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 Post subject: Re: Fees
PostPosted: Sat Aug 22, 2009 10:32 am 
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Of course, then there's the other consideration...

The client just wants to know "what will it cost me?". They aren't so concerned with a few more or less dollars, as they are only looking at their budget and what they can show the accountant. (CPAs don't like "unknowns"... just give me the amount, so I can plug it into my spreadsheet.)

What sometimes seem like a better deal, isn't what will land the job. It's not all about the money. Too many folks think that they will get the job, if they are cheaper. While this may be true if your bidding for a government contract, it doesn't effect most other decisions that people make. People will pay for quality, whether it's a product or service, they just have to feel that they are getting what they paid for.

By the same token, why would you price yourself too cheap. If you charge them "$2000 or 5%, whichever is less" and the event didn't bring in the "hoped for" crowd/money, would you feel like you were paid a reasonable amount when you walked out with a $500 check?

We must keep in mind, as a professional, we are still offering a service and should expect to be properly compensated for our time and efforts. Just because you hire a lawyer, it doesn't mean that you'll win your case, but the lawyer will still get paid the same fees for their services, regardless of the outcome. (BTW, most of the large charities also pay for legal services, as well as CPAs, etc.)

So, when it comes to charity events, it's usually better and fair for everyone involved, if there is a flat-fee. The organizer knows what it's going to cost them and the professional knows how much they will be receiving for their services.

BTW, I only charge a flat-fee (plus travel expenses, when required) for charity and benefit auctions.

Jim Ford
Professional Auctioneer & Auction Marketing for the 21st Century

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 Post subject: Re: Fees
PostPosted: Sat Aug 22, 2009 1:03 pm 
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James Ford wrote:
Of course, then there's the other consideration...

The client just wants to know "what will it cost me?". They aren't so concerned with a few more or less dollars, as they are only looking at their budget and what they can show the accountant. (CPAs don't like "unknowns"... just give me the amount, so I can plug it into my spreadsheet.)

What sometimes seem like a better deal, isn't what will land the job. It's not all about the money. Too many folks think that they will get the job, if they are cheaper. While this may be true if your bidding for a government contract, it doesn't effect most other decisions that people make. People will pay for quality, whether it's a product or service, they just have to feel that they are getting what they paid for.

By the same token, why would you price yourself too cheap. If you charge them "$2000 or 5%, whichever is less" and the event didn't bring in the "hoped for" crowd/money, would you feel like you were paid a reasonable amount when you walked out with a $500 check?

We must keep in mind, as a professional, we are still offering a service and should expect to be properly compensated for our time and efforts. Just because you hire a lawyer, it doesn't mean that you'll win your case, but the lawyer will still get paid the same fees for their services, regardless of the outcome. (BTW, most of the large charities also pay for legal services, as well as CPAs, etc.)

So, when it comes to charity events, it's usually better and fair for everyone involved, if there is a flat-fee. The organizer knows what it's going to cost them and the professional knows how much they will be receiving for their services.

BTW, I only charge a flat-fee (plus travel expenses, when required) for charity and benefit auctions.

Jim Ford
Professional Auctioneer & Auction Marketing for the 21st Century


I guess I would tell the client to just write me a check for 2k then if they couldn't figure what I was saying and donate the money less based on the percentage example I gave...


I agree Jim with what you were saying above just playing devils advocate here... I just wanted to dig in more for someone to say what you stated. I think that most charity auctioneers charge a flat fee because they feel the percentage is to risky to run THERE business. Not because of some code of ethics. They would be nervous if the auction brought only 10k and they were handed a check for $500 for all there hard work! So if the auctioneer was paid to 2k in this example he would be getting 20 percent!

Percentage
Buyers Premium
Flat Fee


Anyways, I think the way to get paid is what the client feels is correct for them. Not always how we want things... We are after all in the business to serve the client not us.


http://www.hotauctioneering.com

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Kevin Rutter
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 Post subject: Re: Fees
PostPosted: Sat Aug 29, 2009 2:11 pm 
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Joined: Sun Sep 16, 2007 5:56 am
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You have to have more than one way to be able to charge a client. I also feel that if you are any kind of a business person that you will always put your clients needs ahead of yours and take care of your clients no matter how you charge as long as you are fair about how you do it.

Tom, you know we are brothers but AFP is very single minded on this and that is fine I just disagree with this issue.

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 Post subject: Re: Fees
PostPosted: Sun Aug 30, 2009 3:26 pm 
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Hi Phillip,

No problem on the disagreement with flat fee. It may not be for every auctioneer, however it is important to note that more and more charities and non-profits are insisting on flat fee.

I like Jim's devil's advocate approach even though he mentioned he charges a flat fee.

Kevin offered a though in which he believes that some auctioneers charge a flat fee because they believe a percentage is too risky. The only response I can offer is that my flat fee is not cheap, but definitely appropriate based upon the services my firm provides. I know of many more auctioneers charge far more than I do based upon percentage, as well as the majority of commission auctioneers who make far less, but also offer their client's far less in terms of services offered.

Small Charities conducting small fundraising events prefer percentages. While this may be good for the charity, as everyone as mentioned, a $500 check (based upon percentage) may not cover all of the auctioneer's time.

Large nonprofits always prefer flat fee! If a charity auction has earned at least $200,000.00 dollars, they are NOT likely to agree to pay an auctioneer 5% or 10%. They insist on a flat fee! I have heard stories about auctioneers walking away from charity events with a $25,000 dollar check (based upon percentage), and then that charity never agrees to percentage again.

My advice: Mix and match if you prefer. However, I'm staying with my flat fee.

Continued great success brothers.

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