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April 19, 2018

Clearing Inventory with Unique Solutions

For an antiques dealer, there are several circumstances that have the same physical impact as being gut-punched: a levy notice from the IRS, your partner running off with all your money and the fire marshal telling you, “I’m afraid I’m going to have to shut you down.”

Linda Balentine heard those jarring words from a Roanoke, Va., fire marshall just three days before a scheduled auction. Her consignments had been arranged, her advertising was done and paid for and her room was set up and ready to go. Cancelling the auction would be problematic — and expensive — for everyone involved.

The visit from the fire marshal was just another blow in the harassment of Linda by a local auctioneer who was not pleased with the success that she had been having with her auctions. The visit was also the first step in a new direction for Linda’s business — a direction that would result in a unique business model and even greater success. And, Linda’s solution offers a roadmap for antique and consignment dealers who struggle with excess inventory and sluggish sales.

Linda’s story is one of obstacles overcome through creative solutions. Sixteen years ago, she started a moving company on a shoestring: Crowning Touch Senior Moving Services, specializing in relocating and downsizing seniors. Linda’s customers frequently had excess furniture and household goods that they needed to dispose of, so she opened a consignment shop to sell those goods. It wasn’t long before her shop was bursting at the seams, and she needed to find a way to move the glut of inventory. So, she got her Virginia Auction House license, hired an auctioneer, expanded her space and began hosting auctions.

Linda’s reputation in the community resulted in almost instant success for her auction house … and thus began the harassment by a competing auctioneer. Complaints were made to the state auctioneer licensing board, and an investigation was initiated. When the board came out in favor of Linda’s methods, further complaints were made; this time to the fire marshal. Upon inspection, the fire marshal found that Linda lacked a “public assembly” permit for her auctions, and she was ordered to shut down until she obtained one. Obtaining the permit would take time – and her upcoming auction would have to be cancelled. This is when Linda’s creative thinking kicked in.

Since “public assembly” was the problem, Linda’s solution was to eliminate the “public assembly” of a traditional auction: No assembly, no auctioneer and no ring men. She would remove the chairs, set up tables and institute a type of silent auction. The fire marshal deemed that an acceptable solution; under such circumstances, he said, she was essentially running a retail operation, and she was already licensed to do that.

Modifying the traditional silent auction format required that Linda visualize a new way of executing a live auction without an auctioneer. Over the next few months, she continually tweaked her approach. Once the format matured, Linda hired a software developer to streamline and digitize the process, dubbed the “Browse and Bid© auction.”

Linda’s competitors should have “manned up” and kept their mouths shut, because with her new Browse and Bid© format she’s doing better than ever. At a recent Browse and Bid© auction, Linda had 633 registered bidders and more than 11,700 hits to her AuctionZip page — in an area (Virginia’s Roanoke Valley) with a population of roughly 250,000 people. Many auction houses in big cities would kill for those numbers.

A Browse and Bid© auction combines two favorite pastimes: shopping and bidding. When customers enter the auction house, they find a display area that looks more like a retail showroom than an auction house. Furniture is arranged in tableaus similar to those found in furniture stores and smaller items are displayed in tray or box lots for browsing. Typically, each monthly auction offers about 1,600 lots and runs for two days. In-person registration and inspection of lots is required; one cannot simply log on to her website to bid. Current high bids are projected to screens on the wall and on the website, and refresh every 30 seconds.

Those who wish to bid register in typical fashion and are given a bidder’s card with their number and space to write. They are then free to browse the lots and write down the lot numbers and descriptions of the items they wish to bid on. When they are finished browsing, they approach a clerk at a bidding station and verbally place their bids with the clerk. Then, they are free to leave. But, the bidding doesn’t end there: Registered bidders can bid online from home, or sign up for text notification if they are outbid. At the end of the auction, payment and pickup arrangements are made with the winners.

From a bidder’s viewpoint, this type of auction offers some marvelous benefits:

No more sitting for hours waiting for the lots you’re interested in to be offered. Simply place your bids and then leave if you wish. Once registered, online and mobile bidding are possible.
No buyer’s premium is charged.
Bidders can choose from significantly more lots than at a typical live auction. At a well-run live estate auction, an auctioneer can sell about three or four lots per minute. The 1,600 lots offered at a Browse and Bid© auction would take eight or nine hours to sell if they were sold at a traditional live auction, and I doubt that many bidders would sit through that, much less be willing to come back for a second day of bidding.
Bidders have a week to pick up their purchases.
There are also benefits to the seller:

In-person registration and inspection of lots cuts down on bidder fraud and uncompleted transactions.
Online and mobile bidding preserves the sense of urgency typical to a live auction.
Browsing over two days eliminates many problems with seating, parking, food service and lavatory demands.
Although the specifics of the Browse and Bid© auction and its accompanying AuctionEase© software are proprietary to Linda’s business, the fundamental concept (silent auction) she employs is in the public domain and can be put to good use by antique dealers and consignment shops. There are applications and Web providers available for mobile and online bidding. In fact, Linda licenses her AuctionEase© software and welcomes inquiries at 540-556-5800.

In some states, an auction house license will be needed, but proprietors won’t need to know how to call bids. Other than that, all that’s needed is to do what Linda did: Think outside the box, get creative and move that excess inventory.

Previously published by Antique Trader Magazine

Originally posted 2014-01-21 11:27:00.

More Stories From Antique Trader

About Wayne Jordan

Wayne Jordan is a Virginia-licensed Auctioneer (#3481), as well as an AIA and CAGA Certified Personal Property Appraiser. Learn more at http://www.resaleretailing.com/wayne-jordan-auctioneer-appraiser/

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