Our Auction Process - How Our Auctions Work
If you have never sold items at an auction house before, the auction process is probably not familiar to you. We have outlined the entire process, so our customers will have a better idea of what to expect throughout each step of your auction or estate sale.
1. Submittal - Customer Provides Information
The customer submits their request to consign items via an online form, email, and/or text message. Customers send information about the items they wish to consign. We would especially like to see photos, and we recommend photographing at least the best and most valuable items and providing as much information as possible. Companies such as ours will almost always want to see photos and/or a list of items, especially the most intriguing items.
2. Review Consignment Information
An auction or estate sale is not always the best option. We need to determine what option would be in the best interest of the customer. Our staff will review the information provided and help to decide what methodology would be in the best interest of the customer.
3. Answer Client Questions
If an auction or estate sale makes sense, we notify the customer and answer any questions they may have about our process. The goal is to make sure the customer receives all of the information they need to move forward with the process. Our website has a library of information where 95% of questions are answered in our FAQs.
It is very important that the customer is comfortable with the entire process before we meet. A consultation meeting takes time, and we need to know that the potential customer is serious about having us handle their consignment before we commit to a free consultation.
4. Paperwork
We usually send a sample consignment agreement and any other paperwork or necessary information before the consultation, so customers can review our documentation. Once we determine that we will provide an auction or estate sale service, we would need to agree on a commission rate and acquire a signed agreement.
5. Consultation
If both parties are ready to move forward, we will schedule an in-person consultation. Depending on the location and volume of items, this may be at your home or at our office. In some cases where the location is far from one of our offices, we can set up the consignment intake during the consultation process.
6. Determine Commission Rate
Once we determine that our service is a good fit, we set the commission rate. Most auction commissions will be between 25% to 35%. By comparison, most estate sale companies charge 35% to 40%, and most retail galleries charge 40% to 50% or more! Two main factors determine the commission rate:
- Level of effort required to prepare and perform the auction
- The total value of items.
In some cases, we will write up a proposal with details including the rate we would charge and how we would proceed. Generally, there isn’t much room for negotiation, as we are setting the commission rate where we believe we can cover our costs and still make a profit. For every sale, we are taking a risk, and we have to be confident that a project will result in a profit.
There are always auction companies that will offer lower commission rates, and many people will choose them by mistake. A lower commission rate usually means lower effort, very little advertising, poor catalogs, and possibly a bad sale. When you consign with Legacy, you are getting a much better overall value. We have a thorough process, expertise, a marketing plan, and a significant advertising budget. Legacy Auctions also has a reputation for holding incredible auctions with great client outcomes. We refuse to offer a cheap service, as both of our company and clients end up losing the opportunity for a great sale.
Here is the great news: We have no hidden fees or extra charges, so working on commission means we are aligned with our customers, and we have an incentive to earn the highest possible prices. Below, we include more details on our approach that helps us produce so many successful auctions.
7. Intake Process
In most cases, we must take possession of your items in order to conduct a sale. Using the utmost care, we acquire the items and store them in our warehouse.
8. Inventory
Our staff members will now tag, inventory, and stage items. Each consignment has its own area (often its own room). Our process ensures that we never have any mix-ups.
9. Curation
Our staff begins to research your items. We are trying to get a baseline of what we have as this will have an impact on our marketing approach. We have multiple experts on our team that we assign to items in their area of expertise. In some cases, such as high-end artwork, we may consider a professional appraisal. Appraisals can cost $200 or more, so we will consult with our consignor about whether an appraisal makes sense.
10. Studio Photography
Items are now photographed for catalog placement. We need to make sure that we show all sides and photograph items in a manner that will help us get the highest value. Once items are photographed, there is also an editing process.
11. Item Titles and Descriptions
The title and description need to include all relevant details of the item. They are important to ensure that bidders have a clear understanding of the items. The titles need to be accurate, so bidders can easily find items via keyword search.
12. Auction Catalog
Our next step is to upload items into the online auction catalog. We also edit the items to ensure they are displayed correctly. The entire intake and catalog process normally takes around 30 days for a typical estate auction. However, this can take longer at busier times of the year.
