10 Tips for Buying in an Online Auction
The popularity of online auctions has increased in recent years and is expected to grow even more. Here are 10 tips to help get you started.
An online auction enables you to bid via an internet-connected device on a catalogue of different lots. These auctions usually last over a period of time. They differ from physical auctions, held in one location, as you do not need to be physically present.
Before you bid in an online auction, it’s necessary that you’re prepared for what may happen. This guide will help you to gain a greater understanding of online auctions which you, as a bidder, will need to look out for if you want to be successful.
1) Read the T&C’s
Each auction house has their own terms and conditions which you need to be aware of as you’re committing to them once you bid in their auction. There have been many instances where a failure to read the terms and conditions have resulted in problems for bidders - so it’s vital that you look at them to see how they will affect you.
You can find the T&C's attached to the auction. It's usually located in the important information section at the top of the auction.
2) Research the lots that you like
If you find an item you like, it’s important to conduct some research to understand how much it’s worth. This will help for when you start to develop your bidding strategy covering areas such as your budget.
Depending on what you're planning to bid on, you can use a variety of websites to find more information on the lot in question such as age, price etc. and you can also seek expert advice as well.
3) Check payment terms
Mentioned in the Terms and Conditions are the payment options which will apply to all bids in that auction. It’s important to get an idea of the payment structure before you bid because you can incorporate it into your bidding strategy.
For example, you can use the payment terms to understand when the auction house will request payment which you can use to ensure you have the necessary funds available.
4) Set yourself a budget
Setting yourself a budget can ensure you do not overbid on a lot. It’s also important to set a budget because when you bid, you commit. What this means is that during an auction, a bid is considered genuine and legally binding so the bidder will need to pay the full amount of the bid.
When you calculate your max bid, it’s also important to take into account any premiums and taxes applied as this will ultimately increase the end price. You can find the premiums and taxes on the auction's important information.
The terms that you need to look for are 'Buyer's Premium' and 'Sales Tax'.
- A Buyer's Premium is applied to the winning bid. It's usually in the form of a percentage and is applied to the price of the winning bid.
- Sales Tax is the tax applied to the winning bid. This is added to the final price.
5) Check the description is accurate
There may be a time where the description and image of the product are not corresponding. It’s advised to speak to the auction house for clarification and this can help ease any concerns you may have regarding the lot.
It's not advised to bid on a lot if you're not 100% sure of what you're bidding on.
6) Don’t bid unless you’re absolutely certain you want to
It’s not uncommon for bidders to become caught up in the moment and place bids which they would not have made under normal circumstances. This is called buyers remorse. However, as with any bid that you make online, you commit to it and if you have any doubts then do not bid.
7) Don’t jump into a bid. Look at the competition
During an auction, you will come across a variety of bidders who will join in at different times. It’s beneficial to gain an understanding of how the competition for the lot is evolving before you dive in with a bid.
This can avoid the prospect of you pricing yourself out by bidding heavily at the start of the auction and subsequently being outbid which means you end up losing a lot you like.
8) Don’t get caught up in a bidding war
Bidding wars are common in auctions and present many problems as it can increase the probability of people bidding above their means - as they attempt to secure the lot. It’s advised to always be aware of the consequences of a bidding war and to not get caught up in them as to repeat again, you commit to what you bid.
9) Monitor the bid increments
The auction house can set the increments for a lot which can spiral quite quickly as the bids rise through the different price bands. It’s important to monitor the increments so you’re well aware of how much the price is rising and then you can work this into your bidding strategy.
10) Narrow your interests
Each catalogue will contain an array of lots which you may find appealing. By understanding what you really want, you can set aside those lots for further research and can start developing your bidding strategy for those preferred items.
You can wishlist items to help segment your preferred lots from the rest.
Because 10 was not enough. Make use of this final tip to ensure your bidding experience is a great one!
Keep an eye on the deadline
Online auctions can last over a period of time. This can invite a lot of bidders over the lifespan of the auction and it’s important to check back often to see if there have been any changes to the status of the lot which you're bidding on.
If you feel you're ready to register for an auction take a look at what we have on offer.