Auctions at one time were a way to liquidate or close a horticultural business. It no longer works. You have to have a large pool of aggressive local liquid buyers to make an auction work. That is no longer is possible.
IF a nursery or a horticultural business requires liquidation there is an orderly pathway that will yield the highest return IF executed properly. It requires adequate time (Two Years) to accomplish this task for the highest net return. The speed of liquidation is inversely proportional to potential return. The more rapid the liquidation needed, the less will be returned. Management will be needed. That cost offsets the revenue to some level, but not as much as one would think.
5 Steps to Conduct a Closing or Liquidation
1. Get a clear defined listing in detail of all inventory and equipment. You can't sell what you can't define. What is it, how many are there, the size they are and what they look like (photos). No special pricing on this for now. That will come later. Do the same with equipment.
2. Since this liquidation requires some execution, retain enough equipment short term to harvest premium product. The rest of the equipment can be offered for sale. Not as an auction. Price it. Publicize it. Price it aggressively. There is plenty of public information on the values available. This is what we do; create values on nursery stock and equipment.
3. Offer the most desirable product at nearly full price first. Offer to dig for those high value customers that buy early. Use the company's equipment and hire an experienced dig crew on a contract basis as Piecework. Take Credit Card payments for this. Do not extend credit unless you are very confident you will be paid. Everything changes when a company is shutting down. People stop paying.
4. Dutch auction rules go into effect after the first wave is sold at nearly full price, then less, then less, then less. In a year you will be nearly sold out of desirable product. Then have a LIVE auction for the rest. Aggressive publicity will bring out the buyers. On-line auctions have not proven to work well.. yet. The live auction is where you sell the balance at whatever price you get. In ground, as is, where is. They will have a 6 months to clear off the product they buy. This assumes that happens early in the year.
5. Container goods in liquidation need to be marked at half the price others are selling. Look at a few competitors and create a matrix of prices. Then publicize the inventory at half that price. After 6 weeks drop the price to 1/3rd and last month to 15%. Discard the rest at the end. Start early in the year, February, March, April, May and discard the balance in June. Allow for booking if they pay for it in advance. The carry cost on containers is expensive. You don't want to put them away in the fall. You don't want to pay to keep them weeded and watered during the summer season.
If a decision is made at the end of the year (December), you can expect to be in the process for all of the next year and the spring following. So a decision now means you will begin Fall of 2019, Spring of 2020 and Fall of 2020 for an in ground auction of the remainder. It will require several months to do this well. Then the buyer will be required to have the product off by June of the following year. 2 years from Start of the liquidation to completion. From the time of the decision to liquidate, 30 months. You will need 6 months preparation before publicizing the action you are taking.
We do this:
We have conducted orderly liquidations for lenders, for companies closing, for a man who was terminally ill and in behalf of a lender. You can't game the system. It must be done properly or it will fail. No flat percentage discount can to be applied across the board. It depends on what you have that is desirable to the market that drives the return. Knowing the business makes it work. That's why the people that conducted the liquidation in Northern Illinois that ended so badly.
If you wonder what the likely return would be and the cost to complete the liquidation leading to net proceeds might be, we can help. It's what we do.