Ask These Questions First and You Won’t Regret It Later.1) How many years have the Current Owners had Control of the Company?I recommend that you do not do business with a company that has not been established, with its current owner for more than 7 years. Most businesses (approx. 80%) will fail within the 3-5 year mark, if they make it that far. You don’t want to invest all of your time and energy into a company that is going to close its doors on you, just as you start to make some money. Some companies are aware that people look for this and will buy an established name or trademark so that they can claim they have been established for longer. It is important to include the phrase ‘under current ownership’ when you ask the question.2) Do I need to Stock, Sell, Distribute, or Package Any Products?It is a very time consuming activity to resell products when you have to package up other peoples orders, collect their money, deliver, etc. The days of doing letterbox drops of brochures, flyers, etc are gone – so should be the need for you to handle other people’s money and orders. If you are going to partner with a company where you are required to do these things, ensure that you include the time taken to perform these tasks in you cost calculations. These costs can easily be 25% to 50% of your potential profit, is your time worth that little?3) If You Invest in the Company and Partner With Them, What Sort of Guarantees do They Offer?If a Company is a good and as reputable as they should be for you to partner with them, they will provide you with a written (and in modern times web-published) guarantee that you can get your money back if down the track they don’t pan out to be everything that you hoped they would be. Most reputable companies will extend a minimum 30-60 day money back guarantee. Ask specifically what is covered by the guarantee. Some companies only cover minor elements related to the costs even though you may be lead to assume they cover all aspects of your start up investment.4)Is the company private or public?There is really no major benefit either way, except knowing what tools and resources you will have available to determine the strength of the company. For example if they are publicly held, there are a number of filings that they must make available to you. If they are privately held you can run a credit check or various companies such as Dunn and Bradstreet will share the company’s credit rating to insure they are financially stable. If they are privately owned, it may become even more important to be aware of the time the company has been operating under current ownership.5) Will the Company Provide You Annual Growth Trends/Sales Statistics?If you want to know how a company is going to perform in the future, look at how they have performed in the past. Look at the sales performance for the most recent five years. If they won’t reveal sales figures or trends – there’s probably a reason. (ie. They’re embarrassed by it.) Reputable companies realize the need to provide you with sales information, especially if they are asking you to invest in their business or as a home based business partner.If they will not give you this information, we suggest you walk, no make that run away. For those who do, you are looking for positive growth trends and sales volumes. That’s one indicator for selecting a growth company to partner with and one measure of how safe your investment may be. We don’t recommend partnering with a company that’s stagnant or declining in sales. It can also be pertinent if possible to have a look at what happened with the trends during a recession… If they can survive and grow then, then they should be fairly stable.6) Ask about ‘Hidden Costs’.I have researched many home based business opportunities and this can be a real issue. I will tell you now about some of the more common hidden fees that you don’t get told about until after you have made a decision. Many companies offer websites as an added value when you start your home based business. It can be a very valuable and powerful tool. We have found that a ‘Free Website’ isn’t usually free at all. Some offer a website free but have a whole host of hidden charges associated with using it. Some charge to shorten unusually long website names known as URLs to a more manageable length. That’s just a way to charge you for that supposedly free website and not very ethical.Many will not disclose this option until after you start. Others may charge you for user fees, full use of all features including the database, calendar, members areas or even monthly maintenance just to mention a few. Be sure to ask about any and all costs associated with the ‘FREE’ options like websites. Make sure that if you are being offered a website, that hosting is included also… this is real big one – so many companies out there offer a free website… the catch is that you have to host it with their hosting company at your expense. This is usually an extremely inflated hosting fee. Reputable companies don’t have hidden costs – they practice full disclosure. If you identify hidden costs they didn’t tell you about voluntarily, be very cautious. You don’t want to be associated with a home based business that preys on others inexperience.7)Ask about Awards that the Company has Received and what Reputable Organisations they are Registered With (ie. Better Business Bureau)?This can be a bit misleading, so be very careful. A large number of companies will tout numerous awards from organisations that they have created. A reputable company will have numerous awards from tangible and respected organisations, such as the Better Business Bureau, or Ernst & Young, even right up to the U.S. Chamber of commerce.Whilst awards and recognition on a global scale are evidence that company has a strong foundation and good business sense, always ensure that the awards listed are from reputable organisations, and ask about what criteria the company needs to meet in order to receive these awards.8) What are People Actually Earning?When I researched hundreds of home based business opportunities, I found