I posted in response to an earlier posting about actions. The post I was directly responding to was about a guy that had $3000 dollars of stuff at an auction. Some of it did not sell and was stolen after the sale. The rest only brought a few hundred dollars. My original post was about how I learned long ago that it was up to me to protect my interests in any type of sale transaction including an auction. So if it is worth selling then it is worth going and watching sell.
The instance where I "paid" for that education was the sale of a fat steer. I sent a fat steer to the sale barn. I only had the one ready. A friend took mine in when he was taking a few of his. I got a check for only $350. They used a fake health issue to buy my steer at a low price. I would bet that the steer never went through the sale ring. Guys that where at the sale did not remember the steer selling in the ring. Then the yard owner sold the fat steer in a pen full later. At his fat steer sale very few of the total fat steers went through the ring. They would have the larger lots in separate pens and the buyer would bid on the total number of head in the pen.
I also told about how the owner of the sale barn would buy groups of calves while the order buyers would lay off them for him. He then would split the calves up and run them back through the sale barn. He made a killing on them. Through a crooked sale in my opinion.
Dave II then posted about me making a difference if I was the seller or buyer. He was going back to an old post where he was complaining when someone had bought a lot of local hay and was reselling it at a much higher price because the area was short on hay. He thinks this is wrong. I do not if the original sale was in a fair manner. Meaning one of the people in the original sale did not cheat the other. The original seller asking a too low price when not influenced by the buyer is not cheating.
Back to calf sale I outlined. If the yard owner had bought them in an honest manner. Meaning that he was bidding against ALL bidders then he would not have been doing anything wrong. The trouble was the order buyers , which at many livestock auctions buy the majority of the cattle, would not bid on certain groups when the sale barn owner was bidding on them. Also the yard owner was not the auctioneer he had one hired. He set in the stands not the auction booth. So he was legal as far as the Federal Livestock laws. He was and some order buyers where just cheating the system by laying off bidding against each other at times.
The point that I was making is that if it sells in an honest manner than I have zero problem with what the ending sale price is. Also as the owner you should be there to watch/protect your interest. In the case with my steer I did not do that. So it was partly my own fault for what happened.
As far as Ritchie Bro's auctions. They like to brag about how they have no reserves and no protection. Well when I was sales manager at the last JD dealer I worked for. We regularly sent some high dollar equipment to their sales. They would have us "sign" their agreement. Then they would ask what the minimum would be that you would sell for. IF you think a owner is going to let a 100K piece sell without knowing that it will not bring 10K your are foolish. Never happens that way.
As far as auction agreements stating that the owner can't bid/protect/reserve a piece of equipment. If you really believe that then I have some ocean front property in New Mexico to sell you.
Keith's post on it being illegal for the owner to bid on his own stuff. He is mistaken. The law he is referring to is in the Federal livestock auction rules. The livestock auctioneer can't bid for himself legally. If he has bids from buyers that are not there he can place them. This is how the rule is gotten around. On public auctions for equipment and other stuff he is mistaken. I have seen this battle fought in several court cases. It come down to the owner of the equipment being able to "refuse" the bid amount. There have been several court cases that state that the owner bidding on his own stuff is the owner just refusing the lower bid.
With many sales having Internet bidding you never really know if there is a "live" bid anyway. The guy setting next to the auctioneer with a laptop computer catching bids form the Internet. How does the crowd know if there is really a bid??? Do you think Ritchie Bros can stop someone bidding for the owner on the Internet??? Even in person. They may have to pay the full commission but Ritchie Bros can't stop someone from bidding.
The long and short of it is that it is up to the owner to protect his property. In the post I was responding to the the owner failed in two way to protect his property. 1) He did not attend the sale. So he had no control over what his property sold for. 2) He did not know how the auction treated unsold property. In this case basically let anyone steal it after the sale that wanted too. I would never sell anything at that type of sale. I regularly sell and buy at several monthly consignment sales. All of the better sales are fenced and you don't get equipment out without a paid receipt.
So what do you guys think?? How does an owner protect himself at an auction??? Should he just take what it brings even if it is pennies on the dollar??? Should the owner be able to have a reserve on sale items??
At one JD dealer I worked at we had a large spring Lawn and Garden auction. We had reserves on the higher dollar stuff. We announced that fact before the auction. The items that had reserves had a envelope with the reserve printed on a piece of paper. When the bidding was over the auctioneer would open the reserve. If the high bid was over the reserve then the item sold. If it was not over the high bidder had the option to buy it at that amount. I kind of thought that this was fair way to do it. There was zero buy bidding being done this way. Any of you have better ideas on how to be fair to all and still have some protection for the owner??
