In international fur business, more than 95% of wild fur is being sold at the auctions. At the auctions, the market demand and furs offer are accurately taken into account and therefore the fair price is set.
The main difference of fur auctions is the need for creating and maintaining the special infrastructure.
Excluding highly qualified officials, who can work with furs, the infrastructure includes:
- cold storage facilities, where fur is kept;
- the equipment for fur sorting;
- the room for inspection and sales.
There are 4 main auctions for fur sales: AC Sojuzpushnina (Russia), Kopenhagen Fur (Denmark), Saga Fur (Finland), Fur Harvesters Auction (Canada).
Preparation for fur auction takes a few steps.
The first step starts months before the forthcoming auction.
The suppliers who are willing to sell the goods at the auction ship it to the auction company’s storage. The auction experts sort and collect the goods according to uniform qualitative features. Sorted goods are divided into lots. Every lot includes goods of uniform quality. Then for every lot is given the serial number, which is catalogued with sort and the number of skins in this lot. The same qualitative lots are set in rows called strings. From every lot or string, a show lot is chosen which must comply with the qualitative features of the goods in this lot or string. The goods are selling from the catalogue as per numbering.
At the same time with goods and lots preparation the experts compile the catalogue of all lots selling at the auction.
In the catalogue published following:
- table of contents with a total amount of selling furs;
- auction conditions of sale, including inspection, sales and price-fixing procedure, the procedure of contract conclusion etc.;
- dates of opening the auction and its duration;
- the place of holding the auction;
- the period for inspection;
- deadline for payment (prompt day).
Auction companies send information for regular and potential customers about the tentative assortment and amount of goods selling at the auction.
The second step is the goods inspection.
The inspection usually starts 3-5 days before the sales. Preliminary inspection is mandatory because according to the auction conditions of sale claims for any kind of defects (except hidden) are not accepted after the sales. Inspection is held in the special rooms where selected show lots are. Customers inspect and make notes of lots in the catalogue and prices for future purchase. Customer may take a look at all lots in the string at will.
The third step is sales.
The sales start on pre-established days and times and hold in the auction hall. It is built in such a way that there is the praesidium with the auctioneer and his assistants on the one side and in front of the praesidium, there are customers. This allows the auctioneer and bidders to see each other well. The bidders face the sign with the number under which the bidder is registered. Moreover in the auction hall, there are installed screens which are broadcasting the lot number for selling, the catalogue page and the price of the last sold lot.
The auctioneer is bidding and his assistants are monitoring the customers who exactly offer the price for this or that lot.
The bidding is held in English at the international fur auctions. The auctioneer announces the lot number for selling and starting price which considers being approximate market price. The bidders offer their price by lifting hands and the auctioneer continues raising the price until there are offers. After that, the lot is sold for the bidder offering the highest price.
If several bidders offer the same price and do not agree to raise it, the decision making power remains with the auctioneer. Herewith the bidder who has bought the first lot in the string and is willing to buy at the same price other lots of the string is given preference. Some controversial situations sometimes happen, e.g. when the bidders almost simultaneously signal by the head nod, «yes»-shout or raised hand about buying, the assistants will tell who has bided more swiftly.
In case there is no demand for a lot, i.e. nobody of bidders is interested in this lot, the auctioneer gradually lowers the price till definite set limit after that the lot will be withdrawn. Price rise and fall go according to certain time gaps – bids.
Sales duration depends on the assortment of offered lots, bidders’ reaction rate.
At the end of sales, the top-lot buyer is congratulated with the best lot purchase and handed over the named certificated.
The last step is making the auction deal and dispatch goods to a buyer.
During the sales or after the auction managers provide the list of uninvoiced lots for buyers.
On receipt of the protocol of sales results, the auction company makes out an invoice which the buyer pays through pre-agreed banks.