very few were willing to provide income statistics about there representative for very apparent reasons. There are only a very select few who are actually earning an income, and they are the ones that were there at day one… which was probably several years ago. Most people who represent them are actually running at a significant loss. The companies will probably tell you that they don’t release those statistics in the interest of protecting their member’s privacy. This is usually just an objection cover straight out of Sales 101 when someone asks for information that would embarrass the company. No income statistics will usually mean no income for you.9) How are the going to help you, not only in the first 30 days, but for your business life?This is by far the biggest indicator of your potential to succeed with this company. What do they offer you to help. Will there be charges for mentoring after thirty days, will you be required to pay to get access to the training website (if they have one) at any stage. What tools and resources do they have to help you achieve the success you deserve? Sadly a large number of people and companies hide behind a home-business opportunity. They don’t care one way or another about your success, all they care about is how much money they can wrangle from you. They will offer to mentor you at a price, give you a “do it all” website for a price, they will basically offer you all of those things that you do need, particularly when you are first getting started at a price that you probably cannot afford.10) What are their products like?First of all, if they do not have a product, it is probably an illegal pyramid scam. Most people are aware of that now, so the less reputable companies will have a how to e-book or something of the like that you pay $997 for. (Which would struggle to sell on its own for $7?)Other Companies will sell tangible products, but at absurd prices… Products that would not stand the test of time without a business opportunity to support them. You probably know some of the things I’m talking about like $13 tubes of toothpaste, $60 bottles of juice, or even a phone plan that will easily double your next bill. What you are looking for is a company that stands head and shoulders above the rest when it comes to things like price, product quality and customer satisfaction. Another positive is sign is products that have patents. To determine if the company is right for you, look at the products, the quality and the price in particular and ask yourself… If there wasn’t a business opportunity here, would I still purchase these products? The answer will speak volumes about whether or not you should pursue a partnership with that company.Reputable businesses will not hype you up on some figure head, the insane income opportunity or just how simple it is. They will provide you with all of the facts that you need to make an informed decision on your own… They know they have the best, they know you will join them sooner or later and they will leave you to decide when will be the time for you. They flaunt it – because they have it. Bottom line is that if you think the information is important, and they won’t give it to you before you join them… BE VERY CAREFUL! The best situations are evident when they offer a wide range of support, training and tools to help insure your success. The best do not have hidden charges or undisclosed add-on costs. The best do not charge for the advice they promised to provide before you got started. You should expect to be paid for your efforts but don’t expect instant success. You have to work at it. If they tell you it doesn’t require hard work that’s a reason to steer clear in itself.For more details visit my blog: http://therealhacks.blogspot.com
Choosing The Best Home-Based Business
You are seriously looking for an additional income stream and you want to work from home. With the internet full of business opportunities, which one do you pick? Do you choose the one with the most income potential? Do you pick the one with the best opportunity or the best product/service? And do you choose an affiliate or a network marketing home-based business?Listen, I am going to cut through all the misconceptions and lies out there and get right to the point. I hope this will make absolute sense to you. There are 4000+ network marketing companies today to choose from. There are thousands, no hundreds of thousands of products and services to choose from. If you are looking to work from home, to add an additional income stream to meet your families’ needs, then an affiliate marketing business with several products will certainly work faster. If you want to create generational income then network marketing is the ticket as this will involve building a downline, working with people who want your product/service as well as your opportunity. The best home-based business is determined by your interest and passion.Many people get involved in the next best home business that promises great money, ‘get-rich-quick’, and no need to have any particular skills. Money talks… absolutely. However, you are best choosing a business based on the product or service. Ask yourself these questions:
1) Do you believe in the product or service?
2) Is the product or service viable; is there a real need for it today, and who would purchase it (besides yourself)?
3) Could you become passionate enough about the product or service to reach out and share it with others (other than family, friends)?
4) If choosing a network marketing company, then you need to consider the company’s credibility; how long has it been in business, and does it have a good, lucrative compensation plan? And
5) Are there guarantees with the product/service?After considering these questions, then it is simply asking yourself if you want to sell purely product or are you vested in other people: i.e. helping them solve their pain or problems with the solution you have and working with them to help them be successful as well. Either way, you need to know how to:1. Target your audience who needs, wants, and desires your products/services.
