Affiliate Auction Overview
Affiliates are independent business people who use K-BID as the venue for posting their auctions online. Affiliates are responsible for all aspects of their business:
- Clearly informing all interested parties (consignors, bidders, vendors, etc.) that they are operating as an independent auction company and are not operating as an agent of K-BID.
- Knowing and complying with all local/state/federal laws pertaining to their business, as well as the assets being sold.
- Maintaining and insuring their auction site.
- Securing their supply lines and developing thorough consignment contracts that detail the requirements and expectations that K-BID and the affiliate has of the seller.
- Producing accurate and straightforward descriptions/pictures/terms and conditions.
- Overseeing all aspects of the operation on inspection and removal days.
- Developing a reliable communication system to ensure interested parties (and K-BID) receive timely responses to all questions/issues/problems.
- Resolving all issues/problems related to their auctions in a timely, professional, and courteous manner.
- Distributing the auction proceeds in an accurate and timely manner to their consigners, the State of Minnesota, K-BID, etc.
K-BID’s future success is contingent upon maintaining a reputation for conducting online auctions in an honest, transparent, user oriented manner. Good reputations are built over time, one transaction at a time. However, damaging a good reputation isn't nearly as difficult or time consuming.
K-BID and K-BID Affiliates need to be vigilant about protecting and monitoring this critical asset, as it directly impacts everyone's bottom line. Affiliates are responsible for developing and following business practices that reflect well on K-BID's reputation. Similarly, affiliates are encouraged to keep K-BID apprised of any issues they become aware of that could have a detrimental impact.
K-BID does not get involved in the details of the business operations of our affiliates. However, if an affiliate’s integrity is in question (usually due to repeated problems with buyers, failure to follow the full disclosure requirements, not paying their consignors), K-BID will very quickly terminate the affiliate relationship.
Descriptions and Pictures
The value of an auction's descriptions and pictures cannot be overstated. Taking the time to write thorough descriptions and take high quality pictures will impact bid prices and will save the affiliate a significant amount of time, by decreasing the number of questions and phone calls from bidders.
The goal of the lot descriptions and pictures is to provide the bidders with the information they need to accurately determine the value of the asset being sold. The more transparent the affiliate makes the descriptions and pictures, the higher the likelihood that they will have a satisfied winning bidder. Descriptions and pictures should be viewed as an opportunity to inform bidders, not to "sell" the asset. Attracting the right bidders (those with a clear understanding of what they are bidding on) leads to successful sales; attracting bidders who believe the asset to be different from what it really is can lead to a No Sale.
A large percentage of bidders will not inspect the items prior to placing bids, despite K-BID's strong encouragement to do so --- which underscores the need for informative descriptions and pictures.
Full Disclosure Requirement
Full disclosure is required on every lot sold. Lots must be described factually, noting all known issues affecting the primary function of the item or appearance.
It is assumed lots published on K-BID are complete, undamaged and in good working order. If a lot does not meet this criteria, the affiliate is required to fully disclose detailed information about the specific lot being sold.
- List of missing parts
- Asset damage
- Malfunctions preventing the asset from operating as intended
- Any information that would affect the bidder’s ability to accurately determine asset value.
The term ‘As is, Where Is’ only becomes relevant on items with descriptions/pictures that fully disclose everything material regarding the item. Items with descriptions lacking material information are at risk of being refused by the winning bidder. These "mis-described" items often become No Sales without penalty to the winning bidder.
Affiliates will not be an “expert” on every item they sell and consequently will be reliant on their consignors for the accuracy of the item descriptions. K-BID strongly suggests that affiliates include in their consignment contracts that consignors will be paid for their sold assets two weeks after the auction closes. This allows time for the buyer to contact the affiliate if the item is not as it was described. In these cases it is the responsibility of the affiliate to work with both the buyer and the seller to come to a satisfactory resolution on the item price/sale.
