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Sid doesn’t bid at many auctions, but he visits many of them with a truck and a large supply of cash. When overenthusiastic bidders buy all-cash items and then come up short, Sid helps them make up the difference. He holds the item for thirty days for the bidder to redeem by paying back the loan plus a stiff interest charge. If they pay off their loans, Sid makes a tidy profit on the interest. If they don’t repay their loans, he does even better, because they lose their purchases to Sid, who occasionally holds a sale of his own.

Sally couldn’t afford to bid at bankruptcy auctions, so she hired herself out as a “finder” for other investors. She visits the bankruptcy court and goes through all the records, then notifies any of her clients of sales that might interest them. Whenever her clients make a successful bid on items Sally alerted them to, she receives either a finder’s fee or a share in any eventual profits.

Derek is only fifteen, but he’s already learned how to profit from auctions. He attends four police auctions a year and buys all the bicycles he can get for 20 percent or less of their value. He repairs any damage, paints, and replaces missing parts, then sells the bikes to school friends. Derek estimates that he can buy and repair a bike worth $200 for an average of $60, then sell it for about $120. He’s made $2,500 this way each of the last three years, and now he plans to move up to restoring old cars for larger profits.

Lillian enjoys auctions as a hobby and particularly likes antique jewelry. She became so good at bidding for it that a specialty stare made her their buyer on commission. The store pays Lillian’s expenses to ViSit auctions within a three-state area and gives her a cash drawing account to buy with. When the store sells her pubes, Lillian receives $5,000 a month working weekends.

George and Faye found their retirement income didn’t stretch to permit the kinds of nice gifts they wanted to give their grandchildren. Then they started attending auctions and finding bargains in children’s clothes and toys. They showed their good buys to their friends, and soon other older people who lived in their apartment complex started asking George and Faye to shop for them, too. When the couple made good buys on gifts for their friends’ grandchildren, almost everyone insisted on giving them a few dollars extra for their time and trouble. The local paper published a feature article about George and Faye, and these days the additional money they take in from their “shopping trips covers the cost of everything they buy for their own family and helps them buy a few luxuries for themselves as well affect your final profit. If you plan to do any advertising, find out in a,_ what the charges are for that kind of ad. Are you going to run a flea market stall? Loam what space rents for, and ask if you can get a discount by reserving for several weekends at once. You might want to rent store space and run your own discount outlet. Figure up the charges for rent, insurance, business license, taxes, and any other costs of doing business in your city. Don’t forget you’ll need a sign, and you’ll probably want to do some advertising. Decide whether you want to hire anyone to help you keep the store open; in addition to wages, you’ll have to pay Social i; Security contributions, state disability and unemployment contributions, and the employer’s share of any benefit programs. For those who want to issue fliers, don’t overlook the costs of doing business this way. You’ll have to pay to get your fliers printed, and if you want something fancy, typesetting and artwork will add to your costs. (Many computers run graphics programs now; if you already have a computer and are interested in learning the programs, this can substantially cut the costs of producing your fliers.) Then there’s distribution: Are you going to put these fliers on windshields in the supermarket parking lot, hire someone else to do this, or send them through the mail? When you use the mails, you may have to rent mailing lists look in your phone book Yellow Pages under “Direct Mail” for companies that rent lists and you’ll certainly have to pay postage (ask at the post office about low third-class rates). If you’re going to fill orders through the mail as well, you’ll need containers to send the merchandise in, labels, tape, and again, postage. Once you have a fair idea what your overall costs will be, you’ll be able to make judgments about the price you can pay for items and still make a profit. My advice is to keep your overhead as low as possible, unless your actual long-term goal is to own a store or go into the mail-order business. My own preferred technique is to start out very small, with minimum costs. This might mean yard sales, flea markets, or running low-cost ads in local newspapers or “shoppers,” those little giveaway papers that are almost all ads. As you move up to higher-priced items and build a network of contacts, you can concentrate on some of the luxury goods, advertising in outlets that appeal to the buyers of your special bargains. Like Don, you might do some brokering or even specialize in finding bargains for others, for a fee. Never lose sight of your final goal, whatever it may be; but if it’s becoming as wealthy as possible in the shortest possible time, don’t get bogged down in running a business that isn’t your dream job. Instead, use all these opportunities as tools to generate the capital that will take you on to the next step, where you can find larger opportunities to generate even more capital. Finally, here are two points you need to be aware of when estimating profits and planning what you can sell after an auction purchase: 1. Auction terms or conditions may change right up to the time the sale starts. Don’t think that just because you attended several previous auctions and the preview for this one, you know all about how a sale is being run. Always check for bulletin board notices or handouts when you come in, so you won’t be surprised by unexpected changes. 2. Many auctions place restrictions on the sale of liquor. These vary from place to place, but in general you can only buy liquor for your own personal use, unless you happen to be in the liquor business and have the correct licenses and permits. If you do have the necessary paperwork to resell liquor, you must show it. In addition, you’ll probably be required to pay state and local taxes on your purchase, which won’t be included in the auction price. And, of course, you must be of legal age to purchase liquor. As you learn your way around the auction circuit, you’ll probably hear about more small local auctions held by private companies or individuals. That’s great. Just remember that the rules may not always be quite the same; check them out before you bid. Small or private auctions may not hold a preview before the sale and may not supply you with a catalog. In that case prepare yourself by arriving early enough to inspect the merchandise before the bidding starts. Carry a small notebook with you and write down the lots you’re interested in and the maximum you’ll bid for each. If there’s no chance at all to view items before they go on sale, you should know your market well enough to be able to make fast decisions on how much to bid.

