Types of Auctions

Types of Auctions

SMC, LLC conducts both on-site public auctions with webcast or strictly online public auction sale of assets.  All auction advertising campaigns are custom designed for each sale and are promoted through local, national and international markets depending upon the targeted audience.

The following is a breakdown of the three different types of liquidations and auctions. (Any financial figures stated are for illustrative purposes only.)

Straight Commission Sale:

In a Commission Auction, we charge a percentage of the overall gross proceeds to the seller along with a pre-negotiated maximum amount of expenses for promotion, set-up and check-out labor.

Example:  10% commission paid out of the gross sales proceeds and a budget of $50,000 to cover all advertising and other expenses associated with the sale.
 Net Minimum Guarantee:

In a Guaranteed Auction, we guarantee a specific net return for the sale of equipment. After the minimum, we will receive the expenses for the sale; all proceeds in excess of the guaranteed amount and the sale expenses will be divided, as previously negotiated, between the seller and the auctioneer.

Example:  Our Net Minimum Guarantee for the assets is $100,000 exclusive of any applicable taxes.  After the net minimum guarantee is achieved we would be entitled to $50,000 in expense reimbursement and any proceeds over and above $150,000 exclusive of any applicable taxes and our buyer’s premium the proceeds would be shared by the client (80%) and SMC (20%)

Outright Cash Purchase:

In an outright cash purchase SMC will make a determination on the value of the assets and make an offer to purchase some or all of the assets.  This removes all of the risk from the client as we are responsible for all of the expenses and risks associated with sale of the assets.

Example:  SMC makes an offer of $200,000 to purchase the assets.   A down payment of 10% is made at the signing of the contract with the remainder of the purchase price paid 48 hours prior to the sale.     

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