In the international fur business more than 95% of undressed furs are sold at auction. An auction accurately estimates market supply and demand for fur and forms a fair price for it. Auctions are a special way of selling furs, they require a certain infrastructure to be developed and maintained (purpose-built premises, storehouses, efficient staff etc.). Auction operating doctrines are basically the same everywhere and are determined by auction sales conditions.
There are five main fur auction centres in the world: Kopenhagen Fur (Denmark), Finnish Fur Sales (Finland), NAFA (Canada), American Legend (USA) and Sojuzpushnina (Russia).
Preparations for an auction begin several months before it actually starts. Suppliers of goods, who"d like to sell them at auction, deliver the goods to the auction company"s storehouse. Company experts sort out the goods according to their approximately similar qualitative features. The sorted goods are divided into lots. Each lot consists of goods of similar quality. Then each lot is given a number under which it is catalogued along with details of the fur sort and quantity of individual items in a given lot. Lots with similar qualities usually follow each other building, so called, "strings". From each lot or string a "show-lot" is taken which should correspond to the goods from the given lot or string in all its qualitative features. The goods are sold at auction according to their number in the catalogue.
At the same time when lots and show-lots are prepared a catalogue containing a list of all lots offered for sale is made. This catalogue contains such information as a table of contents (where the total amount of different sorts of furs up for sale is noted), auction sales conditions (where goods inspection routine, sale and price tag schemes, contract conclusion procedure are pointed out); the opening date, the duration and location of the auction; the time fixed for goods examination, dates and times when auctions are going to be held, as well as, the closing date for paying for purchased goods. The auction companies send their regular customers and prospective buyers information on approximate product proposal and the amount of goods up for sale.
Goods examination by customers is the second stage of the auction procedure. Examination usually starts 3-5 days before the auction is opened. Preliminary goods inspection is obligatory because, according to auction rules, in cases where defects are discovered (except hidden ones) no claims can be admitted after the purchase has been made. The goods examination is held in special rooms where show-lots from each lot are displayed. Buyers examine them thoroughly and mark in the catalogue the lots they are interested in, as well as, the price they are prepared to pay for them. If a buyer wishes he/she can have a look, not only at the sample, but also at the entire lot.
The third stage of the auction procedure is the auction itself. It is opened on the predetermined day at the previously stated hour and is usually held in a special auction room. The auction presidium sits at a high table in front of the buyers. The presidium consists of the auctioneer who conducts the sales and his assistants who are to observe the participating customers" behaviour. A notice board is placed in the auction room; this board displays the index number of the lot currently up for sale, the name of the goods, the page in the catalogue describing the lot and the price at which the previous lot has been sold. Buyers sit at separate tables or in rows arranged in a circle. Each buyer has a number placed in front of him/her; this is the buyer"s registration number at the auction.
International fur auctions are held in English. The auctioneer announces the number of the lot up for sale and names the starting price, which is usually equal to the approximate market price. By raising their hands customers name their own price and the auctioneer keeps raising the price until no more bids are made. After that lot goes to the purchaser who"s named the highest price. If several customers have bid the same sum of money and won"t raise the price it"s up to the auctioneer to decide who gets the disputed lot. If nobody shows that he/she would like to purchase the goods by raising a hand or a pencil, by nodding the head or shouting out "yes" the auctioneer brings the price down to a fixed limit after which the lot is withdrawn from the sale. The price is raised or brought down according to the stated interval (bid).