Michael J. Hunyady, the founder, owner and president of Hunyady Auction Company and Hunyady Appraisal Services, got his first taste of the auction business while a student at Penn State University.
He worked for a friend’s father, Walter Vilsmeier, as a construction equipment operator, laborer and set-up man initially; gradually, he transitioned into other areas of responsibility that the construction equipment auction appraisal industries require.
“I had limited background in the construction and demolition industry, working mostly summer jobs, but probably the real impetus for hiring on at Vilsmeier [Auction Company] was the fact that Walter’s son, Fred, and I became friends at Penn State and would work for his dad on weekends from time to time … when the auction company was near Penn State and we could run out and make a few extra dollars,” Hunyady said.
Just two years later, Walter Vilsmeier sent him to the Mendenhall School of Auctioneering in Highpoint, N.C., to complement the other tasks he was performing for the company.
The two-week process included multiple areas of the curriculum — “everything from advertising and marketing to the Uniform Commercial Code to auction technique, auction law and obviously bid calling,” Hunyady said. “When you get there, they give you five marbles to put in your mouth and you start to count from one to a thousand and a thousand back to one. You learn to speak in increments and quarters, halves, tens, twenties, etc. Then you learn how to put a hum behind your voice to start your chant and then to use filler words. Every other day you take another marble out of your mouth and as we say ‘When you lose all your marbles then you become an auctioneer.’”
When he started, Hunyady said that the farthest Vilsmeier Auction Company travelled to perform auctions was in Indiana. That was 1979. In 1981, the company did 118 auctions. “We would pass each other in airports; there was so much going on in our company,” Hunyady recalled.
“But by 1985, we had done auctions in 44 states,” he said. “It was a wonderful time to build an auction company, although it was a recessionary time for the country. The average age back then was about 26 years old, so we were young and growing and had great leadership in the management and ownership of Vilsmeier.”
After 11 years working at Vilsmeier, Hunyady decided to venture out on his own.
“I think that the entrepreneurial spirit in many people rises because of situation and timing … stimuli that perhaps isn’t there all the time,” Hunyady said. “I was with Vilsmeier for 11 years. The educational aspect of working there was tremendous. I was lucky enough to be in all 50 states by the time I was 30 years old and we worked in most of them.”
Hunyady said that he didn’t leave Vilsmeier with the sole purpose to start a company, “but that kind of grew out of the requests and prompting of others. So I left at the end of 1989 and incorporated this company in 1990.”
Of course, there were challenges.
“I think that most of my challenges came from administrative requirements, regulatory compliance requirements, which continue to grow today in all kinds of American business,” Hunyady said. “I think that it’s an ongoing situation. The auction business has changed tremendously since I got into it in 1979, in all kinds of aspects — the juggling of everything from capitalization and administrative and accounting procedures. Those are probably things that I didn't really give a lot of consideration to, but obviously are the life’s blood of every company. I was well versed in operational aspects and some in administration, but there was a learning curve for me and I think it is probably something that you always learn as things change.”
After a few years in business, Mike Hunyady’s sister, Susan, came to work for the company. She serves as administrative assistant, head of marketing and advertising department. She joined Tim Schwer who started with the company from the beginning and has served for many years as executive vice president and recently as managing partner.
A Lucky Break
In the company’s first year in business, the company held approximately one dozen auctions, but within a couple of months of starting in business, Hunyady landed a multi-auction situation with a large electrical contractor, Fischbach and Moore.
“It was almost miraculous that me, as a start-up, would nail a multi-auction, multi-location around-the-country situation, which really catapulted us into some more unexpected things … like now we have the business, where are we going to get all the people to do it, because we can’t do it on our own,” he said.
Hunyady was tabbed by a due diligence team to put Fischbach and Moore’s house in order, to prepare them for sale.
“That was the impetus of the multiple location auction,” Hunyady said. “We did auctions in Cleveland, Ohio; Troy, Michigan; Peoria, Illinois; Oakland, California; and Dallas, Texas.”
In 2000, Mike Hunyady, in essence, went full-circle in the auction industry when Walter Vilsmeier came to Hunyady, asking him if he would be interested in buying his company. He was and Hunyady acquired Vilsmeier and brought it into one operating entity.
