There are many ways that people can buy and sell products, but not all of them are the same. An auction is an alternative to a traditional sale that you may have never considered before. There are many different types of auctions, so it’s important for you to understand all the details before deciding which one is best for you at this time in your life.
This post was created with the goal of providing readers with more knowledge about auctions because they’re often seen as mysterious processes by those who don’t know much about them yet.
What is an Auction?
An auction is a type of sale where the item will be sold to the highest bidder. The seller sets the duration of the auction and sets a minimum bid.
The buyer doesn’t pay anything up front, so there is protection for both buyers and sellers!
It can be really advantageous to get a lot of information before you go into an auction because it’s not always easy to know what you need to do and how much it should cost upfront. You also want to know what your credit cards and cash are able to do at an auction site.
How Do You Bid at an Auction?
At a live auction, the bidders could physically raise their hands to increase their bid or just shout out the amount they are capable of bidding. However, this is a live auction which means that individual people will be running it.
Online auctions are different because you can’t see who else is bidding on an item or where it’s being sold. These are also known as reverse auctions and they allow the seller to set a specific time for the auction to end, rather than bidding on it in real-time. Since you can’t physically attend an online auction, you have to register with one of their trusted client websites in order to participate and buy something from them.
You might want to learn about the types of auctions that exist before you start shopping because it’s hard to tell which one you’re participating in when you get started. Knowing this information can save you a lot of time and money further down the road.
How Do You Sell at an Auction?
A seller places an item up for sale and then makes a bid on it during the auction. They have to pay a fee that is reportedly higher than those at other types of sales, but they can potentially make more money when selling their products!
What is a Reserve Price?
A reserve price is the lowest price that an item can be sold for during an auction. This means that it doesn’t necessarily have to go any lower than this point, no matter how much anyone bids on it.
What is Commission?
Commission is the fee that a seller needs to pay when participating in an auction. This varies from site to site but it can be anywhere between 3% and 15%. A higher commission means a lower chance of profit for you!
What is the Buyer’s Premium?
Buyer’s premium is another fee that buyers have to pay when they participate in an auction. This fee is typically added on top of the final bid and it can be anywhere between 1% and 25%.
Quick Guide for Buying and Selling at Auction
Auctions are a lot of fun, but they can also be confusing. If you’re not careful, you could end up paying more than what the item is worth or bid on something you don’t want. To avoid this from happening, here’s a quick guide for buying and selling at auction. It will help ensure that both your bidding experience and your day go smoothly.
1) Do Your Research
The first step in any successful auction purchase is doing research beforehand so that when the time comes to make an offer, it’ll be based off knowledge rather than impulse. Take some time before going to an auction house to look through their catalogs online; try researching comparable items, past results and any potential red flags with bidding on the piece.
Also, don’t be afraid to ask auction house staff about any item that’s not in their catalogs; they can offer analysis on whether an item is authentic or if a repair needs to be made before being presented for sale. If you’ve found something you like, try having it appraised by an expert so that you know what kind of deal you could get at auction.
2) Invite Friends and Family to Come Along
There’s no faster way to make yourself look foolish than by bidding against someone who knows less about art than you do—especially when there are more people involved. When hosting an event, invite friends and family members who can join you in looking at the catalogs or research online for items that might interest you.
3) Bid as Low as You’re Willing to Go – Then Lower your Bids a Bit More
When it comes time to make an offer, don’t be afraid of undercutting other bidders. Establish your limit and stick with it; if someone outbids you once, try bidding again just before the hammer falls. If they outbid you again, drop your price even lower—but only by $5 or $10 increments. There’s no point in leaving a bidder hanging when they are still interested in acquiring an item but aren’t willing to pay more than what you are currently.
4) Remember the Auctioneer’s Commission is Not Included in the Price
Prospective buyers should keep in mind that when they purchase an item, it doesn’t just cost them the hammer price; there is also a commission to consider. While some auction houses include their commissions in the buyer’s premium (the total amount of money you pay after buying something), others do not. If you aren’t familiar with how much your auction house charges for commissions, ask before bidding to avoid unpleasant surprises.
5) Come Prepared and Leave ASAP
When attending auctions, bring whatever resources you might need so that you can stay focused on trying to win bids: magnifying glass or glasses if needed, pencils and paper for taking notes … even snacks if you’re planning on staying through the end of the night.
The main reason why bidding at auctions can be so confusing is because it’s not like shopping for something you want to keep—you’re buying a dream that you probably won’t get to keep unless there is an opening bid (the price starts from the minimum amount collectors expect) or if you are willing to pay a higher premium. When it comes time to leave, make sure you do so as promptly as possible; even though your items haven’t sold, they are no longer yours and have been tagged with your bidder number; those who chose not to leave their contact information might lose out on future auction opportunities too. The quickest way to clear out an auction and ensure that everyone is paid fairly is simply to keep your phone on hand and answer it for any call that comes through.
