by Victoria Schlesinger
With the ongoing advancement of technology, online auctions have become a viable and proven resource for the disposition of surplus inventory. For the seller, an online auction exposes surplus equipment to thousands of pre-qualified bidders on a global scale, providing the opportunity to maximize recovery. Additionally, the use of Internet technology for targeted marketing and disposition of inventory provides a dynamic bidding platform that ensures open, fair competition and provides detailed post-sale reporting.


The Search Is On

A crucial part of the online auction process is selecting a service provider that has proven experience in the disposition of surplus materials. The best tactic is to explore a service provider that has a large number of potential buyers already identified. Combining a good Customer Relationship Marketing (CRM) database, effective Internet-enabled marketing/bidding and consistent operating procedures will help ensure the best payback for surplus equipment. Outsourcing to a service provider whose expertise is in material disposition allows a company to focus on its core business. A top-tier service provider will continually invest in technological enhancements to increase functionality and capabilities while delivering comprehensive marketing campaigns to targeted audiences.


Best Practices

Experienced service providers will have developed a series of “best practices” to guide management and operations through an online auction of surplus equipment.


These best practices should include:

• Continuous development and communication with an extensive database of potential buyers
• An active marketing effort designed to draw new buyers into the auction process
• A fully transparent process that is fair to both buyer and seller
• A proven system for ensuring safe, secure transactions between buyers and sellers
• Hosting quality auctions with sufficient breadth and depth to attract active buyers

• A proven online bidding system that is reliable
Once a service provider has been identified, there are several issues that should be addressed to ensure the quality and effectiveness of the relationship. They include:
 • How will the two companies work together?

• Who has authority to do what?
• What are the potential liabilities and who has responsibility for them?
• What specific services are to be delivered and how and when will they be delivered?
• What are the terms of payment?

• How will discrepancies be resolved?
Finally, best practices for online auctions if surplus equipment should include the following key specifics:
• Verification and detailed description of inventory (including photographs to ensure maximum return)
• Proper definition of all sale procedures including inspection, payment terms, release procedures and logistics requirements
• Strategic marketing campaign to build the broadest buyer base (email, faxes, phone calls, mailers, advertising, search engine optimization, etc.)
• Proper sale execution with full customer support (this step is applicable regardless of whether disposition occurs in a single event or over a period of time)
• Post sale support including the collection of funds, facilitation of equipment release, and processing of requisite paperwork (bills of sale, titles, certifications, tax documentation, etc)
• Reporting for inventory, accounting and tax purposes


Summary

Online auctions are a fast, efficient, and compliant way of moving surplus equipment and maximizing recovery. The true level of success will be determined by how well best practices are defined and then implemented.

 

Reprinted from ASSET 2.0, the Investment Recovery Business Journal, Vol. 4, 2008

© The Investment Recovery Association