“That ‘non-essential’ terminology at the beginning of COVID-19 – it really fired me up. To be deemed non-essential, as a small business, was heartbreaking, especially for my employees” says Sherry Russell, CEO Of Alderfer Auction in Hatfield, Pennsylvania.
Alderfer Auction was soon able to reopen, but how do you do so when you have just recently purchased a 17,500-square-foot building – with nobody inside?
“Knowing we owned the building was a major factor in our success through this crisis. While others were wondering about how they would make rent, we had a secured SBA 504 loan structure in place. The SBA also deferred the payments for a few months, automatically. My other lenders did not do anything like that to assist us,” says Russell.
Alderfer Auction facility is owned by Avenue501 LLC principles Sherry Russell and her husband Bruce, and head auctioneer Brent Souder and his wife Anita. They purchased the building for $1.8 million last September, facilitated by Seedcopa and Univest. The same space that once hosted a few live and online auctions each week, now houses processing and warehousing space for 100% of product placement online at alderferauction.com. “We averaged 200 bidders at a live auction, and now our online auctions have increased those numbers four- and five-fold. The number of new bidders has been outstanding,” says Russell.
Russell attributes the increase in bidders to the online momentum and structure the company had in place prior to COVID. She also knows the demographics and popularity of people shopping from home and their phones via the Alderfer Auction app. People are looking for unique items for home décor, dorms, apartments, weddings, outdoor gardens, as well as tools, equipment and real estate. Naturally, the company re-strategized to offer curbside pickup and scheduled deliveries.
Although auction services have provided 95% of revenue in the past, Alderfer Auction still provides customers with transition & downsizing for individuals and businesses, in addition to online onsite auctions where items are sold in-house, in-place and on a tight timeframe. To further serve customers, packing, moving and shipping services are available.
At times, the COVID-19 transition has felt as risky as a bidding war.
“In the past, we made decisions based on numbers and established trends. But at the beginning of COVID-19, we had to make decisions with little guidance. Knowing that we owned our own building – that was one less thing to worry about,” says Russell.
Even with recent success, Russell estimates it may take about two years to recover. Part of this is due to the extra labor required to process, catalog and manage the online auctions. But she credits Alderfer Auction’s employees with the company’s resilience. And because of the deferred payments offered by the SBA, Russell says she didn’t have to lay off any of her 20 full-time employees while she awaited assistance from the federal Paycheck Protection Program.
“I’m grateful for my employees and all of my partners. If they were by my side through this, then that is who I want to work with long term,” says Russell. “The SBA has done a nice job of keeping me informed on information that’s pertinent to what I’m doing. I would definitely utilize it again.”