“Walter Vilsmeier was a pioneer in the industry,” Hunyady said.
Today, Hunyady Auction Company uses the Vilsmeier name from time to time, mostly when the company performs auctions for publicly owned utility companies, which, Hunyady said, are few and far between now because of how the market has changed.
Going Strong in 2015
This year, the company expects to conduct between 20 and 25 auctions, in addition to its ever growing appraisal business, Hunyady Appraisal Services. Between the two companies, employees will work in 20 to 25 states a year.
“We have worked in all of [the states] and almost all of the Canadian provinces,” Hunyady said. “We have gone to Nigeria to Turkey and all over the Caribbean and Latin America and South America. Obviously, the northeast is our predominant sales area.”
Hunyady Auction Company does absolute auctions of construction and mining equipment; Hunyady Appraisal Services offers fee appraisal services in construction and mining and transportation, logging and concrete and asphalt business.
All together, Hunyady’s companies employ approximately 10 to 15 full-time employees; the subcontractor, contractor and temporary workforce runs into the 20 to 30 range. Hunyady’s goal is to have a core group of professionals and once a job is contracted, to be able to supplement with good part-time and temporary employees in various functions.
Keeping Customers Happy
“We are fairly specialized when it comes to our approach to the auction business,” Hunyady said. “Number one, the basic foundation is that of absolute auction, a true absolute auction where everything sells to the highest bidder regardless of price. We haven’t deviated from that foundation.”
Hunyady believes setting expectations and then executing properly and reaching those goals that were set forth for the contractor helps keep customers satisfied.
“It’s important to let anyone that you are doing an auction for know, prior to contract, what your feelings are regarding the dollar volume of the auction,” he said. “I guess from the outside looking in, it would be easy to say ‘OK, well if you told a contractor that the auction would bring in “X” amount of money or more’, he would be happy; alternatively, if it brought in less he would be unhappy. There are a number of issues regarding success and why our customers are pleased, satisfied, happy with us, if you will.”
Hunyady said that includes how the auction company represents the selling entity.
“Not only is our name on all the advertisements but the contractor’s name is, too,” he said. “Everything from demeanor to honesty and to integrity, straightforwardness, safety, efficiencies and productivities that the auction company operates under is important to the contractor and the way he wants to do business as well.”
The Importance of a
According to Hunyady, everything in this business starts with a list of equipment and potential value of that list and from that criteria all pertinent decisions will be made.
“A list is one thing, but then the inspection process is tremendous,” he said. “Whether it be in the auction side of the house or the appraisal side of the house, inspection is critical. We inspect tens of thousand of pieces of equipment every year around the world. It's a moving target. You will never get to the perfect situation for inspection.”
Hunyady said that he prefers inspection forms because “forms don’t forget.”
“Years ago, we did everything on an eight-and-a-half by eleven tablet, but those prompts need to be there for younger inspectors and older inspectors. We have used voice recording with microcassettes, but when you are on your hands and knees, 2,000 feet below the surface of the earth in a coal mine or on top of the crane that built the new Freedom Tower at Ground Zero, the recording often becomes daunting. It’s much harder to lose 50 pieces of paper than it is a microcassette. The information gathered becomes very valuable. Inspection is critical to us as not only make and model but options, attachments and mechanical, tire and undercarriage conditions.”
An Old-Fashioned Approach
“We are constantly looking at how technology can positively affect our company and our day-to-day workplace, but at the same time we are wary of something that is no more than a gimmick,” he said. “We were resistant to our traditional auctions being complemented by online real-time bidding for various reasons. Since we started using online bidding about three years ago, some of those reasons are still true.
“There is an aspect of reach, advertisement, and comfort that the online bidding has, but there are also pitfalls, which will always be there,” he cautioned. “Despite computers and the high tech aspect of things, we are all still human beings and there will be errors, there will be mistakes and I will say that I was afraid of the vetting process. It’s gotten better. There are a number of players in the business now offering the online bidding platform with various models of approach and it is not the end all for this business.”
“The traditional auctioneer is desperately needed still in this marketplace,” he said.