6) Consider Hiring an Auction-House Insider
When it seems like you’ll never be able to catch up with another bidder, consider hiring an auction house insider who might be willing to make a bid or two on your behalf (or at least let the auctioneer know they are in the room). If you are looking at buying pricey items at auctions, this could easily save you thousands of dollars in lost bids.
7) Keep Track of Your Purchases
It’s easy to lose track when uou’re inundated with information. You might feel overwhelmed when you’re attending auctions because there is so much information thrown around; from catalogs to price lists, it can be easy to lose track of what you bought and for how much.
The best way to avoid this is by keeping a simple list with the date, bidder number (if applicable) and the item’s description – including any flaws or markings that might affect your decision when it comes time to resell them.
8) Keep Track of What You Bid On Too
Even if you are working with an auction house insider who will keep track of prices, you should still monitor what items have sold for in order to make sure that you aren’t being cheated or overcharged either. In order to do this properly, figure out which items are important to document in detail and which ones don’t need as much attention; for instance, catalogs tend to be valuable items that list all the lots (so if one goes missing you can potentially get in trouble) and are usually worth noting.
9) Don’t Be Afraid to Bid Multiple Times on One Lot
If there are several similar items up for auction at a given time, don’t be afraid to bid the maximum amount that you’re willing to pay more than once or twice. Even though it might seem like you’ll never win with this strategy—even when your bids are very close to the bidding increments—it should make a difference as auctions typically use an ascending order of bidding instead of just increasing by fixed amounts, which means that everytime someone makes a new bid it automatically increases by another $25 (for example), which is why it’s important to bid more than the minimum. This also means that if one bidder backs out, your maximum amount will be considered as the new bidding price.
10) Put in a Maximum Bid and Sit Back
For those who prefer a more passive approach, you can always consider putting in a maximum bid before an auction even starts; no matter what happens during the event, this should ensure that you end up paying less than what you anticipated (unless someone bids higher). However, this method doesn’t work for every kind of auction either—especially when there are multiple bidders vying for the same items—so be sure to do your research before hand so that things don’t get too frustrating when it comes time to pay for the items.
11) Ask for Partial Reimbursement on Shipping Costs if you Pay Too Much
If your maximum bid didn’t win and you end up having to pay more than what was expected, ask for partial reimbursement of your shipping costs; this should provide a little relief since most auctioneers are willing to do whatever they can in order to keep their customers happy (and by extension, coming back in the future). Keep in mind that some online auction houses might charge a small fee for refunds too—typically around $5 or less.
12) Get Everything at Auction—Even if it’s Just Small Purchases Here and There
By all means, go ahead and buy every item that interests you at auction—even if it’s just a small trinket that you don’t think is going to be popular with anyone else (the exception, of course, are antiques or items that have been especially rare over the years). This is because even though the amount might seem negligible at first glance, those “small” purchases can really add up and end up being valuable in time.
13) Do Comparisons Once in a While Just to Make Sure You’re Getting the Best Deals Possible
It’s easy to assume that you’re getting a fair price when no one else seems interested but this isn’t always true; do comparisons from time to time in order to make sure you aren’t paying more than what others were willing to pay before you. The best way to do this is by using a price comparison website that covers auction sales in your area so that you can get some idea as to what the going rates are for items similar to yours. Note that if there’s something specific about your item that people might be willing to pay more for then those prices may not apply at all (such as an unusual item or one with a special edition).
14) Mark the Lot Number for Items You Want to Bid on
When you order lots in advance from an auction house, it can be easy to forget what they are especially if they come at random times during the event. Of course this isn’t a big deal if you just plan on bidding or buying at random but this can be problematic when you need to take care of other matters such as arranging for shipping; by marking down (or even taking a photo) of the lot number and info, it’ll be easy to look up that information when necessary.
15) Arrange for Shipping Beforehand in Order to Avoid Hassles
If you think you might need some extra assistance with the shipping of your purchased items, it’s always best to arrange for this before the auction even starts. Some online auctions can provide such services themselves while others will give you information on how to do so (phone numbers and websites are a good start). This is especially important if you’re buying heavy or large items such as furniture and machinery; having to figure this out on the spot is not only inconvenient but can also be dangerous for inexperienced individuals.
16) Be Sure to Get Everything You Ordered
This perhaps goes without saying but it’s best to avoid being picky about tiny details when ordering lots in advance from an auction house since what gets shipped to you is what you paid for regardless of whether there were no mistakes made or not. In some cases, the people responsible for shipping might try contacting you first (via email or phone) before sending over your items if they think something might be amiss but this isn’t always possible either so be sure to double check everything when they arrive at your home.
17) If There are Problems, Don’t Hesitate to Contact the Auction House
It’s a good idea to let an online auction house know immediately if there are any problems with the items you ordered, be it damage or shortages (both of which might incur additional charges and expenses before delivery). Although most companies will go out of their way to avoid such situations, mistakes can happen so it’s best to stay in touch until the matter is sorted out as this will show that you aren’t just trying to take advantage of them.