An auction is a type of public sale where participants bid against each other to purchase merchandise. An auctioneer business owner is the individual who leads and sells the merchandise at these auctions. It is an exciting business idea if you are passionate about sales and leading. Here is a step by step guide on how to start an auctioneer business.
Step 1) Apply for accreditation as an auctioneer
First, you will need to find out about your state’s auction license requirements. In NSW, you need to be holding a real estate or stock and station agent’s licence in order to be eligible to apply for accreditation as an auctioneer. You will also need to be assessed by a qualified trainer working with a registered training organisation in order to demonstrate competency. However, many states have differing eligibility requirements and certification levels. So ensure you follow your own state’s unique steps when applying for accreditation as an auctioneer.
Step 2) Network with auctioneers
This step is crucial in order to gain insightful industry knowledge and valuable tips. Here are some prompting questions you might want to ask:
- What were you biggest struggles when setting up your auctioneer business? How did you overcome this?
- Is there anything you wish you did differently when starting up your business?
- What is your number one tip for being successful?
- How did you get your business name out there when you first started?
- Who are your competitors at the moment? Why?
Don’t be discouraged if your local competitors are hesitant to give you tips. They are your competitors after all. Instead, try reaching out to auctioneers in other geographic areas online and they might be willing to share their thoughts!
Step 3) Learn how to appraise merchandise
As an auctioneer business owner, you must have an outstanding ability to evaluate the items to be sold. Hop online and compare item prices between different websites to develop your appraising skills. Additionally there are many courses available in NSW you might want to take in order to develop these skills more professionally.
Step 4) Choose your auctioneer business structure
There are three main types of auctions:
- Increasing-price auction (goods are offered at increasing prices)
- Sealed-bid auction (each party sends sealed bid to the auctioneer to determine the highest bid)
- Decreasing-price auction (price decreases)
There are many pros and cons of each type of auction. You should do thorough research on each type in order to choose which auction will be the most practicable and profitable for your business.
In addition, you should also consider whether you want to run a live or online auction business. Live auctions are typically conducted in an indoor location whereas online auctions will require bidders to submit their bids online (usually on a website).
Step 5) Create a business plan
Now you have completed all the basic steps to start an auctioneer business, it’s time to create a business plan. This allows you to plan for the future, helps you stay on track and update your plan when there are any changes. You should include:
- Business analysis
- Competitive analysis
- Customer analysis
- Marketing plan
- Operations and management plan
- Financial plan
Read in detail how to write a business plan here.
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Get startedStep 6) Advertise your business
Get your business name out there by advertising your business. You could create a website to promote your auction business and list the upcoming auctions as well as the items to be sold. You can also choose to market on sites such as Google as well as popular social media platforms.
Good luck!
