We have previously written and talked about promoting oneself as an auctioneer. The typical conversation centers on selling the low (affordable) price and/or the high value: https://mikebrandlyauctioneer.wordpress.com/2019/05/07/hiring-an-auctioneer-is-it-price-or-value/.
Our question today is … can you just give yourself a raise? In other words, you’ve been charging 10% on real property deals, so this year charge 20%? You’ve been charging 20% on personal property deals, so this year charge 30%? Why not?
As an auctioneer, you can charge whatever you want — the issue then becomes will anyone hire you? Consumers historically — and certainly here in 2020 — are sensitive about two issues: cost and value. Sellers will pay more if they perceive more value, and conversely will pay less when they perceive less value.
There is also the thought that people, “get what you pay for” or said another way, “it’s worth what it costs.” So would an auctioneer charging 30% be clearly better than one charging 20%? Not necessarily as if it was that easy — why not charge 500%?
In this regard, it seems to us that if you want to give yourself a raise, then become more valuable in the eyes of those hiring you. “We charge 10% more than that other auctioneer, and here’s why …” or “Here’s why we’re better and our fee is 10% more …”
How are auctioneers judged by the public? Typically, consumers look to past performance; what have you done in similar situations to mine? What kind of track record do you have? Have you solved problems like this before?
While expected returns are a bit less predictable, costs are hard numbers and as we discussed here are only half the picture: https://mikebrandlyauctioneer.wordpress.com/2011/04/24/auctioneer-commission-is-only-half-the-picture/.
In that above treatise, we pointed out that if auctioneer A is charging 10% on a $100,000 auction, the seller nets $90,000. Auctioneer B charging 20% needs only to gross $112,501 to net the seller more.
One strategy we (and other auctioneers) have employed is essentially becoming unique. If you are the [only] auctioneer in the area, region or United States who performs a certain task or provides a certain service … then you can essentially set your price unilaterally.
Ultimately, it’s all about supply and demand which sets prices. If you’re in demand, it might be a good time to consider to “give yourself a raise.” It’s fairly easy to find out if you’re charging too much.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.