When I was attending auction school, we would go out at night to various local auction houses to practice our bid calling and stage presence. I think that was when I decided … some day I wanted to open an auction house myself.
We’re based in Columbus, Ohio with over 2,000,000 people in the greater Columbus-metro area. That was one consideration but not the only one. More importantly, we had established ourselves as auctioneers in the central-Ohio area before we opened an auction house — a critical detail for almost anyone opening an auction house themselves.
While there are exceptions to this rule, it is generally thought that an auctioneer with established relationships with attorneys, real estate brokers, accountants, retirement facility administrators, bankers, trust officers and the like is in much better condition to open an auction house, than one without those contacts.
Maybe no different than learning to drive before buying a car … auction houses cost money to own/rent and operate. These expenses include cash/financing to purchase or rent, taxes, insurance, utilities, maintenance, staff and marketing in addition to profit out to the owner. Without knowing how to drive or having those sources of personal property in place, these costs can begin to accumulate well before any income (benefit) begins.
Auction houses operate based upon basically one of two models — either taking in consignments and/or buying property which is then sold at the auction. Either model (maybe somewhat less if buying to resell) takes a solid “book of business” to sustain any longevity — that is past clients who are loyal and are likely to continue to be clients of the auction house and refer others to the auction house.
Another lesson auction house owners often learn is that good bidders (and buyers) often make good sellers. If a bidder/buyer senses you’re getting good money for firearms, coins, jewelry and the like, where do they think to sell those types of items? At your auction house.
Auction houses over time can become as much of an event as an auction, where people tend to know each other, socialize and plan to attend the next one. Auction houses that work on a regular schedule (every Wednesday, for example) tend to have the most dedicated (repeat) audience.
Most auction houses are either owned or rented and both have advantages and disadvantages. Owning gives a titleholder equity and stability, but constant maintenance, repairs and the like. Renting is less commitment where an auctioneer could move with sufficient notice and avoid some maintenance costs, but with a landlord’s say in how long you can remain in possession.
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, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.