 When you plan to bid on high-ticket items at auction, line up credit in advance so you’re ready to move when an opportunity appears. Homeowners could borrow on a home equity loan (HEL), then hold the money in a special interest-earning investment account until time to buy. Alternatively, save the interest payments on your loan by simply not drawing out the money until you need it for the auction. AUCTlON SUCCESS FORMULA 1. Decide on the top price you’ll pay before the bidding starts. a. Figure the asset’s market value and fast sale value. b. Refuse to bid more than your top price. 2. Have a plan in mind for what you buy. a. Estimate your monetary gain plus the amount of effort it will take to sell at a profit. b. Make a list of likely buyers. 3. If you don’t have enough money to bid on an item, form a partnership with another person or group of people. Do Your Homework Becoming a skilled auction buyer means acquiring knowledge and doing your homework. Before an auction even starts, you should know what kinds of items you’re going to bid on and what kinds of prices those items usually bring. If you’re going to bid on handmade Oriental rugs, for example, you should know what qualities to look for in these rugs. How do you tell if one is in good condition? How does size affect price? What about age, color, texture, or national origin? Is the market for Oriental rugs going up or down? If rugs interest you, it’s worth your while to do your research before you even arrive at a sale. For this reason, I recommend starting out with items that already interest you. If you like rugs, for example, chances are you already know a lot about rug prices to begin with. Plus it’s always enjoyable to learn more about something you’re interested in. How do you start your research? There are several ways to find what you need to know about virtually any subject. Check with your local library. Chances are good that your librarian can come up with books or newsletters that deal directly with your area of interest. Museums and retail stores can be good sources of information. Local colleges and universities offer courses in many fields and might have a class that’s directly suited to your interest. And, of course, just by attending auctions you’ll meet other people who share your interests. Get to know them. You’ll find new friends and possibly even partners. The more you read and observe, the more you’ll learn about your field of interest. As your experience increases, you’ll become better able to make accurate assessments of the values of items you see at auction. You’ll be able to decide what an item is really worth and the maximum price you can bid and still make a profit.

Larry knew a lot about cars and their prices both new and used. He decided to profit from this knowledge by trading one item of value for something of equal value, while building in an advantage for him. He bid $2s,000 for a Rolls-Royce at a customs auction. Three weeks later he traded the Rolls for a piece of real estate worth $50,000 the market value of the car. Don’t let your auction career be cut short because you don’t have enough ready cash to begin. Why not form a partnership with one or more people who have cash to invest? Plenty of people are interested in the profits that can be made at auctions, but they lack both the skills to buy intelligently and the time to invest in acquiring those skills. Your knowledge of the field can provide benefits for them, because you’re much more likely to make intelligent and informed auction purchases than they might. Your special expertise gives you the leverage you need to negotiate a mutually profitable partnership with other potential investors. You profit by having more cash to buy items; your partners profit because you’re more likely to make intelligent choices at the auction and the subsequent resale. Everybody benefits.

In San Francisco a large corporation closed down its regional headquarters and auctioned off the contents of a block-long, seven-story office building. One man bought over a hundred metal desks for $5 to $10 apiece. He planned to sell them to a store that specializes in used office equipment and pays its suppliers an average of $35 per desk. On a hundred desks, with an average price of $7.50 each, that was a profit of S2,750 for a morning’s work”and the store even sent its own truck to pick up the desks.

Early in your success program, start puttmg together a winning team, a support group to help you reach your goals. Surround yourself with positive, optimistic people who help you celebrate your achievements and cheer you when you’re discouraged. Gather names of competent, reliable attorneys, accountants, and other experts you might consult, and interview them so you’ll know whom to turn to when you need advice.

To find candidates for your personal team of expert advisers, ask others who are active in the field that interests you. For instance, if you want to market an invention, you might attend an inventors’ convention and talk to as many attendees as you can, particularly those who have already achieved some success. Admit your ignorance and ask who helped them with financing, filing patents, and other details. Then ask if they were pleased with the help they received or if they think someone else would have done a better job.

When you collect names of three or four people who receive good recommendations, interview these people. Describe what you want to accomplish and the assistance you require from them, and evaluate their answers. Look for those who understand you and your goals and who display a broad knowledge of the field and a confident attitude.

their needs. Economic situations fluctuate, markets shift, new trends emerge as old ones die out. What worked last year, or last week, may be disastrous tomorrow, as many blacksmiths and livery stable owners learned when the automobile became popular in the early days of this century. Those who thought of themselves as part of the transportation industry moved with the times, installing gasoline pumps and learning to repair engines. They prospered while competitors who believed they were in the horse business complained about hard times and looked for other work.

For a more recent example, look at the way certain fast-food chains have changed in the last few years. McDonald’s and Burger King rose to success with hamburgers, but in the 1980s Americans became more concerned with their diets. Today the big names in hamburgers include fish, chicken, and salads on their menus.

You can’t jump from one endeavor to the next so quickly that your plans don’t have time to mature or projects begin to deliver their

When you need office space but can’t quite afford it, look for someone else in the same position and share an office. Or find an existing business that doesn’t need all its space and ask to use part of that office. Or lease more space than you need, then sublease some of it to another business.

Rent out unused rooms as storage space. Offer mailing services in addition to your regular business: postal boxes, UPS, and express mail pickup and delivery. (Sell stamps, envelopes, wrapping paper, tape, and other supplies.) Offer copying and fax service. Run courier, secretarial, and telephone answering services from your office either hire the people and direct the business yourself, or let people who want to start these businesses operate from your address.

Rent your entire space during non business hours to another operation, or start one yourself: tutoring, computer training, hobby classes, counseling services, evening telemarketing or collection operations, part-time tax and accounting services, small seminars and meetings, and so on. Talc to people in your community for ideas on needed services and think about how you could accommodate one or more of them.