Stock Photo Policy
K-BID’s full disclosure policy requires affiliates to provide lot descriptions and pictures that accurately reflect the condition of the asset being sold. Consequently,the only time it is appropriate to include a stock photo as a lot photo is when the lot is New(defined below):
A lot can only be described as New if it is unused, unopened, undamaged, and is in its original factory sealed packaging. The original manufacturer’s warranty must still apply.
There is one possible exception to the above stock photo policy. If an auction lot doesn’t meet the criteria to be described as New, and it comes disassembled in a box, a stock photo may be used if the item is either too large or too complicated to assemble for a lot photo. However, if a stock photo is used, it is the affiliate’s responsibility to make it extremely clear to bidders that a stock photo has been used and must specifically state how the actual item differs from the stock description/photos, i.e., list missing pieces, describe and photograph any damage or repairs required. Please see the Lot Condition Disclosure Policy for an explanation of lot conditions and criteria.
Exclusive Online Auction Site
Affiliates must agree to post their online auctions exclusively on K-BID. Affiliates cannot post auctions on any other online auction site, with the exception of ebay. It is acceptable for an affiliate to list/advertise their K-BID auctions or items in other locations (Craigslist, affiliate's own website, print advertising, etc.) with the stipulation that the listing/advertisement directs the interested party to K-BID for information.
Assets posted on K-BID cannot be for sale, or be sold, except on K-BID, for the duration of the auction. This statement must appear in the affiliate's consignment agreement with their seller.
Affiliates are prohibited from bidding on their own auctions. Affiliate consignment contracts must clearly state "Sellers are prohibited from bidding on their own assets." Affiliates are responsible for the actions of their consignors and could incur penalty fees for consignor behavior that negatively impacts K-BID.
Affiliates are responsible for monitoring their auctions and contacting K-BID immediately if they see any suspicious bidding activity or obvious bidding errors.
K-BID prefers that affiliates do not bid on other affiliate auctions, but does not prohibit it. However, if a dispute develops between two affiliates due to the purchase of an asset, K-BID will not get involved. It is expected that all the rules and policies are being followed and that the two affiliates will resolve all issues between themselves.
Affiliates are required to have a written contract with every consignor to ensure that they operate within K-BID's parameters. Affiliates are responsible for the actions of their consignors and contracts are crucial for affiliate protection and holding sellers accountable. K-BID has certain stipulations that must be included in the consignment contract or agreement:
- The affiliate must clearly state the seller is entering into a contract with the affiliate who is operating as an independent business, who has chosen to use K-BID.com as the venue for presenting their auction to the public. K-BID is not a party to this agreement.
- The seller understands once the consignment agreement is signed, the assets listed cannot be available for sale or be sold, except through K-BID.com.
- The seller understands their assets cannot be removed from the auction after the auction is published on K-BID's website.
- The seller understands the assets will sell to the high bidder unless the high bid fails to reach the reserve amount agreed to between the affiliate and the seller at the time the agreement was signed.
- As Is Where Is – only applies if the asset description and pictures were accurately described and any issues affecting the material functioning of the asset and the assets aesthetics were fully disclosed.
- Owner/seller understands that they are prohibited from bidding on their own assets. If the owner/seller does place any bids on their assets, the specific asset or the entire auction may be terminated immediately. The owner/seller will be banned from selling on K-BID. If the owner/seller ends up being the winning bidder on any of their own assets, they will be responsible for paying a 10% penalty to K-BID.
- Reserves must be disclosed and programmed into the auction software prior to the auction being published. Once an auction is published on K-BID.com, the assets will sell to the highest bidder, unless reserve information was disclosed prior to the auction being published.
- Any item resulting in a “no sale” due to an unmet reserve, cannot be re-posted on K-BID unless it is posted without reserve, or the new reserve is well below the last “real” bid.
Buyer’s Premium - Effective 3/1/2018
K-BID charges a Buyer's Premium on every item sold and paid for based on the following schedule:
PER ITEM BP CAP
K-BID receives 10% of the buyer’s premium on every item sold with a cap of $1,000/item. BP is automatically generated on each bidder invoice and is collected by the affiliate and submitted to K-BID.
