Auction or private treaty: which route to choose

Sellers often ask us whether they should put assets into an auction or sell them by private treaty. There is no single right answer. It depends on what you are selling, how much time you have and how much control you want over the price. Here is how we think about it.

What each route means

An auction puts your assets in front of every registered bidder at once, on a fixed date, and the market decides the price. Private treaty is a negotiated sale. We find a buyer, or a handful of buyers, agree a price with them on your behalf and complete the sale without the assets ever going into a catalogue.

Both routes can run through us. The difference is in how the price is found and how long it takes.

When auction is the better choice

Auction suits volume. If you have a workshop, a warehouse or a whole site to clear, cataloguing everything and selling on one date is the only practical way to move it all. It also suits assets with a broad market, where many buyers will compete: forklifts, CNC machines, vans, catering kit, racking.

Auction gives you a certain date. If the lease ends on a fixed day and the keys have to go back, an auction that closes a week or two before that date, with collection days after, gives you a plan you can work back from.

It also gives you transparency. Every bid is recorded. If you are a director, a liquidator or a trustee who has to show that assets were sold at open market value, an auction record is hard to argue with.

When private treaty is the better choice

Private treaty suits single high value items where the pool of likely buyers is small and known. A specialist machine, a production line that only makes sense to a competitor, or a piece of plant that would cost more to move than a general buyer would pay. In those cases a quiet approach to the right people can achieve more than an open sale.

It also suits situations where you do not want publicity. A business that is downsizing but still trading may not want its customers reading an auction catalogue of its equipment. Private treaty keeps the sale off the public record.

And it suits sellers who are not in a hurry. A negotiated sale can take longer, because you wait for the right buyer rather than the buyers who happen to be available on the auction date.

The trade offs

Auction gives you certainty of date but not certainty of price. You can set a reserve, but if the reserve is too high the lot does not sell and you are back where you started with less time. Private treaty gives you more say over price but no certainty of date, and the buyer knows there is no competition at their shoulder.

Auction costs per lot are usually lower because the process is standardised. Private treaty involves more of our time per asset and the fee reflects that. We will set both out in writing before you decide.

Using both

Many sales use both routes. We might sell a specialist machine by private treaty to a known buyer before the sale, then put everything else into the auction. Or we run the auction, and any lot that fails to meet its reserve is offered by private treaty in the days afterwards to the underbidders and to anyone who enquired.

This is the normal way to handle a site with one or two unusual items in among the general kit. You are not choosing one route for everything.

How to decide

• List what you have and mark any item you think is worth more than the rest put together. Those are your private treaty candidates.
• Note your hard dates: lease end, rent quarter day, the date the landlord wants the site empty.
• Decide whether publicity is a problem. If the business is still trading, say so.
• Ask us to walk the site. We will tell you which lots we would auction, which we would offer privately, and why.

If you bring that list to the first conversation, we can give you a straight answer at that first meeting.