I’m sure you have all seen auctions on TV but have you ever been to a live auction? Auctions are a brilliant and fun way to get stuff for cheap but there’s a few things you need to know in order to make it a worthwhile and positive experience.
There are many different types of auctions
There’s a million different types of auctions out there, ranging from Automotive, General Goods, Deceased Estates, Building and Home Improvement goods, Antiques, Art, Whitegoods, Jewellery, Real Estate, Seafood, Flowers and Livestock just to name a few.
There is also the world of online auctions but I’m going to talk about live auctions here today.
The first auction I ever went to was a general goods auction and I’m going to give you the rundown of the process, for those that are uninitiated with what actually happens.
The auction process
When I first walked in there was a registration area where you had to give the auctioneers your personal details (name, address and phone number) and receive a bidding number on a card along with a printed list of the items to be auctioned. By law the auction house has to register all bidders so this step is essential if you want to bid. The items to be auctioned were displayed around the edges of the local community hall where it was held, and in the middle of the room were rows of seating with the auctioneers pulpit situated at the front.
This particular auction was a general auction so the goods ranged from furniture, collectables, jewellery, clothing and household items, in fact a little bit of almost anything you could think of! Each item (or lot) had a corresponding number on the list, and this number was posted on the physical items around the room so you knew exactly what was being offered.
There was no actual in-depth description of the item, so it was up to the buyer to check up and do research on the item (a quick on-the-spot ebay check via smartphone came in handy). There was not always mention of the condition so it was important to check each item over very carefully for any faults. The viewing was open for an hour and a half before the auction began.
When it was time for the auction to start the auctioneer just made his way down the list, with assistants bringing the item out to the front for a visual reminder. It was very fast paced but easy enough to follow. The winners were identified by their bidding numbers so it was essential that they were used whilst placing bids and especially for the winning bidder. The entire auction went for about 3 hours. About ¾ of the way through the auction they opened the cashier for people that were finished bidding for the day to go ahead and pay for and collect their goods. They had a policy of all items sold on the day being made to be collected by 6pm the same evening. They also had a contractor on site for delivery of large items for anyone that needed a delivery option.
The first item I won that day (or ever, at a live auction) was a set of children’s clothing which included a beautiful, intricate beaded lace baby’s christening gown and bonnet, and a little boys formal suit. I won the lot for $15 which was well below their real value.
Commission and how it works at auctions
An important thing about auctions is that on top of the winning bid cost there is commission to be paid to the auction house. This varies anywhere from about 10 – 25%. It’s extremely important to remember this while you are bidding as it can make quite a large difference in the final cost, especially for large ticket items.
Auctions are a lot of fun and a really good way to pick up some true bargains. If you don’t know of any in your area just do a quick google search, they operate in most areas, usually on the weekend but there are some during the week too.
Probably the most important thing you do is to DO YOUR RESEARCH first so you don’t end up bidding on a lemon. Most auction houses list photos of the upcoming auctions online (sign up to their email list to get them delivered to your inbox). From this you can do a lot of legwork prior to the actual auction day so you can walk in and bid confidently. It’s also worth giving yourself a price limit (including commission) and be disciplined to stop when you get to your limit, it’s very, very easy to get caught up in the excitement and keep bidding long after you actually mean to! If you lack confidence you can always go along and watch for the first few times to see how it all works.
Oh yeah, that Christening clothing I won at my first auction I later sold on eBay for over $100. So utilising auctions can be a really great and fun way to buy cheap goods for you to use yourself, or to later on-sell. Just remember the basics and don’t bid over your limit!
Do you go to auctions?
What are your top tips for saving money by using auctions to your advantage?