staying as active as possible while doing what is necessary to keep their businesses solvent and steer through this difficult period while waiting for better conditions.

I am also not advocating that auctioneers do business with inferior sellers who have only junk to sell, or who want unethical or illegal practices used, or who represent an undue risk of exposure to liability or regulatory claims. Instead, auctioneers should concentrate on gaining reasonable sellers with acceptable goods to bring to the auction markets.

Steady activity yields momentum for an auctioneer and a threefold payoff. First, when an auctioneer is busy, this is a natural magnet that attracts sellers. A seller who sees an auctioneer working will consider using that auctioneer. The seller is not going to consider hiring an out-of-work auctioneer who is sitting at home and doing nothing.

Second, activity will carry an auctioneer forward and keep his or her skills sharp, even when the best business is not available to the auctioneer.
Third, activity will position an auctioneer for the good paydays that lie ahead when better times return and much of the competition has been washed away by the downturn. This is when the surviving practitioners will be in the catbird seat and ready to take full advantage of all of the opportunities that will suddenly be at hand and ready for the taking.

One way auctioneers can seek sellers is to run through their list of past sellers for the previous few years and contact each one. The people that an auctioneer has dealt with represent a fertile bed for additional business, so long as the auctioneer did a good job and treated these folks right.

Some of these previous sellers might have additional assets to sell. By grouping several of them together, the auctioneer might be able to create enough inventory for a good consignment auction. Additionally, some past sellers might be able to steer the auctioneer to new, prospective sellers.

Another way for an auctioneer to hunt for new business is to pursue prospects that the auctioneer did not have time to previously contact and cultivate. Bankers and lawyers come quickly to mind, but so do large retailers and wholesalers which might have inventory surpluses to liquidate, transportation companies that have to get rid of damaged and undelivered freight, etc.
These are examples where it is not just important for an auctioneer to think outside of the box but, rather to go outside the box and scour new ground for new opportunities and business.

Yet another route for an auctioneer to follow in seeking new business is to develop and present seminars on auction marketing to audiences of attorneys, bankers, businesspeople, and the general public. Speaking to groups is a long-time and well-proven means to finding new sellers and securing their business.
Such efforts will raise an auctioneer’s public persona and eventually pay real dividends. The problem is that this takes a lot of work and the payoff is not usually immediate. Nevertheless, like the old saying goes, “The harder you work, the luckier you will be.”

Finally, auctioneers should remember this cardinal rule: Business comes to those who seek it, strive to get it, and are prepared to do it. Work hard. Be that auctioneer. The return to prosperity is ahead and auctioneers need to survive the downturn in order to be ready when the upturn arrives.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Steve Proffitt may write to him in care of this publication.