How to know an auction: At first that sentence almost seems to make no sense. Until you look at it close and really study that each auction has it’s own style, structure and personality, do you realize that there’s enormous opportunity in each.
ook close and like snowflakes you’ll find that no two, even by the same auction house, are the same. As with most things that could benefit from study, the higher rewards tend to go to those that look carefully.
Here are a few tips for recognizing certain types of auctions and possible bidding strategies for them.
– Absolute auction: This is an auction with no reserve whatsoever, this include the starting bid as well. These can be a great dice throw for the auctioneer and the bidder. That said, you rarely see these put out by rookie auctioneers, and the merch. offered is so good that little of it sells for very low prices.
A smart bidder at an absolute auction will track lots #1 all the way through the end because you don’t want to miss the few lots in the auction that DO sell for next to nothing.
– Auctions with a starting bid relegated to a percentage of the perceived item value. KNOW your item value here, or don’t bid. Sometimes these auction’s starting prices are at or close to retail value.
A smart bidder at this type of auction will know the values and bid on only items that are worth it. Also, because these types of auctions will usually have more unsold lots than an average auction, one could contact the auctioneer after the fact to make a bulk offer.
– Theme based auctions: A theme based auction or a sale that has for example, the entire silver coin collection of one collector, can be a great sale for power bidding.
A power bidder knows in advance that they want a fair amount of the auction and what they are willing to pay for it. They start off out of the gate by bidding high on the first several lots they want and bid until they get them. Many times this will work to discourage competition and the power bidder ends up getting many more lots for far under the $.
The more bids the power bidder wins, the lower the winning bids become as buyers drop out. Beware of the rival that sees this and tries to jack the bid on you by bidding more than they really want to pay in hopes of running you out of money. This is where it pays to be mindful and know market value. Dropping out of the bidding abruptly is often enough for a power bidder to thwart a rival.
If it sounds like some of these are pretty hardcore tactics, they are. This is the auction business and it rarely favors the the timid. If it’s legal, it’s fair at an auction.
If you’re not comfortable using some of these tactics at auctions, at least recognize that they may be being used against you.
The author is a paid consultant for sever online companies, which he may mention or link to in any articles.