Unless you are a professional dealer or a business owner you’ve probably never bid on anything at a live auction before. Sure you may have bid on things online, but live bidding is a whole different ball game. The fast pace and sometimes-hectic environment make live auctions an exhilarating experience. We sometimes get calls from customers who are unsure of how the whole process works, and the idea of bidding against a room full of other people can be a bit intimidating for them. However, we are here to tell you that after reading this email, you should be familiar enough with the basics to confidently attend your first or next auction.
Open verbal auctions are the most popular types of auctions, and the ones we will be focusing on here. At these auctions, the auctioneer asks for a price and the bidder will agree to that price by either raising one’s hand or bidding card or verbally agreeing.
The type of bidding strategy that you choose to use should depend on what you feel most comfortable with and which strategy you believe will give you the best results in that situation. Some bidders believe it is best to come in with guns blazing from the start. In doing so, they hope to deter weaker bidders by showing that they mean business. Other bidders believe it’s best to wait until the bidding slows down to just a few people, and then enter the bidding. They hope that by entering late in the game, there will only be few bidders left, some of whom will grow tired of getting beaten and drop out. These are certainly not the only bidding strategies employed by experienced bidders, but they are some of the most popular, and knowing them will get you more comfortable with the process.
Other strategies have to do with specific bidding tactics rather than the timing of bids. The first thing to do is to try and bid in the smallest increments you can. The auctioneer might not be too happy about this since he will have to spend more time on the item in order to get the prices to the level he would like to see. This strategy also prolongs the bidding, giving bidders more time to think and make rational decisions; This is not something that is in the auctioneer’s interest. For example, if the current bid for an item is $100, and the auctioneer calls out $120, that doesn’t mean you have to bid $120. You can offer $105, $110, or any other amount in between. The auctioneer may very well ignore you if there are many bidders meeting his price, but when things slow down, this strategy works.
Auctioneers can sometimes be hard to understand when they are calling out bids in rapid-fire succession. Their fast way of speaking partly has to do with tradition, but it is also a deliberate attempt to create a fast pace and encourage larger bids. Do not be fooled by this! When the auctioneer is calling out bids, make sure you know if that is the current bid or the amount he is asking. For example, when he says $1000, $1000, $1000, he is most likely asking for $1,000, not looking for a higher bid. When the auctioneer has $1000, he will usually say so clearly, before seeking the next bid.
If you lose the bid on an item, DO NOT LEAVE until the sale of the asset is confirmed. This simple, yet effective strategy can work wonders. In many auctions ,some of the assets that were sold end up coming back up for auction because of some problem with the winning bidder. The problem could be that the winner didn’t have enough money, withdrew the bid, or some other problem. . The auctioneer may start the bidding from the price the item originally sold for, but do not offer that amount, because there is a good chance you can get it for less. When the asset is put back up for auction, some of the people who were initially bidding on it may have left, which could lead to less competition and a lower price.
Don’t buy multiple items at once if you don’t have to. At some auctions, you might have the opportunity to buy 10 office desks in a single lot if you are the highest bidder. If you do this, you will generally end up paying more than if you bid on each desk individually. The reason for this is because the first few items typically fetch the highest bids. If you do not need all 10 desks, you are better off bidding near the end.
Last but not least, make sure the auctioneer can see you at all times, otherwise none of the strategies will do you any good!