13. Auction Publishing and Post-Editing
Once we upload items, we publish them and go through a secondary editing process as we view how each item is displayed in the online catalog. We look to fix blurry photos, typos, or technical issues. We often have a different employee viewing the published auction, looking for ways we can make improvements.
14. Advertising
We have found that targeted online advertising increases our total auction value more than the cost of advertising. Utilizing advanced tracking, we can count registrations to ensure buyers from advertising register and bid on items. Our team includes a 20-year marketing expert who will run ads on auction platforms, auction sites, estate sale sites, social media, and search engines. We will also send out emails to our list of over 10,000 active email subscribers.
15. Vetting Registrations & Loss Prevention
Many registrations come from people who are repeat customers, but we are always seeing new registrants for every auction. New bidders must go through a secure application process to ensure that they are legitimate customers. Unfortunately, there are nefarious actors, scammers, and thieves in the auction world, and they are usually trying to use stolen identities and stolen credit cards. This is extremely critical as we do not want people bidding that can’t follow through with the purchase or that would have negative consequences on the entire auction. Although this is very time-consuming, our security and loss prevention process is one of the best in the auction industry. This is why we have an unrivaled 99.85% payment collection rate.
Note: The most common auction fraud occurs when someone steals a credit card, buys items at auction, and then requires that the items be shipped to a different location than what is registered on the credit card. This is a form of “fencing” and the reason why we will never ship an item to an address unless it is registered with the credit card. Absolutely no exceptions.
16. Auction Day
This is a busy day for an auction company. More than 50% of bidders are registering on auction day. We tend to have a large influx of questions from bidders too. Our entire staff is active, alert and diligent on auction day. The majority of bids are also coming in on auction day. This is why you will not see too many high bids in the days leading up to the auction. Once the auction goes live for final bidding, our Auctioneer will be working the auction.
17. Auction Proceedings - Hammer Prices
All items sell to the highest bidder. The final price is called a “hammer price.” We operate in a very efficient and effective market where there are millions of buyers registering for online auctions on our platforms every year. While hammer prices may fluctuate based on trends and annual cycles, it is very unusual for items to sell below average auction values. The market of millions of buyers determines the hammer prices. We do not implement any price controls or try to be smarter than the market. We have developed an extremely strong buyer base because people know that our auctions are fair, and everyone has an equal opportunity to purchase items. Our starting prices are also fair because we want as many people as possible to be able to place an entry level bid and help increase the interest in your items. We have done a lot of research on this subject, and we have found that lower starting prices lead to more buyer captivation and higher hammer prices. If you are uneasy about sending items to auction because you need to earn certain prices, you probably want to consider consignment with a retail gallery. Auctions are designed for people who are 100% ready to sell at the best possible auction price.
18. Invoicing & Payment
Immediately after the auction ends, we send out invoices. We start working on acquiring payments from each buyer. We have to ensure that we are communicating with all winning bidders as we have another large influx of questions in the 24 hours after the auction ends. We then have a secure process for collecting payments and verifying shipping addresses. At the same time we are also setting appointments for all buyers who want to pick up at our office.
19. Shipping
We have an entire shipping department with every size box and packing material. Once we collect payments, items are securely packaged by a professional. We print the shipping labels. Our carriers are notified for pickup. Our goal is to ship everything as fast as possible, usually within 2 days of receiving payment. Buyers pay for this process.
Note: People often complain about shipping costs because Amazon ships for cheap and allows you to reroute packages, but unfortunately, we are not a trillion dollar company that can take a loss on shipping, and we don’t have billions of dollars worth of loss prevention technology. We charge the carrier fee plus a fair amount for labor and shipping materials. We are normally at least 25% cheaper than any of the well-known shipping stores that many auction companies use.
20. Accounting & Reconciliation
Once the purchases are completed and paid, we begin reconciling the sale revenue to ensure it adds up to the total amount from the auction platform. Our company's owner has a Master's Degree in Accounting, and he has developed a thorough accounting process with multiple checks and balances. This is an advanced process that uses electronic and manual reconciliation to ensure everything adds up correctly.
21. Customer Payment
As soon as we have everything complete, we send payment to the customer via check or a wire transfer. It usually takes around 10 days after the auction ends to have all buyer payments collected and our payments sent to the sellers.