2. Position yourself so that these targeted prospects find you.Now if 80% of people are on the Internet looking for that product or services, guess where you want to be found? Absolutely, on the internet! And you certainly want to know what you are doing. You need to acquire a skill-set… a proper marketing skill-set that involves creating an attractive website with relevancy to your product/service, that’s keyword-rich, and has a compelling message to get prospects to take action.There are billions of websites out there today and many of them are purely informational or too lengthy or devoid of relevancy or a ‘call-to-action’. You can pay large sums of money to have someone else create your website, you can try to do it yourself and struggle; however, if you (have the advantage of support with a mentor) can learn under the wings of a mentor so that you make the least amount of mistakes and ultimately learn to do it yourself, then this is the best avenue. Invest in yourself because you are your best resource.Choosing the best home-based business must first come from your core belief, your interest and passion to help others with a viable product (or service or information) and then have them finding you, the expert from whom they will ultimately purchase because you are solving their pain or problem. For an Affiliate Home-Based Business you will need to optimize the Internet and Copy (the power of the written word). For a network marketing home business, in addition to the internet and copy, you will need the telephone to prospect, present, and close business. Find your niche first, via the product, then you will have taken the first best step for a home-based business.
Start Your Home Based Business – Get Into Action
You have decided to start the home based business. Have you thought about your own passion, goals and values? If such is the issue then you should move on with achieving your dream. Once you have decided for it then you need to collect information from everywhere and know the pros and cons of the home based business. There are three basic things that you must know when you are about to start your home based business. When you start with your own home based business then you must know some of the operating details.The first thing towards having success in this home based business is having a good training for different ways of building a home based business. This training gives you the basic information of setting up your own business like product, market and market system. Look out for your product whether that is regarding your information, nutrition and diet supplements. Choosing of product is very essential, as this will indicate your directed audience to whom you will report. As you learn how to market the directed audience now you should start advertising techniques, train yourself with techniques that will help you in getting back your customers again and again. In all these methods, a good training is always helpful for your long-term home based business. This will help you in getting good investment. Secondly, you need to have some good support in this home business as it will help you in establishing good contacts. You might need some support while you start with your business, some kind of queries etc. so, there should be a good guide or a team who will help you in such situations. With this guidance, you can easily run up and make good connections. Although you are whole and sole responsible for your own website building and promotion of your own website and product yet in some time you need someone to whom you can clear out your misunderstandings and confusions.One of the main issues in initial stage when you decide to start your home based business is that you should have good budget with you. You must keep in mind that in initial stage you need good money because you have to develop and then promote your own work. You might get an offer that someone asks you to put huge amounts of money and later on they will pay you monthly, but you should keep away from such business means as they might turn out to be money blunder for you. There are many methods of promoting business and you must concentrate on those different ways. It might be little tiring as you might not get the results initially but you should have good patience in you to get good results. It might take you some time to earn huge amount of income from your home based business. so, if you have given a thought on home business then go and get into action by starting your own business and fulfilling your dream.
The Importance of Passion in Starting a Home-Based Business
IntroductionI recently received a call from a client. I use the word client loosely because in actuality she is someone I help as a volunteer counselor through a local Small Business Administration (SBA) office.Kelly (I’ll call her Kelly for this entry) is everything that an entrepreneur should be. She is passionate about her business idea (a restaurant serving Caribbean food), willing to work hard to turn her restaurant into a money making and community supporting endeavor.I met with Kelly to help her write a business plan and to go over the steps in starting a business. She is a single mom with a six month old beautiful girl and a clear vision of where she wants to go.I mention Kelly because I think it is important for all of us to have the same level of passion toward our business dreams. It is why I often counsel clients to identify something that you love to do regardless if you have a long line of people wanting to buy your products/services. We all want to make money and we can…but it is important to feel passionate about what you are doing.There is a changing demographic in the economy with the growth of the home-based business. Home-Based Businesses are a thriving segment of the economy. The Small Business Administration cites that over 53% of ALL firms are Home-Based Businesses and provide 10 percent of the total receipts of the economy….. or about $314 billion in 1992.For those of you are considering a change in career choice or a way of augmenting your income – a home-based business is one solution. For Kelly, her plans involve renting a space to create her restaurant which involves signing a year’s lease. My advice to her was to delay on the lease and to start selling at local farmer’s market to establish her brand, her revenue stream and to gear up for higher volume sales that are typical of a restaurant setting. I would classify Kelly as having a home-based business at this time as she goes through these important growth stages. Adapting this approach allows her to mitigate her risks and to control her growth.I recognize that this is not a typical application of the home-based business model but it represents the freedom and flexibility that the structure can offer. Traditional types of home-based businesses can range from service-oriented child care businesses to product-oriented craft outlets. Other examples include: farming, catering, specialty mail-order, home horticulture, and computer software consulting, woodworking and bed and breakfast establishments. In Maine there are over 39,000 home-based businesses which demonstrate the wonderful growth of this economic sector. I had a client who did wonderful wood working as a means of reliving stress from his government job and another client who does taxidermy out of his house as a hobby/business. Both of these gentlemen had passion about their craft, both had full time jobs but both were able to create viable small home-based businesses that allowed them to augment their income while practicing their art.There is no one reason why people are attracted to home-based business. For Kelly she wants financial freedom, an expression of cultural pride through her Caribbean cooking and the opportunity to fulfill a dream that her daughter will witness and be proud of. Other reasons for considering a home-based business include:• experiencing the personal satisfaction of making your own decisions• expressing your own ideas• financial independence• being your own boss – or as I like to say being in control of your destinyKelly is a single Mom which is a common demographic for those starting a home-based business. With the ecommerce company that I owned my employees tended to be older who wanted the freedom that a non- traditional job afforded them.I tell my clients there is no greater joy than owning your own business. It is the ultimate expression of creativity. At the same time I’ve never worked harder than when I was running my own company. Don’t be afraid to venture forth in pursuing your business ideas but make sure you have the passion to keep you committed to the endeavor.
