ABOUT Guaranteed Minimum
A guaranteed minimum is the lowest amount a client will receive for their material at the completion of the auction. If the auction results are greater than the guaranteed minimum, the client receives the higher price the material realized in the auction but if the material realizes less than the agreed minimum, the client will receive the minimum value agreed upon.
Guaranteed Minimums at Harmers
At Harmers International we see little difference between purchasing collections outright and offering a guaranteed minimum. We lean against guaranteed minimums because they are a disincentive for an auction company to work for the client.
From an auction company’s point of view, the material with a guaranteed minimum has, in essence, been purchased by the auction company at the guaranteed price. Once the price is agreed upon with the client, any incentive for the auction company to “work” for the client is removed. Most auction companies have the right to bid on your material or place a ”reserve” price on your items that they have organized in lots.