This is a non-negotiable fee. A $50 minimum BP will apply per auction.
Online Credit Card Payments - Effective 1/1/18
Affiliates must give bidders the option to pay online for auction invoices below the credit card maximum set by the affiliate (K-BID recommends a credit card max of $5,000 unless otherwise specified by your credit card processor). The online payment option will not appear for winning bidder invoices exceeding the designated amount.
Online payment can and should be turned off for assets that are restricted by your merchant service provider (firearms, weapons, ammunition, foreign currency, etc.) Please check with your merchant provider for more information.
Please see the site terms regarding Credit Cards:
Due to the expense in running credit cards for low value invoices, the minimum credit card transaction will be $5.00
Credit card payments are not accepted for more than $5,000 unless otherwise stated in the auction terms. In the event an affiliate chooses to accept a credit card for a transaction over $5,000.00 the affiliate may, at their discretion, charge a fee to cover the added credit card expense.
Real Estate Auctions
Affiliates may post Real Estate Auctions on K-BID. K-BID's role in real estate auctions is nothing more than the website used to post the auction. The only fees K-BID receives for real estate auctions is a $250 posting fee, which is due prior to the auction appearing on the website. Real Estate Auctions can be listed for a maximum of 4 weeks. The affiliate is responsible for ensuring compliance with all federal/state/local laws pertaining to the sale of real estate — this is a highly regulated industry and will require involvement by licensed real estate professionals.
Selling titled/registered assets, while often lucrative, requires affiliates to adhere to a rigid set of procedures. See the section on Titled/Registered Assets for more information.
Vehicles sold in Minnesota
K-BID has an Auto Auction Dealer's License. All vehicles sold in Minnesota that are required to have a title or a registration card, must be sold by a licensed auto dealer. Affiliates who have a Minnesota dealer's license can act as their own Dealer of Record (DOR). Affiliates who do not have a Minnesota dealer's license can use K-BID as their DOR. In order to use K-BID as the DOR, an ACH agreement is required by the affiliate prior to posting their first auction with titled/registered assets.
Vehicles sold outside the State of Minnesota
Affiliates selling titled/registered assets at auctions outside Minnesota are required to know and abide by the laws of that State and follow the format required in the document entitled 'Affiliate DOR and Out of State Affiliates'.
Assets that are Restricted/Illegal to Sell
Affiliates are responsible for verifying the legality of all assets sold on their auctions - federal/state/local laws vary based on the location of the auction. Below are some examples (these are not comprehensive lists):
• Illegal - drop down cribs, migratory waterfowl mounts, alcohol, lawn darts, and USPS items.
• Restricted (requires a specific license or criteria be met) - used mattresses, firearms, gambling devices, livestock.
In addition to federal/state/local laws, K-BID has a list of "Do Not Sell" items:
• Distasteful/Offensive Items - including Nazi memorabilia, nudes or risqué items, Black Americana, etc.
• Pets/Non-livestock animals
• Pallet Lots - Refers to the semi loads of damaged or returned items that can be purchased from places like Sam's Club or Jacob's Trading Company. Generally these loads are delivered on pallets that are shrink-wrapped with a manifest. Affiliates cannot sell these pallets as delivered, due to the inspection requirements outlined in the section below entitled "Inspection and Removal Days". However, affiliates may purchase these pallets and break them down and sell the usable products.
Reserves (see Reserve Policy for details)
Selling with reserves is discouraged. K-BID believes placing reserves on items is counterproductive to achieving the highest prices, as a large percentage of bidders refuse to bid on items with a reserve. That being said, K-BID does allow affiliates to post items with reserves as long as the reserve amounts are extremely reasonable (50% of value or less) and the number of items with reserves is kept to a minimum.
The reserve amount for each item must be entered prior to the auction being published. Reserves cannot be added after an auction is online.