The instance where I "paid" for that education was the sale of a fat steer. I sent a fat steer to the sale barn. I only had the one ready. A friend took mine in when he was taking a few of his. I got a check for only $350. They used a fake health issue to buy my steer at a low price. I would bet that the steer never went through the sale ring. Guys that where at the sale did not remember the steer selling in the ring. Then the yard owner sold the fat steer in a pen full later. At his fat steer sale very few of the total fat steers went through the ring. They would have the larger lots in separate pens and the buyer would bid on the total number of head in the pen.
I also told about how the owner of the sale barn would buy groups of calves while the order buyers would lay off them for him. He then would split the calves up and run them back through the sale barn. He made a killing on them. Through a crooked sale in my opinion.
Dave II then posted about me making a difference if I was the seller or buyer. He was going back to an old post where he was complaining when someone had bought a lot of local hay and was reselling it at a much higher price because the area was short on hay. He thinks this is wrong. I do not if the original sale was in a fair manner. Meaning one of the people in the original sale did not cheat the other. The original seller asking a too low price when not influenced by the buyer is not cheating.
Back to calf sale I outlined. If the yard owner had bought them in an honest manner. Meaning that he was bidding against ALL bidders then he would not have been doing anything wrong. The trouble was the order buyers , which at many livestock auctions buy the majority of the cattle, would not bid on certain groups when the sale barn owner was bidding on them. Also the yard owner was not the auctioneer he had one hired. He set in the stands not the auction booth. So he was legal as far as the Federal Livestock laws. He was and some order buyers where just cheating the system by laying off bidding against each other at times.
The point that I was making is that if it sells in an honest manner than I have zero problem with what the ending sale price is. Also as the owner you should be there to watch/protect your interest. In the case with my steer I did not do that. So it was partly my own fault for what happened.
As far as Ritchie Bro's auctions. They like to brag about how they have no reserves and no protection. Well when I was sales manager at the last JD dealer I worked for. We regularly sent some high dollar equipment to their sales. They would have us "sign" their agreement. Then they would ask what the minimum would be that you would sell for. IF you think a owner is going to let a 100K piece sell without knowing that it will not bring 10K your are foolish. Never happens that way.
As far as auction agreements stating that the owner can't bid/protect/reserve a piece of equipment. If you really believe that then I have some ocean front property in New Mexico to sell you.
Keith's post on it being illegal for the owner to bid on his own stuff. He is mistaken. The law he is referring to is in the Federal livestock auction rules. The livestock auctioneer can't bid for himself legally. If he has bids from buyers that are not there he can place them. This is how the rule is gotten around. On public auctions for equipment and other stuff he is mistaken. I have seen this battle fought in several court cases. It come down to the owner of the equipment being able to "refuse" the bid amount. There have been several court cases that state that the owner bidding on his own stuff is the owner just refusing the lower bid.
With many sales having Internet bidding you never really know if there is a "live" bid anyway. The guy setting next to the auctioneer with a laptop computer catching bids form the Internet. How does the crowd know if there is really a bid??? Do you think Ritchie Bros can stop someone bidding for the owner on the Internet??? Even in person. They may have to pay the full commission but Ritchie Bros can't stop someone from bidding.
The long and short of it is that it is up to the owner to protect his property. In the post I was responding to the the owner failed in two way to protect his property. 1) He did not attend the sale. So he had no control over what his property sold for. 2) He did not know how the auction treated unsold property. In this case basically let anyone steal it after the sale that wanted too. I would never sell anything at that type of sale. I regularly sell and buy at several monthly consignment sales. All of the better sales are fenced and you don't get equipment out without a paid receipt.
So what do you guys think?? How does an owner protect himself at an auction??? Should he just take what it brings even if it is pennies on the dollar??? Should the owner be able to have a reserve on sale items??
At one JD dealer I worked at we had a large spring Lawn and Garden auction. We had reserves on the higher dollar stuff. We announced that fact before the auction. The items that had reserves had a envelope with the reserve printed on a piece of paper. When the bidding was over the auctioneer would open the reserve. If the high bid was over the reserve then the item sold. If it was not over the high bidder had the option to buy it at that amount. I kind of thought that this was fair way to do it. There was zero buy bidding being done this way. Any of you have better ideas on how to be fair to all and still have some protection for the owner??
