Education & Training

Before the Auction: Keeping Records

Though it has been said that a clean desk signifies a sick mind, there's no room for clutter in the records of top auctioneers. Proper pricing, enticing titles, and an effective listing style are crucial to success, but not any more so than an effective system for tracking auction sales, bidder information, and other important auction-related data. Here are the essentials that will help you order your business and assist you in staying ahead in the game.

Get a New Plan, Stan

Everyone organizes records differently. You won't find a best way to manage your auction data. However, when devising a record-keeping strategy, consider these steps:

  • Make your method consistent so that it can be used for both high- and low-volume auctioning.
  • Make it simple so that you won't quickly abandon it. Remember, it's easier to build on a simple system than it is to fumble around with a complex one.
  • Keep it efficient. Don't keep every bit of data. Go only with the information that you directly will need in the next year.

Furthermore, you can find many tools to help manage your auction records. You can choose paper records, spreadsheet or database software, an onsite My Auction page, or an auction-assisting third-party software package. But whichever tool you choose, be sure you're comfortable with it. And make sure that you can properly store such records, either physical or electronic, and that you have a backup or recovery method, just in case.

Now Playing: The Records You'll Most Likely Need

OK, but what data should you keep? Here is a general overview of the kind of information that will serve you well in your auction endeavors:

  • Your products, the price you paid, the high bid price, and the selling cost.
  • Your high bidder's name and other contact information.
  • The dates of your auctions and other supporting transaction dates with the buyer.
  • Any email correspondence.
  • Method of payment you received.
  • Method of shipping you received, and any tracking numbers.

Surely, you'll think of other useful information for your records, but the aforementioned data will suffice for income tax, customer/client base, and follow-up purposes. Your litmus test should be that the information is useful and conclusive for at least a year.

The Need for Speed

Who has the time to dig through reams of printed notes, receipts, and so on? Spending too much time looking for something means lost opportunity, plain and simple. Keep your auction records handy.

Establish a filing plan, be it hard copy or electronic, and stick to it. Use clearly marked files to store and retrieve information. Moreover, your ability to respond quickly to buyers' questions about a transaction will head off trouble and increase their confidence in you.

Someone's Been Sleeping in My Bed

Just a quick note: Be sure you have exclusive access to your auction records. Don't let someone else in the house unwittingly reorganize or disrupt your organizational system. And, if you work with a partner, make sure you both agree on how to organize records. Also, you'll both need to discuss any changes.

The Taxman Cometh

Don't forget, auction income is taxable. So, if you're not convinced that you need to keep good sales records, the prospect of a tax audit should be all the motivation you'll need. Be sure to have a tax advisor recommend ways to maintain proper sales information. Although you can choose not to claim your auction income, remember as online auctions rake in billions per year don't be surprised if someone comes knocking on your door.

In Times of Trouble

Remember, too, good auction records can help unsort a snag in a transaction. For example, a buyer might contact you weeks or months after a deal closed. For whatever reason, the ability to quickly present detailed records and accounts of the transaction will be your best tool in proving that you held up your end of the bargain.

Your Customer Base

Any good businessperson will tell you that a strong customer base can help ensure long-term success. Avoid using your customers' contact information (address, email, phone number) irresponsibly or inappropriately. Keep track of your buyers so that you can recognize a good repeat customer or a potential deadbeat. Keep track of anyone who expresses interest in your products. The Internet is ideal for such tracking. Close tracking can leave both you and your customers satisfied.

Dennis Prince is the author of Online Auctions at eBay: Bid With Confidence, Sell With Success. He has been an active buyer and seller at various online auction sites since 1995. Send him email at dlprince@bigfoot.com.