Reserves under $3000.00 are ineffective and strongly discouraged. Reserves under $100 are not allowed to be programmed into the system.
An asset listed with a reserve that is not met may be relisted with a reserve one time. Items that fail to meet the reserve after the second time can only be posted again without reserve.
K-BID’s starting bid price is fixed at $5.00. In certain situations, starting bid prices of $1000.00 may be used, however any starting bid over $5.00 is considered a reserve and has the same detrimental impact to the auction process.
No Sale Fees
K-BID reserves the right to charge a no sale fee for lots posted in an auction that don’t sell because they failed to meet the reserve. K-BID’s interest is in selling assets. There is very little patience for sellers who wish to find out what their asset could sell for at auction. Affiliates who abuse the use of reserves, either by accepting unrealistic reserves or posting everything with a reserve, are at risk for being charged a no sale fee.
Inspection and Removal Days
When scheduling the inspection and removal days/times for an auction, it is important to consider the number of lots on the auction as well as the convenience of the bidder.
Each auction must have at least one inspection day where interested bidders are allowed, at no expense, to inspect the actual lot they may wish to bid on. The bidders need to actually be able to see and touch the items included in the lot. Affiliates need to make the inspection process as simple and hassle-free for the bidders as possible. An exception to this is if the affiliate is selling a brand new factory sealed item and is willing to allow the winning bidder to open the carton during removal and refuse the item if it is not as described.
Storage Unit Auctions
In order to conduct a storage unit auction like is seen on TV --- people placing bids on the contents of the unit based entirely on what can be seen from the doorway --- the following 3 criteria must be met:
• The consigner must be the storage facility (it cannot be the owner of the unit contents)
• The storage facility must have taken possession of the unit.
• The storage facility must assure the unit has remained “untouched” since they took possession of the unit.
If these 3 criteria can’t be met, the traditional inspection rules will apply to the auction – the bidder must have easy access to see and touch the contents of each lot during the inspection.
Description Requirements for Coins/Currency/Precious Metals Sales
- Type of coin/note/asset
- Weight of precious metal in the item - required for every lot
- Visible facts about the specific coin/note/asset - year the coin was minted; mint mark; Note #; Series #; and any other identifying marks
- Provide bidders with the precious metal content (%) of any asset that includes the words gold/silver or any other precious metal in the item description. The metal percentage must immediately follow the type of precious metal, as an example: Silver (90%).
- If the item description refers to the condition or grade of a coin, the coin must be encased (coins graded by top grading companies are encased in plastic) with the grade certification indicated above the coin. The pictures of these graded coins must clearly show the grade as well as the name of the company that graded the coin.
K-BID neither endorses nor promotes wholesalers, or any vendors, we use now or have used in the past to K-BID affiliates. Unfortunately there will be, and have been, people/companies that use K-BID's name when making a sales pitch to affiliates in an effort to increase their credibility. Do not construe "K-BID is one of my customers", to mean K-BID endorses my product/service. The risks/rewards associated with any purchase/service needs to be weighed by each affiliate on it's own merits.
Please contact us to verify any claims being made about K-BID.
ON HOLD Status
Placing affiliates ON HOLD is the tool K-BID uses whenever there are compliance concerns or questions relating to the affiliate's business practices. During the time the affiliate is ON HOLD, no further auctions can be posted. Once the issue is satisfactorily resolved, the affiliate can resume posting auctions.
Examples of conduct that could result in an affiliate being placed ON HOLD:
• Failure to pay consignors in a timely manner - 2 weeks from the close of the auction is the recommended settlement time.
• Failure to close out invoices in a timely manner – invoices should be closed within 10 days of the close of the auction.
• Failure to submit documentation/payments to K-BID in a timely manner.
The relationship between K-BID and an affiliate is completely at will. Either party may terminate the relationship at any time for any reason. All paperwork/payments for completed auctions are due and payable immediately upon termination.