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Make Money With Auction Consignment

Maybe you’re an avid collector and want to part with some of your pieces to earn some extra cash. You might have just inherited some property you’d rather sell than keep. Or, perhaps you’ve often considered starting a reselling business where you buy items from various sources at the lowest cost possible and then auction them to the highest bidder.

Yet another way some people earn money is establishing a consignment relationship with a company to sell their goods. In this example, the company would €lend€ you the merchandise to auction with no upfront cost. If an item sells, you would pay the company the agreed upon purchase price from the proceeds. The remaining difference would be your profit. You make money without expending a lot of time, energy and money procuring items for sale.

In all these scenarios, the answer to whether you can make money consigning items to an auction is absolutely yes!

What Is Consignment?

The term €consignment€ comes from the French word €consigner.€ It means €to hand over or transmit.€ When you consign an item, you’re placing it in the hand of another. However, you retain full ownership until the item is sold.

With an auction consignment, you’re putting an item up for auction and agreeing to have the auction company sell it for you. If the item is sold during auction, the auction company receives a commission, or percentage, of the sale. The auction company distributes the remaining balance from the sale to you.

Why Auction Consignment Makes Good Business Sense

Why would you agree to let an auction company keep a percentage of your sale proceeds when you can keep all the money by selling it yourself? Here are some of the reasons why you would want to consider auction consignment:

€ Auctions create the perfect marketplace by instilling competition. If they really want an item, bidders will try to outbid the competition, which will raise the selling price. So, auction sales provide an opportunity to earn more profit.

€ Auctions are exciting, especially the live events. When you attend an auction, you’ll usually find a good number of bidders very interested in the items and the process. The high-energy nature of the auction event creates a lot of €buzz€ and encourages driving up bids.

€ Established auction companies will know how to attract the largest audience possible. Depending on the types of items being sold, a good auction house will have the right kinds of buyers in attendance. By having multiple prospects looking at your items, you increase the odds of someone wanting to place the winning bid.

€ Auction companies have specialized expertise about buying and selling. When you select an auction company that has specific knowledge with, and experience in, your item type, you can rest assured your item will be correctly valued, effectively promoted and marketed to the right kind of bidders.

€ When you auction your items, the sales process is typically much quicker than other methods. The event is held over a short time period, after which you receive your money for any items sold. Why wait for an item to sell at a retail location or hassle with placing an ad? With auctions, your item can sell during a single event.

€ You can also control the minimum price for the item. By having the auction house place a €reserve€ on the item, you won’t sell the item for lower than your established acceptable minimum.

€ Auction consignments carry no risk. If your items don’t sell at auction for the minimum reserve price you established, you have the freedom to try another auction or sell through another venue. You still own the item, so you don’t lose anything.

The Auction Consignment Process

With auction houses handling everything associated with the sale, they make your life a lot easier. You simply collect all the information you have about your items, take them or ship them to the auction house, enter into an agreement and wait to receive your sale proceeds.

Here’s what typically happens when you consign items to auction:

1. Select an auction company – Your goal is to find an auction service with experience buying and selling your item type. Specialized expertise is important to the marketing of your items, and ultimately in the amount of money you make.

In addition to expertise with your items, find an auction company that’s established and has a good reputation. One with a physical location and warehouse facility is important too. Ultimately, you want to form a long-term, mutually-beneficial partnership with the auction house, so do your homework carefully.

2. Appraise your items – Before entering into an agreement, you need to know what your items are worth. The best auction companies will have professional, in-house appraisers to handle your appraisal. They will carefully inspect your items to determine condition.

Once they determine condition and estimate value, you can decide on whether to include a reserve, or minimum, selling price. After your item is appraised, the auction house will store the item in its facility until the auction event concludes.

3. Enter into an agreement – The agreement between you and the auction house should be straight forward, but include all the necessary terms. The most important term is the consignment percentage awarded to the auction house when the item sells. You must know exactly how the commission amount will be calculated.

Also, look for any hidden charges. Everything you’ll be expected to pay should be clearly defined in your agreement. All charges associated with the sale of your item need to be disclosed upfront and included in the agreement.

4. Photographing and cataloging the items – The auction house will prepare your items for an upcoming auction by professionally photographing and cataloging them. A photographer will take various images of your item from all angles. The auction house staff will write a detailed description of your item, highlighting the positives, as well as any issues like scratches, dents, non-working condition, missing parts, etc.

5. Promote your items – If you’ve selected a well-qualified auction house, you can expect your items to be successfully promoted. But find out specifically how the auction house attracts potential bidders.

What’s the size and make-up of their mailing list? How and where do they advertise the auction event? Do they have a strong web and social media presence? Do they have multiple ways for bidders to participate in the auction, such as attending the live event and bidding online? How many bidders have they attracted to past auction events?

6. Prepare for preview inspections – Prior to the auction event, interested bidders can inspect all the auction items. The auction company will help ensure your items €show€ as effectively as possible. Inspection periods usually are conducted over multiple days and times.

7. Conduct the auction event – Professional auctioneers will manage the buying and selling process. They know how to get the most money for each item.

8. Close the sale – Good auction companies will have advanced technology to handle payment processing, invoicing and tracking of all items sold. You’ll know exactly what the item sold for, the commission to be paid to the auction house, and the balance amount due you. Established auction houses will provide you with payment within a short period after the sale, but no more than 30 days from the auction date.

You may be pleasantly surprised by how much money you can make with auction consignments. Whether you’re cleaning out closets and garages or securing external items for the purpose of reselling, auction consignment provides a simple, safe and worry-free experience. Once you enter into an agreement, you can sit back, wait for you.