An insider’s guide to booking profitable industrial and commercial auctions

Sourcing leads, closing deals, and making auctions profitable.

By Emma Dougherty, NAA Content Developer

Getting started in a new industry is daunting, especially when or if the techniques used to sell are not familiar.

NAA member Russ Hilk, CAI, AMM, GPPA, has presented on booking and closing industrial and commercial auctions. He has given tips on identifying lead sources, improving websites to appeal to sellers, and closing auctions.

Sources, of course, are a vital part of booking auctions, and Hilk has identified eight groups to connect with and begin building your source bank.

New and used equipment dealers: “50 percent of something is better than 100 percent of nothing,” said Hilk, who co-founded and is CEO of Wavebid, an online auction management solution company. According to Hilk, dealers will buy a limited amount from a closing company, but if the company wants a broom swept building, then a dealer can call an auction company for a joint venture.
Who should make your list

Suppliers, vendors, delivery drivers: These professionals know which companies are struggling and are about to close. For example, delivery drivers know the companies that have dropped off 50 tons of material the last year, and only two tons the last two months.

Commercial real estate brokers: Commercial real estate brokers want to show clean buildings. Empty buildings sell, so they have different kind of motivation than other sellers. They want to get rid of everything in the building as fast as possible.

National industrial brokers: Large companies often seek local help for certain auctions.

Education workers: Teachers, school board members, and custodians: Education produces a lot of surplus materials. Technical colleges especially do this because they are always opening and closing departments. “Saint Paul College decided they wanted to open a department to fix watches, so they had Rolex send them $3 million worth of equipment. I think it was open for three years, and they did 18 students. It was an incredible auction,” said Hilk.

Business brokers: Buying and selling businesses produce an abundance of leftover assets.

Business consultants: Hilk recommended using business consultants such as the Turnaround Management Association and Investment Recover Association to promote professional management of surplus assets and utilize directories to introduce companies.

Bankruptcy trustees: Although bankruptcies are tough to get into, websites such as businessbankrupties.com list companies in certain communities that may need to sell their assets.

Make your website content intriguing

“If you don’t exist online or aren’t showcasing who you really are online, you’re going to start costing yourself deals” said Hilk. He also advised a website is the best tool to reflect what a company is trying to do. To ensure that a website is intriguing to sellers, make sure to include these kinds of important content:

– Include verifiable information and highlight experience: Demonstrate expertise with commercial and industrial auctions by citing education, qualifications, and experience. Use client testimonials to establish credibility and showcase results by publishing case studies, past clients, auction results. This will help leverage success into future sales.

– Showcase people: Humanize a website by featuring “the team.” Include pictures and personal anecdotes. This makes a website relatable and seem honest and trustworthy.

Closing the deal

When closing an auction, it is important to give the seller what they want. Focus on these three steps to ensure success:

– Identify the need: Ask questions and determine the situation. Be prepared to dig deep and build trust with the seller while solving their problems.

– Isolate hot buttons: Know what is especially important to the seller and use that to stand out and differentiate your business from other companies

– Provide a solution: Every solution is different for each seller. Incorporate hot buttons and repeat back what the seller said their priorities were.

This article was an excerpt from a presentation given at the 2016 NAA International Auctioneers Conference and Show. Want even more tips regarding this topic? NAA members can access the full audio of this presentation and many others in the NAA Knowledge Center. Also, you can access the NAA Auction Professionals Facebook group at: facebook.com/naaauctioneers.