Small Business Saturday – Social Marketing for the WIN!
If Benjamin Franklin wanted to engage more customers on Small Business Saturday, what would his “To Do” list look like?Be inventive – offer something new
Make it electric – create a positive atmosphere
Put Paul Revere in charge of getting the message out via social media
Have Jefferson craft the message
Ask Dolly Madison to whip up some free snack cakesIt would be fun. There would be bunting and maybe even a small parade. Franklin loved a good time and so should every business owner out there. Because Saturday, November 30th is our time to really shine. Don’t let the preparations stress you out. If you’re struggling to think of new ways to engage your customers we’ve gathered some great ideas from fellow business owners.Clicking on the Small Business Saturday link at the bottom of this article will take you to the American Express page where they’re offering free marketing materials to small business owners. Use their materials on all your social sites and in your store so that everyone can see you’re participating in Shop Local Saturday.
Use social media to get the word out. Create a coupon that’s good just for Small Biz Saturday and promote it starting the Wednesday before the event. The earlier you get the word out on Facebook and Twitter, the more chances your customers have of seeing the coupon and sharing the information with friends and family.
Offer complimentary refreshments. When shoppers get tired they lose interest. Have some tasty snacks or drinks on hand to revive them.
Include a free gift with every purchase. It doesn’t need to break your bank but it needs to be useful. Look around your shop and see if you already have something in stock. Be inventive.
Have a giveaway for a holiday gift bag filled with assorted goodies. When someone makes a purchase on Saturday, whether in store or online, have an entry form where they fill out their name, number and email address. This not only enters them in the giveaway but lets you add them to your mailing list.
Make your marketing count. Have a specific message about what you’re doing to celebrate the day. What are you promoting? What’s on sale? What are your hours that day? Will you have entertainment or live demonstrations? A prepared shopper is a shopper prepared to spend.Small Business Saturday is OUR Black Friday. So let’s make it a cool shopping party, not a shopping nightmare. Celebrate your customers and make their experience one of engagement and fun. Let the big box stores force them to endure long lines, elbow jabbing crowds and packed parking lots. Because with Ben’s advice, you can make Small Business Saturday electric, simply by encouraging folks to eat, drink, be merry and spend their fabulous Franklins with you. They can save their Washington’s for those other places.
Smart Way to Make Money with Your Best Home Based Business Idea
Having made a decision to start a home based business, you will now have to identify your Best Home Based Business Idea. There are numerous home based businesses that you can think of, but will all these ideas work for you? Will you be able to make money? Most people who wish to venture out do not have sufficient funds to commence operations successfully. Hence money will be an important consideration.
In such a situation or otherwise, the smart way to pick the best home based business idea will be to consider all the assets you possess such as your house, vehicle, computer, the time you can spare and of course the Needs of the community you live in.
Time:
If you want to make money with your business ideas then time is an important factor. How much time can you spare for your business? Having time available whether in the week-ends, full day or even evenings, is a great asset.
Selling your time to people who simply cannot find the time to do things for themselves is one smart way of picking your best home based business idea. Such people are prepared to pay for you for helping them out in such tasks as Child Minding, Baby Sitting, Secretarial Work, Car Cleaning and Valeting or Walking their Dog.
Home:
Having a home is the biggest asset to get your best home based business idea going. There are many possibilities such as converting one of your rooms into a Home Office, your kitchen for Catering purposes and your garage for turning out some products. You could also consider taking in a lodger offering bed and breakfast.
The advantage of running a business from home is that you save on rent which is substantial and also get part of your running expenses set off against taxes.
Vehicle:
If you own a car or a van it can be considered as another great asset like a house.There are quite a few business ideas that can be started using a vehicle such as Home Delivery Service, Courier Service and Cleaning Service. Identify the best home based business idea that will be right for you and implement it. Trade-in your car for a van and get started if you need to do so.
