Auction sale is referred to as the type of sale of goods and products which involves a public exhibition or platform for members of the general public to come and place prices for the goods and products, the person with the highest monetary bid takes home the goods. Nigeria as a developing country is faced with a lot of challenges and one of which has to be a struggling economy. This may be a good thing for auction sales but on a second thought, it might also spell doom. Thus, the pros and cons of auction sales will be discussed herein.
Benefits of Auction Sales in Nigeria
- Opportunity for privatization of governmental industries
Due to the epileptic economy that the country has been faced with, it is not out of place to posit that the privatization of certain government industries has helped to boost the economy. For instance, the privatization of the telecommunication sector has helped remove the burden from the government and at the same time uplifted the state of communication in the country. This privatization can occur in other sectors and the best way to sell most of these areas is via auction. There are a lot of private companies that will be willing to engage in the auction sale process. This way the government can be able to secure the highest possible price which can raise funds to be channeled into other industries while boosting the economy and at the same time improving the lives of millions of Nigerians.
- Faster selling time
Auction in Nigeria can be beneficial to both the seller and buyer due to the fact that it is done within a very short period of time. Traditional buying and selling might take a longer time to find the right buyer due to the fact that there are usually just a few buyers at one point in time. However, at auction, there are a lot of buyers due to the fact that the auction is advertised via various channels before the auction date.
- Goods are sold As-Is
This is a good one for sellers as there are no numerous inspections or repairs to be carried out. There is also no warranty, therefore the buyer purchases the goods based on whatever current state it is. If there is any known defect later, same would be borne by the buyer but the good news is that the buyer may not feel perturbed about this because the goods may have been won at auction at half the normal selling price.
- Improves healthy competition amongst buyers
Auction sale is carried out on a neutral ground devoid of age, race, status or qualification. A level ground is presented whereby anyone can place any amount of bid without fear or favor and the highest bidder goes home with the goods.
Challenges of Auction Sales in Nigeria
- Unlevel pool of buyers
While it is true that the auction process is neutral and competitive one that allows the buyers to freely bid for their choice items, the truth is that not all buyers are level in terms of knowledge of the item in auction and finance. For instance, in a real estate auction, buyers are usually prequalified for financing before placing a bid, thus most buyers tend to be value-oriented and savvy and know when to stop bidding but this is not the case for a normal buyer who would rather attach more emotional sentiments thereby not knowing when to stop bidding and at the end of the day, probably pay more for a lower quality.
- Lack of publicity
A public auction sale can never be complete without being publicized. If it is only made known to very few private persons or if it is held in confidence. There has to be proper advertisement to the public( either you Contract a media firm or DIY) about the information of the auction and the starting and closing date of the auction process. Most auctions in Nigeria are not advertised or made known to the public to come and place their bid. This way, very few buyers show up and usually buy at ridiculous prices at the end of the day.
- Lack of IT knowledge for Online Auction Sale
Most auctions are carried out on the company or auctioneer’s website. Thus, most of the transactions has to be done online. Most Nigerians are not internet-savvy and might not really understand what is required of them in certain situations. This is a serious impediment to auction sales.
For Auction related issues, you can contact us at Lansar Aghaji & Co.