“If his work and his talents are complemented by the aspect of online bidding and some of the other things that come with it, it’s great for the consumers. For the auctioneer, online bidding may result in higher selling prices, sometimes not, but at the same time it’s an area of overhead and expense that the auction company has to consider as well.”
The professional auctioneer is a problem solver, according to Hunyady.
“As we say, 95 percent of the professional auctioneer and auction company’s work has to be done before the auctioneer calls the first bid,” Hunyady said. “The back office and field aspects that are required to ensure success has to be done and it is far more important than an auctioneer calling bids in various increments. That’s what everyone sees, that’s when we are on stage and everyone else is too, but at the same time, in the big scheme of things it plays very little. The only thing that the online bidding brings are additional bidders via cyberspace to bid on equipment. It doesn’t necessarily assist in all aspects of what the auctioneer needs to do. Every auction is different, every situation is different and it requires seasoned individuals with lots of experience to be able to tailor the services of the auction company to the specific needs of that particular seller.”
Helping Customers Both Large and Small
In the auction business today, it is extremely competitive for big players, for small players, online players, etc., according to Hunyady.
“We must maintain a competitive edge,” he said. “To maintain that competitive edge, we look for value and services that will assist the buyer and the seller. Some of those services include offering financing through a third party. That is not a profit center for us, that is a service to assist the purchaser to be able to bid more and the seller to be able to reap more.
“From a transportation standpoint, obviously if someone knows what it is going to cost them to get their purchases back to their yard or their home, it eliminates the unknown and makes them more apt to give the best dollars that they can or bid the highest at that sale. We keep a number of different transport companies, freight forwarding and customs companies where we can refer our customers based on their particular transportation needs.”
Selecting an Auction Company
“I think in the selection process of an auctioneer, the seller needs to weigh various areas that are important in the selection process,” Hunyady said. “Number one, I think that the reputation and integrity of the individuals that operate in any particular company is paramount. Basic fundamentals and ethics are critical because everything comes from those traits. The next would be the experience and expertise in a general locale about various types of equipment.
“What we bring to the table is implicit honesty and integrity with references to back-up those claims all over the world,” he added. “Our hands-on, in-depth approach to all of the facets or phases of an auction from initial inspection to proposal, to contract, to advertising, the types of advertising, etc. preparation, the strategical, logistical set-up of the auction site and the equipment … with a tremendous emphasis on safety during that phase and also into the next phase is key for us.”
Hunyady said that anyone considering hiring his company can “contact everyone we have ever done an auction for and they will attest to these facts.”
“Some will be happier than others, but they all will attest to the fact that expectations were identified and the goals were attained,” he said. “I think that and our work ethic and dedicated service to our customers in the industry is where our competitive edge is.”
“I’d like to see the company continue as a bona fide professional, traditional auction company and appraisal company as well as a problem solver for a multitude of customers, all with different needs, to continue the resiliency that we have accomplished for 25 years,” Hunyady said.
As far as change is concerned, Hunyady said the company will adapt and evolve when situations require, but only in those instances.
“I don’t want change because it seems to be vogue at a particular time or to fix something that isn’t broke,” he said. “I think that’s the most important thing that this company brings to the table. I would like to see it continue. I’d like to see it grow if growth is natural and it’s the right thing to do in various areas, but not to grow just for the sake of getting bigger.
“In all walks of industry and in all walks of business life, money is important, but money needs to be earned with a code of honor, too, and if that’s not done, then we forsake our commitment to free enterprise and American business and hang our hats only on things that can be counted … and true business that is satisfying is far more that just the earning of dollars.”
Hunyady adds: “I want to make it clear that the company’s 25 year milestone has been accomplished by some very hard-working, tenacious and loyal employees: Sales by Managing Partners Tim Schwer and Tim Dewey, Advertising and Marketing by Susan Hunyady, appraisals by Vice President Richard Kriebel and Denise Lund and Field Operations by Jim Hunyady, Les Leach and the Irwin Brothers. We are also blessed by fantastic subcontractors, part-timers, supportive family members and those who have passed on before us.” “Thanks — let’s go after the next 25 years.”