Bargain hunters are flocking to auctions, as tough times push
more businesses into liquidation.
Bargain hunters are flocking to auctions, as tough times push more businesses into liquidation.
Jay Sugarman, a consultant with J. Sugarman Auction Corp. in Miami Gardens, Fla., said the number of shoppers visiting auctions has increased at least 30 percent compared with the last few years. And even as inflation has raised the price of many goods nationwide, he said prices for equipment ranging from small plates to large machines sold at auction are down 10 to 15 percent.
“The word auction is still very synonymous with bargain,” Sugarman said. “People are attuned to that.”
Eric Lauro, owner of Lauro Auctioneers in Fort Lauderdale, said he manages business liquidations among other types of auctions. Lauro couldn’t quantify the increased traffic but said people still fly into South Florida to attend local auctions, and interest remains robust around the country.
Personal property and business inventory sold at auction nationwide dipped to $9.7 billion in 2007 from $10.1 billion in 2006, according to National Auctioneers Association spokesman Chris Longly. However, commercial and industrial machinery sales rose to $13 billion last year from $12.1 billion in 2006. Overall, growth in the $271 billion industry has been strong, Longly said.
The number of live auctions held nationwide increased 4.6 percent in 2007, which Longly said signals attendance has been good enough for companies to hold more auctions.
Martin Claire, vice president of Stampler Auctions in Dania Beach, Fla., said auctions are relevant to businesses because it could help them convert assets into cash at a cheaper rate than if the company tried to sell everything individually or through a Web site.
Restaurant co-owner Thomas Valdes was at the July auction of equipment inside the now-closed D. Wade’s Sports Grill in Boca Raton, Fla., to pick up last-minute items for a 210-seat restaurant to be called Trattoria Bella Cibo.
Before the auction, he said his budget was between $500 and $2,000. After winning a bid for more than 1,000 pieces of ceramic plates, bowls and cups for $600, Valdes clapped his hands excitedly and exclaimed, “That’s what I’m talking about. That’s the score of the century. I can go home now.”
He said the plates cost about $5 or $6 a piece, and picking them up all together was a steal. “There’s so many people going out of business, you can get stuff at one-third the price,” Valdes said. “I’m going to take advantage of the sales.”
Hollywood, Fla., resident Bonnie Rudner frequently attends auctions to buy and resell restaurant equipment to her clients. She said auctions can get expensive for attendees if they become excited and overpay.
“A lot of people get carried away,” Rudner said. “They don’t realize how much it costs in a store. Almost everyone who starts out gets burned the first few times.”
Alan Dickson turned to an auction company to close down his Boynton Beach, Fla., hardware store this month. Dickson, owner of Olan International, bought the shop in 2005, but said a perfect storm of Hurricane Wilma and rent, oil and paint price increases have punished his bottom line.
“There’s comes to a point where your employees are earning more than you are, that’s not a good situation to be in,” said Dickson, who decided an auction company could help him move merchandise fast.
Longly said despite the stereotypical image of auctioneers as deceptive, fast-talking salespeople, bid-calling is a small part of the job. But Claire said the industry hasn’t helped itself by tolerating companies with revoked licenses or auctioneers who inflate promises of what goods are available.
Although online auction companies such as eBay and Ubid have grown stronger, Sugarman said that has only helped move the live auction business forward. He said those Web sites help set the market value for a product, but have some drawbacks.
“EBay is truly buyer beware,” Sugarman said. “You don’t get to see it, touch it, smell it, feel it. You’re basing online bidding basically on representations.”