Computer Fax and Telephone:
A good knowledge of the Computer and the Internet is very use full and helpful in implementing several home based business ideas such as Internet Marketing, Affiliate Marketing,Secretarial work, Copy Writing and Desk Top Publishing. A Fax machine and a Telephone are great assets for your business.
Hobbies:
To many people, business ideas have originated from their hobbies and they have successfully converted their hobbies into money making ideas. Your hobbies clearly indicate that you have a keen interest and motivation. If there is a need for some of your skills such as Photography, Craft Work, Dress Making and Playing the Piano, in your community, you can without any hesitation convert your hobby into your best home based business idea.
Tools and Equipment:
The very tools you use in your home such as DIY Tools, garden and cleaning equipment can be successfully made use of to start your best home based business. With a van and with a few more additions to your equipment if necessary, several home based businesses can be started such as House Cleaning, Window Cleaning, Lawn Mowing and as Handyman.
Conclusion:
The smart way to identify the Best Home Based Business Idea is to make a serious study of the assets you possess and find out which of these you are good at and love doing. Assess the Needs of the local community and match them up. That’s it and you are done.
Build a Small Business Network to Help Your Business Succeed
As a small business owner you can often feel alone, even when surrounded by many people.
How is this possible? The answer is that many small business owners keep their business challenges to themselves. They don’t want employees, or customers, or suppliers, or family and friends for that matter, to know that they have business issues that might be difficult to manage.
If this describes your business environment, consider building a business network to help you manage your challenges and grow your business.
What is a small business network? In this instance it is a network of either similar or dissimilar small businesses that work together to help each other solve their business issues and also to help each other manage and grow their businesses.
Let’s examine an example of a small business network for similar businesses.
A group of between eight and twelve business owners in the same industry but in non-competing locations set up a peer business network. They get together (either face-to-face or online) at a regularly scheduled day and time (maybe monthly or quarterly) to discuss their small business strategy and issues and they each ask for, and get, feedback from the rest of the group — all experienced business owners of similar type businesses.
Some of the discussion might center on human resource issues such as training, hiring, firing, turn-over rates, and comparative wages or salaries. Other discussions might be on common customer centric issues such as turn-around times, over promising and under delivering, quality, service, handling difficult customers. Some sessions might focus on business planning, marketing planning, sales planning or results from plans.
To form this type of group, business owners could meet through national or international industry trade associations. To make this type of network work, the participants must sign confidentiality agreements and non-compete agreements — even though today the businesses are non-competing, there is no guarantee that tomorrow they won’t be competing. It is important that legal advice is obtained at the start of setting up this type of network — your group will need to know what is allowed or not allowed by government competition acts.
The advantage of this type of network is that all participants already know and understand the industry and can bring that knowledge and expertise to the discussions.
Now, let’s examine an example of a small business network for dissimilar businesses.
This type of network would work best in a group of not less than eight and not many more than twelve business owners (too small and the input is weakened; too large and it’s hard to have a voice or hear what’s going on). This group would get together on a regular basis (likely monthly) and review each business’ progress, operations, challenges, or the designated topic of the month. Since this is a network of non-competing, dissimilar businesses, the group could be local and meetings could be face-to-face.
An advantage for local meetings is that the group would be operating in the same economic climate and would have a thorough understanding of what that means to local businesses. It would be relatively easy to form a local group by meeting businesses through local small business associations.
Topics could be selected in advance by month, by quarter, by year and each business owner would attend a network meeting prepared to discuss issues surrounding that topic. For example, one month’s topic could be about reducing the cost of financing and sharing tips and tactics. Another month’s topic could be about the use of the best and most successful recruiting methods for that local area. Another month’s topic could be on creating a business plan and the necessary tools to do so.
In this type of network it is also important to have confidentiality agreements and non-compete agreements at the start of the network meetings. You will want to have the assurance that if someone leaves the group that they won’t share confidential information with others.
The advantage of this type of network is that you can more easily set this group up in your local market so that face-to-face meetings would not be difficult and that you might actually get more out-of-the-box thinking from business owners outside of the industry who are not constrained by past practices.
For both types of networks, use an outside facilitator to ensure that the group stays on track and that each member gets out of the network what it needs (its reason for joining). The concept of a business network is to provide small business owners with a small business advisory group to test solutions, find answers, change old ways of doing things, and more. In large businesses, that type of network support typically comes from other departments or management. In small businesses, a strong small business network is part of an overall business community that becomes part of the infrastructure for your business’ success.
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.