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Sunday Adelaja'sBlog

Abimbola Akingboye Is Setting Up The First Auction House in Nigeria And Explains Why It Is Needed.

from: 24 . 10 . 16
For the first time in the history of business transactions in the country, a full time general auction house, 3A Auction House, is set to commence operations with a promise to revolutionalise how properties and unserviceable goods are disposed of in the country.
He is a Nigerian born but has spent his entire adult life in the United Kingdom as well as the United States of America. Being exposed to those societies has made Abimbola Akingboye, the chief executive officer of 3A Auction House Limited discover that the country does not have a single general auction house that   enables buyers and sellers to meet and do business. Next week, 3A Auction House will be officially launched and Akingboye tells Samuel Ajayi that it is one epochal event that will change the face of auctioning in Nigeria

How did you come about this idea?
I grew up in the United Kingdom and spent a lot of time shuttling between the UK and the United States of America. I discovered that there are many opportunities that people have access to that we do not have here. One of them is that people could buy things there. People can place auctions at the custom, banks and so on. There are so many opportunities to buy from auctions. I relocated to Nigeria in 2010 and I think it was in 2014 or 2015 that I realised that there was a gap in the market that could benefit both the buyer and the seller. At that moment, I started looking into auction in Nigeria, reading about it and I discovered there was no general auction house to deal with this all important aspect of business. That was how this idea came that we could provide the avenue for people in the country.

How are you sure this will work going by the economic situation?
The truth of the matter is that auction does better when there is financial meltdown in any country. Let us look at the time there was recession in the US and the UK. People were buying properties below market prices because people could not afford to keep up with their mortgage. So those who had houses had to sell and were selling at ridiculous prices. There are people who built their properties 20 years ago with N10 million. That property could sell at N70 million now. They won’t mind selling at N45 million. Now, building such property might cost more because the cost has more than tripled. So what you could have built at N90 million, you are buying at half that price. This is the fact the owner selling built at N10 million but selling at N45 million. I feel it is best time to start this.

We have OLX and other sites like that. How is this different?
OLX is not an auction house. What they do is that they give you the platform to upload your material and sell. You set a price and it only attracts one person at a given time. Even at that, you don’t maximise your profit. What you are selling for N1 million, if it gets to auction and because there are so many people competing, you can sell for N2 million. You limit yourself by negotiating with one person, but in auction, you have people struggling for the material especially if it has so much value.  That is the difference between auction and OLX. There are two separate markets.

Customs, banks, insurance companies and so on sell unserviceable goods all the time and there are so many cars and properties rusting away in their custodies. How do you get these people to buy into this idea?

What we are doing is that we are currently in the negotiating stage with these bodies. I just came out of a meeting with the deputy director-general of the National Insurance Association, NIA, and the man was very excited about this. The reason being that they discovered that over the years, so many of the claim managers have been doing deals; they buy stuffs and sell within themselves and to people they know. Cars that could be sold at public auction at N4million, they buy at N1 million and the person buying from them makes profit re-selling the car. The person losing is the man that owns the company. So the people we are appealing to are those who are responsible for these companies. I mean the stakeholders and decision makers. We are saying that a 2015 car, though damaged, that your guys are selling N1 million, could be sold at N3 million if it gets to auction. So we are negotiating with so many insurance companies and banks to buy into this and we can help them make more from their auctioned materials.

Customs sell cars all the time; I mean impounded cars. But this is a government agency with so much bureaucracy which could be frustrating. Do you intend getting across to them? And even police as well.

At the moment, what we are doing is that we are aware of the challenge. I see those adverts and the only reason they do these things is because they have to fulfill the legal requirements of advertising before selling. At times, they have even sold before advertising. But really, those things are sold within a particular group. We are discussing with them to let them know that government can actually make more from these things so that you guys don’t keep short-changing us. And we are making sure that we are going through the top. If we don’t do that, these are the guys doing these things and they will kill it before it gets to decision makers.

When are you likely to start operations?
We are officially launching our operations on Thursday 27th October and we are doing the launch at Oriental Hotel, Victoria Island, Lagos. What we are doing is that we are telling people that we have finally come on board. The first official auction will be 17th November and that is when we will be kicking off operationally. <br

Who are you expecting at the official launch?
We are expecting investors. These are people that like to purchase things and fling them off. We also expect people that run automobile outfits; who sell these ‘accidented’ cars, refurbish them and sell off. We also expect the auctioneers association of Nigeria to be there and the director-general of NIA.

How frequent will you be doing auctions?
We might even be auctioning cars every two days. It depends on the volume and if the volume is great, we can even be doing every day. It depends on the stock we have on ground.  But with what we have now, it might be every two weeks. As per properties, we will be doing that all the time since they come up from time to time.

Ex- thisday

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