Into the unknown, part 2

This is the second installment of our two-part series providing a comprehensive overview of M&E auctions and how they operate. 

Tim Roy, our senior M&E appraiser, previously worked as an auctioneer and managed several small business liquidations. Today, he observes the industry daily as an expert, highly experienced M&E appraiser. 

In this post, Tim explains what to look for in a liquidation partner – and what to do if you still need help before moving forward.

How do I choose between liquidation proposals?

Now that you’ve done all of your necessary prep work, you’re ready to engage potential auctioneers and review their specific proposals. As you do, below are some important insights and reminders to keep in mind. 

Remember that you get what you pay for. Don’t automatically choose the lowest commission! A properly conducted liquidation can mitigate financial and reputational damage to the business owner and lender. Think of it as an investment, not an expense.

Compare apples to apples. Make sure you’re providing each potential auctioneer the same details and information – and that you’re requesting the same details in each proposal. This enables you to make objective comparisons 

Ask the tough questions. Don’t hesitate to quiz the auction manager. Where are they going to spend your marketing dollars? Which items will be itemized and which will be grouped? What happens if a buyer doesn’t pay? If their responses are sensible and professional, you will feel much better as the auction progresses. If all they can tell you is a commission and marketing fee, however, then you have no idea what is going to happen – and no way to hold them accountable. That puts you in a very undesirable position.

Do your research. Review the liquidator’s recent sale bills and online listings for professionalism and clarity of presentation. Ask a machinery dealer, workout banker, or bankruptcy attorney for their advice – they interact with auctioneers regularly. If you can, attend one of their auctions. How are the employees dressed? How do they treat buyers?

What if I still need help?

This is the easy part – reach out to us! We are happy to recommend liquidation firms, and we formally advise professionals who aren’t comfortable with machinery liquidations in requesting proposals and selecting liquidators. We understand the fear of liquidation, and we can provide independent third-party input to help mitigate your risk and reduce your stress.