Auctions Will Be The Second Epidemic
Kenny Lindsay, CAI
The novel SARS-Cov-2 coronavirus that emerged in the city of Wuhan, China, has quickly become a massive scale COVID-19 epidemic that has spread and is ravaging more than 171 other countries.
In the United States of America, many state and local governments have ordered citizens to “shelter-in-place” while prohibiting all ‘non-essential businesses to close their doors to slow the spread of the highly contagious disease.
The federal government is leveraging all resources in an attempt to bring together government and private industry in a collaborative response to corral CODID-19 by providing relief to citizens and health care workers.
The unprecedented economic prosperity this country has enjoyed over the past three years, along with the lowest unemployment record in the past 50 years, was great while it lasted. Nobody saw the sniffling big bad wolf that huffed and puffed, and in one fell swoop has caused what many economists are saying to be the most catastrophic hit the United States has seen since the 1920’s Great Depression.
A crisis indeed. And crisis moments also present opportunities. Don’t let a crisis go to waste.
The professional auctioneer must be mindful of the fact that that the auctions have proven themselves to be arguably the most resilient professions of all-time.
History has shown that auctions not only survived but, in some cases, flourished during unimaginable world events. The collapse of the Roman Empire, Civil War, World War I, the Great Depression, World War II, Recessions, and who could forget Sept. 11, 2001?
While the world is bracing of a future of uncertainty – one thing is sure, for many auctioneers, it is the calm before the storm.
Eventually, this 21st version of the Black Plague will slowly lift. Soon everyone will crawl out of their Coronavirus bomb shelter and access the damage. For many, the fallout will be significant, cash flow is low, and the decision must be made for them to liquidate assets to reposition themselves for the future.
While most everyone is negatively affected, many service-related industries will be terminally hit.
Professional auctioneers should prepare to serve specific businesses such as
Wellness: Spas, Gyms, Salons
Food & Beverage Services: Restaurants, Micro Breweries, Bars
Professional Services: This is a vast area, but auctioneers will be fielding a record amount of inquiries on liquidating office and business equipment
Retail Outlets: Non-essential retail outlets such as Bowling alleys, skating rinks, arcades, amusement parks, trampoline parks, fairs, arts and craft facilities, aquariums, zoos, escape rooms, indoor shooting ranges, public and private social clubs, and all other places of indoor public amusement.
Manufacturing: According to Market Watch, United States factories are likely to close due to the Coronavirus supply-chain shock. “Already, manufacturers are grappling with disruptions to their businesses due to the COVID-19 outbreak, with many anticipating financial and operational consequences—even before some of the developments of this week,” said the National Association of Manufacturers President and CEO Jay Timmons. A newly released survey of manufacturing leaders conducted by the National Association of Manufacturers reveals the state of the industry as the Coronavirus situation unfolds.
In the survey, which was in the field from Feb. 28 to Mar. 9, 78.3% of respondents say that the COVID-19 outbreak is likely to have a financial impact on their businesses; 53.1% of manufacturers are anticipating a change in their operations in the coming months, and 35.5% say that they are already facing supply chain disruptions.
Another factor worth noting is in 2018, the Survey of Household Economics and Decision Making learned that an alarming 40% of Americans would have to borrow money, sell something, or neglect other bills to pay for an unforeseen $400 expense. In other words, at least 4 of 10 Americans were living paycheck to paycheck in a recently thriving economy. Today, the economic outlook darkens daily, and it is reasonable to assume a staggering amount of Americans will be relieving themselves of leisure type of assets such as boats, motorcycles, and collectibles.
Professional auctioneers should not assume that the first call a potential seller is an auctioneer. Sellers have many options. Those not predisposed to auctions are likely to seek other selling avenues.
Position yourself to educate potential sellers why a professional auctioneer is likely the best avenue for them to maximize their financial outcome. Have you encountered a disheartened seller that learned how an auction would have been a better choice after the fact? That is an epidemic itself.
It is for this very reason that professional auctioneers should constantly be promoting auction success stories on social media and beyond, hence the reason and successes of the Auctions Work! campaign that has been adopted by countless auctioneers nationwide.
Adopt the campaign and start educating sellers about the power of the auction method of selling. For some examples, visit www.AuctionsWork.org
Now is the time to reach out to the bank’s Loss Mitigation department, bankruptcy and divorce attorneys and pay close attention to your local news and stay abreast of developments happening right under your nose.
In the meantime, make it a priority to invest in Facebook and other marketing. Establish a Google Business Page and start canvassing your community and local Chamber of Commerce on how you can be the beacon of hope for those that are facing stressful decisions at this very moment.
THE AUCTION PROCESS GOING FORWARD
Hall of Fame auctioneer, Rick Montgomery, CEO of RJM Auctioneers in Plymouth, Michigan, said, “Auctioneers need to sit down and think what their plan is. I think within three months, business will be going gangbusters.” He added, “Online auctions are essential in the beginning. People are going to be skeptical of being in large crowds over social distancing.”