Online Auctions Are Getting Bigger
The popularity of online auctions has increased in recent years. With traditional auction houses such as the 'Big Four' (Phillips, Sotheby's, Christie's and Bonhams) exploring the area further, expect online auctions to grow even more.
This new alternative for online shoppers has seen an increase in the number of platforms and auction houses performing online auctions.
Because no two auction houses are the same, we created this guide to help you have the best auction experience you can and not get caught out by hidden or vague surprises.
Online Auction Bidding Guide
Before you bid in an online auction, it’s necessary that you’re prepared for what may happen. This ranges from reading the T&Cs to the important information which explains the fees and charges that bidders can face.
1) Read the T&C’s
Each auction house has their own terms and conditions which you need to be aware of. The reason why is because 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 at the top of the page.
2) Research The Lots That You Like
If you find a lot you like, it’s important to conduct some research. The aim should be to understand how much it’s worth and the bidding strategy you want to use.
In the lot's description, you'll find key information such as the year it was made, the materials used to create it, the origin and more. This information will be enough to build a picture of the relevance or significance of the item.
Once you have an idea about how much you want to pay, you can factor this into your budget as you will need to take other considerations into account.
3) Review The Payment Terms
Mentioned in the Terms and Conditions are the payment terms for the auction which will apply to all lots. There will be deadlines for payments and also the premiums and taxes that you may need to pay.
It’s important to understand these payment terms because it will help to avoid any surprises or hidden charges.
For example, through the payment terms, you can understand when the auction house will request payment and this will give you time to ensure the necessary funds are available.
4) Set Yourself a Budget
Online auctions can provide a massive thrill and it can lead bidders to get 'lost in the moment' and bid more than they would like to on a lot.
To avoid this, there are platforms which let you set a maximum bid and this becomes your ceiling.
When you calculate your max bid, take into account any premiums and taxes as this will ultimately increase the final price.
The terms that you need to look for are 'Buyer's Premium' and 'Sales Tax'.
- Buyer's Premium - 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 - tax applied to the winning bid. This is added to the hammer price (the highest bid).
If that feature is not there, it's important to stick to your budget and not get carried away in a bidding war. The reason why it's vital that you don't is that a bid is considered genuine and legally binding. So, only bid what you're willing to pay.
5) Check the Accuracy of the Images & Description
There may be a time where the description and image of the product are not corresponding. Before you consider bidding on the lot, scrutinise the description and check the images match.
If you have questions or fears, it’s advised to speak to the auction house for clarification. They will relay your question to the vendor who can answer.
On the page of the lot, there should be a 'Ask a Question' feature and this will allow you to express any concerns you may have.
It's not advised to bid on a lot if you're not 100% sure of what you're bidding on.
6) Look at The Competition
During an auction, you will come across a variety of bidders who will join in at different times.
This is normal and forms part of the varying bidding strategies adopted by bidders.
It’s beneficial to gain an understanding of how the competition for the lot evolves because it highlights the interest in the lot.
It's advised to not bid heavily at the start because it may lead to you being outbid by someone else and pricing yourself out.
7) Monitor the Bid Increments
The auction house can set their own increments for a lot which can spiral quite quickly as the bids progress through the price bands.
It’s important to monitor the increments so you’re well aware of how much the price is rising by, so you don't exceed your budget.
Usually, the system will indicate what the next bid can be, so you're not in the dark!
8) 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 by wish listing them for further research.
Spreading your interests across several lots may be hard to manage and this can become overwhelming if you're simultaneously bidding on multiple lots.
9) Keep an Eye on the Deadline
Online auctions such as timed online can last over a period of time from a few hours to a few days.
It's not uncommon for bidders to place a bid and not return for the duration of the auction to find out they lost the item. due to this, bidders often drop in and out of auctions which forms part of their bidding strategy.
This unknowability about auctions can present a fascinating challenge for a bidder.
For those wishing to periodically engage with the auction, it's important to make sure you know when the lot closes and check back often to see if there have been any changes to the status of the lot which you're bidding on.
10) Is it Fake?
Online auctions can present a massive breeding ground for fraudulent activity.
Luxury items such as jewellery, watches and handbags are known to circulate and there are things you can do to avoid being caught out.
Scrutinising the images and making note of serial numbers and trademarks can highlight the authenticity of a lot. Be sure to research the lot thoroughly.
We have numerous guides on fake items such as luxury watches. check it out here: Fake Watch Guide Part 1 (2019).
If you feel you're ready to register for an auction take a look at what we have on offer.