Do you have a unique item that you are considering consigning online or with a local auction house?
October 27, 2016
If so you’re in good company. Everyday thousands of Americans find themselves in your exact situation. Life changing events such as a new job out of state, a marriage, a death, or the downsizing of a household, leave us asking “What do we do with our unique or valuable items?”
If you’re considering consigning and are new to the process, this guide is for you. We’ll answer the following questions and many more below.
- Isn’t there a service for this type of thing?
- What does the consignment process involve?
- Who can help with consignments online or at an auction house?
- What should you expect during the consignment process?
- How much time and work are you going to have to put into selling your item?
I’ve written this guide for those of you who are looking for some help in determining if consigning your unique item is a good fit.
Considerations Before You Decide to Sell
Where can you sell your items and be confident about your decision to sell?
Auction houses have reputations. They are typically well-respected high end businesses, not just your run of the mill pawn shop or antique store. If you really want to be confident in determining the value of your item and eventually selling it, check out their reputation. A few ways to do this include:
Is selling at an auction safe?
The majority of the time, yes. It comes down to the auction house you are using. Make sure you check them out. Going back to that credibility component. Also, if payments are being made online, be sure to confirm the site is a secure site. You can do this by checking the site url and making sure it begins with https://. For additional safety, be sure to contact the auction house and ask about their payment encryption.
Where can you get the most money for your possessions?
Auction experts are going to know if there is potential value for your items fairly quickly. It is also their job to be realistic in regards to the market and what you can expect based on a sale. If you are looking for the “get rich quick” method, or know your items aren’t worth value, don’t waste your time or the auction house team’s time. Be real and establish expectations for your items.
How easy is the selling process?
Inherit the proceeds, not the work. An auction house is here to assist you in the “dirty” work, and most of them do all of the work for you. Once a consignment agreement is reached, the rest of the process is easy as pie. The auction house takes care of the photography, cataloging, and promotion of the item(s). They have the resources and audience to market your item to based on the auction that the item is slated for. They have many target niche buyers based on the interest in items based upon their previous purchases. And most auction houses have quite the reach – some even globally.
Can you change your mind to sell during the process?
Great question. This really depends on the circumstance, what step of the process you are at, as well as the auction house. Just remember once the hammer drops at the auction, the item is sold. Now, a buyer may not pay, so that could change things. Note that at an auction the hammer really sets the “sold” marker.
Is it going to cost you to hire the auction company to sell your item?
Most auction houses do not have a direct hiring fee. Rather a seller commission is collected once the item is sold at an auction. The commission rates vary based on the value and type of property chosen to sell, typically ranging anywhere from 5%-30%. However, it is very common practice to see a seller commission attached to an item for auction so don’t be surprised by this. It’s standard. If you don’t find yourself paying a commission, be cautious as there may be other hidden fees throughout the auction process. There may be a sale-related fee which includes the cost of Liability for Loss or Damage while on the premises, charges for unsold items that are left on site, catalogue photography and property transport. As well as additional charges for shipping and packaging, if you have agreed to them beforehand. Refer to your consignor agreement to make sure you understand the structure fees specifically.
Is your item guaranteed to sell?
Unfortunately no. The market and turnout at an auction really dictates the outcome. There is a reserve that can be placed on your item to help determine a minimum sale price, so should that price not be met-the item is returned to you. We all have a threshold, right?
Can your item be worth one thing one day and another the next?
Absolutely. This is based on the market supply and demand. Gold and silver are common items that fluctuate in the valuables industry. Just because you receive $3,000 for an item today doesn’t mean it won’t be worth $5,000 the next. It also doesn’t mean that it won’t be worth $2,500. Things can go up, but they can also come down. It’s the risk taken in the valuables market.
What do you know about the piece?
Are there markings or signatures on the pieces that warrant interest? Do you know the origin of the piece? What about the year or date? Document all information that you think you know about the piece. The auction house will be eager to receive any information as it helps to meet expectations, as well as see what is factual or just information passed on – may it be relevant or not.
How do you know you are getting a fair estimate?
With years of experience and detailed knowledge of current market trends, auction specialists have the authority to give accurate valuations of items. Look for certified appraisers of personal property with the CAPP designation from the International Society of Appraisers (ISA) as well as USPAP certification. The CAPP designation is the highest level that the ISA bestows upon its members.
Taking the Leap
The consignment process isn’t perfect, but it’s worth it for those who really want to part with their items.
Auctions are based on a bidding process with the highest bid receiving the win. This means if someone really wants your item and is willing to pay anything for it, it could easily go above market value. It’s not just about who is in the room during the live auction. Bidders can come from all over the globe, which makes the auction industry exciting for sellers, you never know who made the phone call bid before the auction began or who is bidding online.
We mentioned that the auction industry can be a risk. Of course, your item may not sell at all. However, maybe it didn’t reach your reserve, which is the minimum threshold you set so your item doesn’t sell for less. Therefore, you still get to keep it and that is what you wanted. It is a decision you made. According to The Magnusson Group, roughly 20-30% of the objects up for bid don’t sell right away.
This Way to Sell
So, an auction house sounds like it could be a great place for you to go for all the changes in your life discussed above (acquiring new heirlooms or downsizing). However, you know nothing about this industry. Where can you find some information on the basics? Terms? Questions to ask? FAQs? Etc.
- Great article! Thanks for all the tips and information on how to proceed with consignment! – Dan S. ☆☆☆☆☆