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 Post subject: Auctioneer Fees
PostPosted: Sat Apr 19, 2008 4:49 pm 
Do you charge a percentage of gross,a flat fee, both or hourly for your charity auctions? I was charging a flat percentage and a lot of non profits were complaining.So I went to a sliding fee scale for percentage of gross and it seems to be doing good. Although some said my flat percentage was a fair price.With the flat percentage I would take out what it costs me to do an event and donate the rest back to the organization.
How do you do it?


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 Post subject: Re: Auctioneer Fees
PostPosted: Sun Apr 20, 2008 4:13 am 
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Hi George,

Flat fee only!

I was the first auctioneer member in the US to join AFP (Assoc. of Fundraising Professionals). I subscribe wholeheartedly to their code of ethics.

Best regards,

Tom DiNardo

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 Post subject: Re: Auctioneer Fees
PostPosted: Sun Apr 20, 2008 5:18 am 
Tom,
Thanks for the input.I will look into some flat fees.
Regards,
George


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 Post subject: Re: Auctioneer Fees
PostPosted: Sun Apr 20, 2008 12:39 pm 
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Location: Adrian, Mi.
This brings up a question I have always had.

Why is it that while for regular auctions, charging a percentage of gross sales for your commission is an accepted practice, if you do it at a fund-raising or benefit auction it is considered to be unethical.

Makes no sense to me. Seems to me work is work and money is money.

Who came up with that and why?

Lyn Liechty, Auctioneer


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 Post subject: Re: Auctioneer Fees
PostPosted: Sun Apr 20, 2008 1:48 pm 
I think if they call you they should accept how you charge as an auctioneer. As far as unethical,I do not see why it would be to charge a percentage.One of the reasons I can see charging a flat fee is so the organization knows exactly how much they are being charged and can figure that into their fundraising budget.
Now with a flat fee I was told by one of my instructors back in auction school to never charge a flat fee. I can see where this would limit you on how much you earn. I know I can work better when there is an incentive.I think most people in general do.
So I think how you charge should be up to you and if both parties are comfortable with it,then it's a go. I also think that a few options for your client on how you charge would be in order.
George


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 Post subject: Re: Auctioneer Fees
PostPosted: Sun Apr 20, 2008 4:21 pm 
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Only from an objective view, I can see that their primary motivation for the AFP policy would be to maximize the gain for the charitable organization. By utilizing a non-commission based hiring practice would allow them to determine their direct costs to the fund raising activities.

However, the down-side for an auction event, would be in case the proceeds did not achieve the anticipated outcome and the proportional costs would therefore be higher than the expected return on investment.

Unless I missed it, I did not see anywhere that indicated it must be a "flat" fee. In which case, I would assume that an hourly rate would also be an acceptable practice. Of course, this could be utilized with a "minimum" rate (such as a "2 hour minimum") in determining the fees that your business would charge. I've used both methods in calculating a charge for services, which you must also factor in your time and efforts for consulting and marketing, if that is part of the services offered vs. only the services of bid-calling.

The important thing to note is that it is not necessarily unethical to charge a percentage, as the AFP tends to promote in its requirements for membership. This is only a viewpoint held in their philosophy and I can see where it could hamper the overall outcome of an organization's effectiveness to maintain costs based on their ability to pay for needed services. Therefore a percentage based commission could be an effective way to meet those needs. By the same token, the auctioneer may not make as much, had he/she used the flat rate or hourly rate, BUT then it may make a difference in getting those small jobs that you may not have otherwise contracted, due to your pricing for services seemingly out of reach for the smaller organizations. Keep in mind, those "big jobs" are few, compared to the small ones and it's usually the small ones that will get you through those times in between the "big" ones.

Keep in mind, there are 1.9 million 501 organizations in the U.S., which includes almost 1.5 million 501(c)(3) which include public charities, private foundations, and religious congregations and another 400,000 501(c)(4) organizations (social welfare/advocacy organizations) such as civic leagues, social welfare orgs, fraternal beneficiary societies, business leagues, chambers of commerce, labor, agricultural, horticultural orgs, social and recreational clubs, veteran organizations, etc. These 501 organizations account for ~5% GNP and well over $250 billion is raised by these organizations each year. Also keep in mind, well over a half-million (550,000+) of these organizations bring in less than $25,000/year. That's a lot of possibilities for the auction industry, as they are more likely looking for ways to increase their fund raising activities, yet don't have a large budget to do so, therefore may not see a flat-rate cost as feasible for their operating budget. However, to hire someone on a percentage basis of proceeds raised may be more palatable to meet their needs.

The AFP has 29,000 members out of 1.9 million organizations, which represents a small fraction of the overall market. So, there is a large opportunity for the auction industry to tap into this market and how you charge for your services is only a product of your own marketing efforts. While I understand the potential reasoning of the AFP, I don't see it as unethical to utilize a commission percentage as a method of offering services. I also know of many businesses (one of which is a friend who owns such a business) that are based on providing funds to charities through the number of donations received (violation of AFP "ethics") and they not only help those charities they sponsor, but provides a good business income for the "for-profit" market businesses that they run. The auction industry is another of those types of businesses and each has to determine their own pricing for their services according to their own business model. I don't see anything unethical about it... it's just sound business practices to offer alternatives to meet the particular client's needs.

Jim

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 Post subject: Re: Auctioneer Fees
PostPosted: Mon Apr 21, 2008 6:50 am 
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Seems to me there is a greater motivation for an auctioneer to do a good job and get strong prices if he knows he is paid a percentage of gross sales as opposed to a flat fee.

I would still like to hear from a few of the auctioneers who specialize in charity or benefit auctions as to why a flat fee seems to be the only accepted method of compensation.

There must be some logic involved, it's just that I am not seeing it.

Lyn Liechty, Auctioneer


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 Post subject: Re: Auctioneer Fees
PostPosted: Mon Apr 21, 2008 8:23 am 
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I apologise if it has been said already, if a charity administers & pays for the advertisement the sale results are not the auctioneers problem. In this case I could see how a flat fee could apply.

I would assume most auctioneers would not want to do it this way for the reason; their reputation is on the line with every sale.

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 Post subject: Re: Auctioneer Fees
PostPosted: Fri Apr 25, 2008 8:08 pm 
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Quote:
Flat fee only!

I was the first auctioneer member in the US to join AFP (Assoc. of Fundraising Professionals). I subscribe wholeheartedly to their code of ethics.



Hey Tom enlighten us on your views of only using flat fee's...

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 Post subject: Re: Auctioneer Fees
PostPosted: Mon Nov 10, 2008 10:17 pm 
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Dayson Engels wrote:
their reputation is on the line with every sale.


This is exactly why I insist not to publish my name or introduce me as anything other than "the auctioneer". I have conducted some great charity auctions. Most have gone very well but a couple were miss managed and guess who gets the blame! "The Auctioneer".

Lyn: I have to say I am a bit surprised with your statement about an auctioneer has more incentive to work harder for a %. I don't believe you would work any harder for % than you would for free.....at a fund raiser. Love you man!

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