Mastering the Online Auction Bidding ProcessBy Shawn Terrel, President United Country Real Estate | Auction Services
April 16, 2019
The cry of the auctioneer (or “the chant”) has always had a special allure to auction bidders, as they watch items sell at a rapid pace...
The cry of the auctioneer (or “the chant”) has always had a special allure to auction bidders, as they watch items sell at a rapid pace and under the fall of the hammer. While attending a live auction, bidders are afforded the opportunity to inspect the merchandise being sold firsthand and they have a chance to see who is bidding against them and for how much. However, in our growing and ever-changing way of life, our time has become seemingly more valuable without any regard for the time and effort it takes to attend a live auction and end up with that special item we cannot live without.
Today, ONLINE AUCTIONS have taken the auction industry by storm and are allowing bidders to competitively bid over the internet on a multitude of items that were once offered strictly at live auction events. The same items we were accustomed to standing around all day in a crowd of people waiting to come up to the auction block, are now available to receive our bids online 24/7 during the allotted time. With this new technology comes new challenges for auction bidders as they are still trying to get their heads wrapped around mastering the bidding and buying process in an online auction event.
The following best practices will get you on the road to becoming an online auction bidding expert and hopefully help you secure more items online in an economical and efficient manner.
- Buyers Premium: This is by far the most common issue that comes up with online bidding once the auction is over and the winning bidder is awarded the item. The online bidding platform and/or the auctions terms and conditions will normally clearly state if a “Buyer’s Premium” is part of the auction sale. For example, if there is a 10% buyer’s premium and your winning bid is $100, you will be expected to pay a total of $110.00 (plus tax, if any) when checking out of the online auction. Know if there is a buyer’s premium and factor that into your bidding amount during the auction.
- Shipping: When purchasing items in an online auction, it is not uncommon for the “buyer” to be responsible for the shipping and handling costs associated with the items you purchase. Read the terms and conditions of the auction related to the shipping of items to see if there will be additional expenses to get the items shipped to you.
- Maximum Bid: Most of the online bidding platforms used today allow bidders the option to set a maximum bid they are willing to pay. This feature allows the system to bid on your behalf up to the amount you set as your maximum bid so you do not have to consistently watch or participate in the auction bidding. Most of the online auction platforms also allow the auction company or auctioneer to see what the maximum bid you placed is even though this is rarely disclosed in their terms and conditions, so be very careful about showing your cards too early and disclosing how high you’re willing to bid on an item unless you are familiar with the auction company or auctioneer.
- Avoid Round Bids: When mastering the auction bidding process, one of the most commonly used techniques is to place a bid just above your actual target. For example, if you wish to bid $100.00, most people think in whole numbers so you should consider bidding an amount similar like $102.75. Being a competitive bidding environment, this will increase your odds of winning the bid because the other bidder will see that $100.00 did not win the bid and may give up.
- Inspect, Investigate, Informed: Make sure that you are comfortable and satisfied with the amount of knowledge and due diligence you have on an item before making substantial bids online. Today’s auction companies are becoming better providers when it comes to writing full descriptions that point out the positives and negatives of an item, as well as providing higher quality images from multiple angles. Ask if there is a physical inspection period when the items can be viewed and inspected in detail for condition, operation or completeness. If an item cannot be inspected ahead of the bidding process, make sure to bid conservatively or on a “sight-unseen” basis in the event the item may not meet your expectations. Once the auction is over and you are awarded the item as the winning bidder online, you will normally be expected to accept the item in its current condition whether or not you agree with it.
- Soft Close: This online auction functionality is often referred to as “sniper protection” and its purpose is to remove the ability for an online bidder to place a bid in the last few seconds of the auction without giving other bidders a chance to respond with another bid. The auction company can pre-set the amount of time that bidding is extended when a bid is placed at the very last few seconds of the auction, keeping the bidding open for the pre-set amount of time. The old technique of waiting until the last few seconds to place a bid is no longer an advantage with this new technology.
- Registration Process: When preparing to bid on items in an online auction, start the process early by registering and getting your bidding account activated. We have noticed that some bidders wait until the very end of the auction and then try to create a new bidder account when it is too late to get it all accomplished. It’s better to be early and prepared.
- Research Values: Know the market and appropriate values as much as possible when placing bids on items in an auction. The internet has so much information available for a wide variety of items that have been sold or are being offered for sale that will help alleviate some of the pressure of bidding without knowing exactly where to stop. Remember, a well-informed bidder has the advantage.