Don’t Resign Your Auction to Consignment Lots

Don’t Resign Your Auction to Consignment Lots

As a result of the downturn in the economy, many events are finding it more difficult to get auction donations. In many cases the number of donations has declined, or the quality of some of the donations has declined. Still wanting to fill their auction with good lots, many events turn to consigned auction items as a way to round out their auction.

Do your research before adding consigned auction lots to your auction. In most cases you can get better deals on your own, if you are simply willing to do the legwork. These days many hotel properties are struggling to stay at capacity, and are willing to make deals if you deal direct. But in many cases, you don’t have to look very far to find ways to do better than the consignment companies.

Let’s take a couple of offerings from Winspire, for example. Originally the Gavel Group, Winspire has grown to now offer items across thirteen categories. One of their packages is the “America’s Cup Stars & Stripes Experience in San Diego 4-Night Package with Airfare for Two” which they value at $5,618.00 and sell to you for $1,750.00.

The package includes round-trip coach airfare from anywhere in the U.S. on American Airlines, four nights at Hyatt Regency Mission Bay Spa & Marina, and a 150-minute sailing experience on Dennis Conner’s Stars and Stripes. The first time I encountered this lot, I thought the value must really be in the sailing experience. Not so.

Anyone can sign up to sail on the Stars and Stripes for $99 per person. Anyone. All you need is a pulse and a credit card.

The Mission Bay Hyatt? $255per night at the height of the season. So far, this $5,618.00 package has an actual cost of $1,455.00!

I haven’t got to the airfare yet, and as a company we firmly believe that unless you get first class airfare donated, you shouldn’t bother purchasing it. In this case, $300 for two round-trip tickets to San Diego would be a good deal for the East Coast, a poor deal for anywhere SouthWest flies.

If you wanted to assemble this package yourself, you could purchase the exact same lot, sans airfare, for less than Winspire wants to sell it to you. Furthermore, a surprisingly large number of auction lot winners never actually redeem their lots. One event we asked to track the data reported that 45% of their winning bidders did not redeem their getaways purchased in the live auction.

If you sell a Winspire lot, you have to purchase the certificate as soon as the auction is over. If your bidder doesn’t redeem the trip, Winspire keeps the money and your event is out the cash.

We’ve discussed this with them back when they were the Gavel Group, and they refuse to budge. Small wonder for every time an auction bidder doesn’t redeem a lot, Winspire makes pure profit. Profit that your bidder assumed was going striaght to your cause when they made the bid and opted not to take the trip.

One other big package they are currently offering is the “2009 Super Bowl XLIII in Tampa Package includes 3-Night Stay and FIRST/BUSINESS CLASS Airfare for Two” at a cost of $19,000.00 to you. Included in the package is round-trip, first class airfare on American, three nights at the Ginn Reunion Resort, and two tickets to SuperBowl XLIII.

The Ginn Resort is, as of this writing, offering villas for $279 per night, with many still available. SuperBowl Tickets have hit a 15-year low, and are currently reselling for as low as $1,500.00 per ticket. The same section Winspire offers is currently at $1,800.00 per ticket. Total cost so far: $4,437.00, not counting airfare (anyone want to hit the SuperBowl next weekend?). If you were to simply sell this package on your own, without airfare, you’d immediately save $15,000.00 off of what Winspire wants to charge you.

To be ultimately fair to Winspire, I opted to research first-class flights, less than one week from the date of flight. American Airlines wouldn’t quote a fee, but I found unrestricted first-class on United for $1,600.00 per person. Meaning that you could put that package together for $7,637.00 on your own – at a savings of more than $11,000.00 off of Winspire’s price.

To make matters worse, there are auction companies out there that purchase lots from Winspire and then resell them to auctions for a significant profit. One auction house offers the Stars and Stripes package to events they work with for a cost of $3,000.00. I know because one of my clients hired them to do a silent auction, and this other firm “offered” to consign a Stars and Stripes package for $3,000.00 into the live auction. My client agreed before doing any research on the lot (or turning me loose to look it up). When I compared the write-up the firm provided me to the .pdf available on Winspire’s web site, they were exactly the same, word for word.

I understand the need to make your auction better, and encourage you to follow our guideline of 1 to 3 when spending money on an auction lot. I’m convinced that there are even better deals to be found out there than the above examples, which were researched solely online. A quick call to the Hyatt in Mission Bay, for example, may yield significant discounts.

The point being, do your research. If an auction lot being offered for consignment seems over priced or too good to be true, it probably is.

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