Oct 13, 2023
Online auctions have revolutionized auctions and the virtual shopping landscape in general. Whether you are a seasoned bidder or totally new to online auctions, understanding how to navigate these online marketplaces is essential to enhancing your bidding experience. Our buyers are the lifeblood of our auction business. We dedicate a lot of time to developing relationships with the people that spend the time and resources to participate in our auctions. We thought that one way we could show our appreciation is through putting together a guide that outlines our biggest tips for successfully buying items at online auction. This guide can be applied to any auction company’s auctions, not just ours here at Pearce & Associates. The guide below will venture to outline strategies that will help you buy items at your desired price, save you time, and allow you to bid with confidence.
Read the Terms & Conditions
Tedious, yes. Important, absolutely. Reading through the terms and conditions is absolutely crucial for most effectively bidding in an online auction. The terms and conditions can vary greatly between different auction companies and even between different auctions from the same company. Reading them will help you understand what you are agreeing to before placing any bids, once you place a bid it is a legally binding contract.
Understand & Research the Item(s) You Are Interested In
Take the time to understand what you are bidding on and research what these items typically sell for. A good auction company will provide plenty of information in the description of the item to allow for quality research. Use this information to inform your budget.
Set & Stick to a Budget
The two headings above are vital to setting your budget. The terms and conditions will provide you information on what can expect for additional fees and the condition you are agreeing to buy the items in. This combined with your market research will allow you to set a budget that you are comfortable with.
Note: common fees that you will see with online auctions include buyers premiums & sales tax. You can usually find the buyers premium in the terms & somewhere on the bidding catalog page. Most online platforms will calculate your bid price with the buyers premium, but not all do so pay attention to this. Many times sales tax is not automatically calculated into the bid price. If you are not tax-exempt, keep this in mind as when considering your budget and bid prices.
Set a Reminder of When the Auction Ends
We frequently get calls the day after an auction ends from bidders who forgot the auction was ending the night before and missed out on items they wanted. Set a reminder in your calendar so you don’t miss out on items you really want.
Common Online Auction Features
Different companies and bidding platforms will have different features, but these are some of the most common features. Understanding these can be helpful in informing a bidding strategy.
Many platforms will have an auto extend feature. This means that bidding will extend if a bidder places a bid with a certain amount of time left in the auction. At Pearce & Associates our auto extension typically looks like this: if a bidder places a bid on an item with 5 minutes or less remaining in the auction, the bidding will extend 5 more minutes. This continues until bidding ceases. The reason this practice is so common is due the phenomenon of “sniping”, which if you ever participated in an eBay auction back in the day you probably know all too well. Sniping occurs when a bidder waits until the very last second to place a bid, leaving the other bidders without time to place their counter-bids. The auto extend feature gives all bidders a fair chance to place their bids.
Maximum Bid Feature
The maximum bid feature is a common, yet underutilized, feature of many bid platforms. This feature allows bidders to put in a bid price that is higher than the next bid increment. On most bidding platforms the bidding page will show the current bid, the asking bid, and then the location to input your bid price. As you can see in the image below of our bid platform, the location to place the bid says “Bid at least $14,750.00”. Many bidder will input the $14,750 bid. This is completely fine, but what usually happens is that when another bidder outbids them at the next asking bid price they have to go back in and place another bid. If you opt for a maximum bid instead, you would input a number larger than $14,750. For this example lets say you place a $20,000 bid instead. The bidding system will only show a current bid of $14,750 (the asking bid price), no other bidders will be able to see your $20,000 max bid. The bidding system will then continue to bid on your behalf until someone bids higher than $20,000. If no other bidders bid up to the $20,000, you will buy the item for the current bid price, NOT your maximum bid amount. The reason this can be an effective bidding strategy is because it allows you to set it and forget it, especially if you have a well established budget as we discussed above.
In the image above, you will see a button with an eye on it next to the bid submission field. You can use this button to add items to your watchlist. This allows you to go through the full bidding catalog once, add any items you are interested in to your watch list, then focus on these items for the remainder of the auction. This can save a tremendous amount of time, especially considering that many online auctions have well over 100 items.
Attend Inspection/Preview Days
If you have the ability to attend in person inspection, take it. Although a good auction company will do their best to provide as many photos and information as possible, there is no substitute too seeing and touching the items in person. There are two things that commonly happen when bidders come to inspection:
Be Aggressive Early or Wait Until the End to Bid
In the majority of our auctions, the most bidding activity occurs in the last 3 hours of the auction. Bidders have learned that bidding over the course of the auction is relatively inconsequential and opt to devote their time to the end of the auction. Conversely, one way to avoid a bidding frenzy at the end is to bid aggressively towards the beginning of the auction. This can scare off many bidders from competing with you. Don’t forget to set your reminders!
Bidding on items in online auctions can be daunting at first, but it is also a really fun and engaging way to shop for the items you want. Having the tools and strategies to bid with confidence and win the items you want on your terms only makes the experience more enjoyable. We are always dedicated to achieving the best results for our sellers. At the same time, we are dedicated to the bidders who make achieving these results possible. We hope that this guide provides helpful information to make bidding at your next online auction a great experience, try them out in one of our online auctions at www.AuctionByPearce.com or www.AuctionByPearceSC.com! Good luck and have fun!