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PostPosted: Sun Apr 04, 2010 8:26 pm 
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Tom,
I have really gotten a lot of info from your post. I need to ask you another question.

You say these Fundraiser auctioneers charge a flat fee. How do most people figure the flat fee. I have put on a lot of auctions and I know what it cost to do one, I just want to know how what is typical.

If I want you to tell me your experience, advice, business model, etc. What ever you will share with me.

Thank You for your Help.
Terry Turner

http://www.BoughtItMyWay.com
and you can see my video and my Auction Business.


Hi Terry,

Thanks for the email and question. As all auctioneers know, the Sherman Act prohibits auctioneers and bidders from discussing pricing openly to discourage collusion. Privately, we can discuss pricing until the cows come home. ;)

Some auctioneers are FREE. I hate that four letter word, and I much prefer the four letter word PAID, as the vast majority of clients will tend to take you much more seriously and place much more value on the expertise and counsel you provide to them.

Some auctioneers still charge a commission or percentage. Some auctioneers even attempt to charge a Buyer's Premium (Buyer pays the cumulative auctioneer fee) in lieu of a commission. I have found that most attendees at fundraisers despise buyer's premiums, as they feel that their generosity is being taken advantage of. The problem with commissions, percentages and buyer spremiums is that national nonprofits such as the American Heart Association, Red Cross, etc., prohibit such contracts and payment by percentages, commissions or buyers premiums in there better business practices. However, there are many smaller charities that will still accept commissions and percentages, believing that they will somehow receive a better bargain. I still chuckle at this mistaken belief. The only problem there is that if the auctioneer is a real firecracker and high achiever then the charity will be paying the auctioneer a handsome check.

When I began my career almost 17 years ago, I had heard stories about walk-on auctioneers (calling the bid for one hour) who charged a percentage and received checks for $25,000 and $50,000 dollars from charity auction events. Those days are gone! Today nonprofits and charities are much more business savvy. They expect results, and want to receive a lot, and I mean a lot, of consulting to help become the number one event in their local community, if not a regionally or nationally recognized event.

For almost a decade I have been a huge proponent of charging a flat fee. I was the first auctioneer in the United States to join the Association of Fundraising Professionals [(AFP) http://www.afpnet.org/]. Their Code of Ethics prohibits professional fundraisers from charging a percentage or commission, and allows charging only an hourly rate or flat fee. There are even certain states (i.e. Virgina and Massachusetts) in which it is illegal for professional fundraisers to charge percentages and commissions. Auctioneers in those states charging nonprofits and charities percentages or commissions are walking a fine line. Even before joining AFP I advocated charging nonprofits a flat fee for almost a decade, as in my opinion it is the moral and conscientious approach to charging charities. Also nonprofits do not like surprises (i.e. mystery invoices based upon charged commissions) being presented to them at the end of the event. I have found that nonprofits and charities like to know upfront what they will expect to pay.

On a side note, I do not recommend discounting your fees as this inevitably creates a sense of entitlement (i.e. Clients wanting more for less) in the client. There are very stringent exceptions in which I will offer discounts to my clients such as when the client signs a either multi-year contract or a multi-event contract. Also in certain cases of travel expense reimbursement when I have a number of events in a specific geographic location. With one exception in my career, the three times I donated services to clients I never received any gratitude, but I definitely received an attitude of entitlement. As my mentor Ed Brown always said in response to someone asking him to donate auction services, "If no one gets paid then I don't get paid!" So the next time the Executive Director, Development Director, Pastor/Minister/Priest, Headmaster, Principal, or even your friend asks you to donate your services, then kindly ask them if they, or anyone (i.e. band, party rental company, florist, sound and lighting technician, or caterer) involved in the fundraiser, are receiving any pay? Enough said. :D

Here's another proverbial question that always makes me laugh. Will you guarantee your results? I look them directly in the eye, and I calmly and confidently state, "Yes I will." Then I continue, "If I provide you with a guarantee, then I will charge you more because you doubt my ability and I will definitely prove myself to you. Also if you want my guarantee, then it will be clearly stated in my contract, along with the provision that you, your committee, and board members will follow all of my instructions." That usually stops the ridiculous question of guarantee dead in its tracks. Anyone ever involved in an preparing for and planning a fundraising auction knows how flighty their committee and board members can be in terms of follow through and adherence to time line and instruction.

Regarding what to charge as a flat fee, I can only say charge what you feel your time is worth and also for the amount you time you will be dedicating to your specific client. It is true that you do get what you pay for. Also your reputation plays a big part in this as well. If you are known to be a producer then nonprofits and charities will gladly pay for those results.

I hope this helps.

_________________
Tom DiNardo - ISA-AM, MPPA
DiNardo & Lord Auctioneers
http://www.DiNardoandLordAuctioneers.com
View our upcoming auctions: http://www.auctionzip.com/WA-Auctioneers/271.html


Last edited by Tom DiNardo: ISA-AM on Sun Apr 04, 2010 9:05 pm, edited 6 times in total.

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PostPosted: Sun Apr 04, 2010 8:59 pm 
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Tom,
Thank You for your GREAT Information. I can figure the cost of what I can provide for an Auction. I know how to promote, organize and do the Auction. There are some items that I would need to work on, but, I can do that too, if a client wants me to handle that.

Do most of these organizations, pay an advance fee, or pay the night of the event, or after the event? I like to be paid a deposit, then the balance the night of the show. May be 50 / 50. Is this normal?

Terry

:D


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PostPosted: Sun Apr 04, 2010 9:13 pm 
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Hi Terry,

I edited my post and added some more information that might be useful to you. In the meantime you asked another great question!

Yes, I do charge a Booking Fee (deposit). There have been three times in my career that a client did not pay me their contracted fee. This situation was immediately resolved when I began charging a Booking Fee. The client's commitment to the success of their event is virtually guaranteed when they have made a financial commitment.

Also I request full payment of the balance prior to the beginning of the event. This also relieves pressure on the client because they are always busy after the event. Further, it finalizes their commitment and gives you your well deserved payment.

_________________
Tom DiNardo - ISA-AM, MPPA
DiNardo & Lord Auctioneers
http://www.DiNardoandLordAuctioneers.com
View our upcoming auctions: http://www.auctionzip.com/WA-Auctioneers/271.html


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PostPosted: Thu Apr 08, 2010 10:43 pm 
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Terry,

Tom likes to type he is much better at it than I am call me 760-505-1256.

Tom is right on with his statements and the way he conducts his business. Just remeber there is more than one way to skin a cat (more than one way to charge)

Before I figure out how to charge a client I have a meeting with them and discuss what services my client will expect of me and then I proceed from there.

Consulting and guiding your client is a great thing just make sure you make the client feel like this event is theres and make sure that they take ownership of there event.

One of the biggest reasons I don't discuss fees is not because of Mr. Sherman even though I am a law abiding citizen, it is because you live in a different region than I do and what the maket will bare for me may not be what it will bare for you. I don't what to give you a figure that is to high or to low you need to do some research in your area or start making friends with the local non profits and other organizations, and other charity auctioneers, also there are different levels of non-profits and not all pay the same.

Call me I will be more than happy to talk to you any time.

_________________
Texas Auctioneers Lic. 16169
NAA member
TAA member
Event and Benefit Auction Company
Contract Auctioneer
Horses & Cattle


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