I remember an auctioneer calling me — maybe 30 years or so ago — and asking what the licensing process was in a certain state for conducting an auction. I told her it involved schooling, testing, etc. and she remarked, “It might be easier to ask for forgiveness than permission?”
She actually had a point — as the licensing process at that time involved maybe $1,500 and 6 months of her time, where the penalty for conducting an auction without a license was only $500. As she noted, she could save $1,500 and 6 months, and just maybe pay $500 if she “got caught.”
She went ahead with the auction and there was no recourse by the state licensing agency, so she avoided $1,500 and 6 months of waiting and made about $50,000 in commission. Is her choice in any matter always the better choice? It’s clearly not.
We wrote about how some auctioneers attempt to circumvent licensing. Often it’s the same argument … easier to ask forgiveness than permission. https://mikebrandlyauctioneer.wordpress.com/2013/01/01/auctioneers-circumventing-licensing/.
Certainly when it comes to firearms. taxidermy, ivory, titled vehicles, and other highly regulated property that involve federal and/or state laws, it may be better (easier) to get the necessary licenses than unsuccessfully asking for forgiveness.
The reason for this consideration is the cost can outweigh the benefit. Just take firearms as an example: $200 for the license or possibly a 10-year prison sentence and a $500,000 fine. Even if the chances of “not getting caught” are high, the penalties for getting caught are far more significant.
Of course, the auction business — and maybe any business — is filled with “risk and reward” scenarios, where prudent decisions should be made. Where rewards exceed risks, actions should be taken, and when risks exceed rewards, actions should not be taken.
Yet, it’s not that risk and reward are often of the same magnitude. It’s not only the chances of the rewards versus the odds of the risks but the breadth of each. In our “firearms” example, the odds of 10 years in prison and $500,000 are fairly low, but the magnitude of these possible penalties are enormous.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at Mike Brandly, Auctioneer, Brandly Real Estate & Auction, and formerly at Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auction Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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