Tip o' the Week 359 – How to win at auction
Auctions are big business, and seemingly growing, fuelled by the internet in no small part. Many traditional auctioneers (purveyors of objets d’art, toby jug knick-knacks, old shotguns, that kind of thing) have moved online, and you can buy all sorts of stuff, even watching the auction streamed live and to bidding in real time.
It’s never been easier to both lose your shirt and end up with something you didn’t want, at the same time.
Auction houses offering online services often go through aggregators like The Saleroom or i-bidder, which let you search across many sources for the thing you’re after, even emailing you when it shows up. Looking for 1970’s Lladro figurines or a 1960’s Rolex? Roll up, roll up.
Auctioneers do charge handsomely for the process, though – often levying 20% buyer’s premium on the hammer price, plus VAT on the buyer’s premium, then some have a 3% internet surcharge (plus the VAT, of course) and you might need to pay a good chunk to get a courier to uplift your item and send it to you, should the auctioneer be on the other side of the country. So, a £100 bargain purchase could soon end up being £150+. Sellers usually pay fees too (maybe 20% of the hammer price) , meaning that the only winner in the whole cycle is the auctioneer.
The obvious auction site to think about when considering online trading is eBay (or colloquially, The Bay or Fleabay) . Buying on eBay takes a bit of practice, if you’re looking to source the kind of last-minute Christmas pressies that you can’t afford to be fake, inoperable or just not turn up at all. A lot of the same tips apply ot other online auctioneers, though.
One entrepreneur-in-disguise set his teenage kids a challenge one year, where they got some surplus guff out of the loft, and told the kids they could keep half of whatever they achieved on eBay – which set them in action, spending hours figuring out how best to describe the items, looking at what others were selling for to help set pricing, taking decent photos etc. They made a small fortune.
Let’s assume you’re thinking of buying something at auction that’s valuable enough to make you want to put a bit of effort into it (ie it’s no USB charging cable coming from China)…
Do your research
Sounds obvious, really, but when deciding if you want to bid on an item, you should know as much as possible about it – so you can be sure that the one you’re buying is genuine, in good condition and fairly priced. Look on internet forums (where people who do know about the things often share advice on where to get the best deal when buying new, or trade them in “for sale” sections amongst themselves, with no fees and maybe a better feeling of legitimacy). When buying new on eBay, lots of traders will inflate their prices a little to cope with the fees they have to bear, so do make sure there’s not a cheaper or better option.
On the ‘bay, if something looks like a bargain, is that because the seller doesn’t know what they’ve got (which could be great news, or really bad news) or, do they know it’s a dud, and the reason there’s no other interest in it is because everyone else does too? Similarly, on Gumtree (home to even higher percentages of charlatans than eBay) , if someone’s selling a brand new item at 1/10th of it’s real value, then it’s very likely not completely Chicken Soup.
Set your maximum ££ and stick to it
If buying at an auction – a physical one especially, but equally applicable to a streamed online one – make sure you know how much the item you want will cost you; a ready reckoner in Excel with all of the fees that will be added to the hammer price might help. Decide how much you think the thing is worth to you, landed and in your hand; set yourself an absolute max, and if the bidding gets to your maximum then consider yourself lucky, as someone else is going to overpay for the thing, according to your expert and considered opinion, right?
Many online auctions – and eBay – let you put in a bid in advance (up to a maximum amount) , where you will automatically bid on an item and its price will go up in set increments until nobody is prepared to bid higher. Again, if you set the maximum and you’re outbid by only one buyer for just £5 more, then you might wish you’d put a bit more on the maximum, but the other buyer could have set a much higher threshold and all you’d have done is escalate the price.
eBay supports a particularly sneaky way of buying, using a sniper service. These are, in short, third party sites that log into eBay using your supplied credentials, and inject a bid right at the last few seconds of an auction. Using snipers might seem like cheating a bit, but if it means you outwit all the others who’re sitting at their screen in real-time trying to bid, and you don’t cause excessive price inflation by bidding-up early on, then you’re the dog and they’re the sheep.
There are some fairly detailed advice articles on when to use a sniper to best effect; the tl;dr version is that if there lots of people watching an item, and you see a lot of bidding activity way before the auction is due to complete, then sniping may not be all that effective, especially if it looks like 2 or 3 bidders are constantly outbidding each other.
Even when sniping, you’re in competition with everyone who’s set up an autobid in eBay already. Having said that, there’s no sweeter feeling than swooping in 2 seconds before an auction ends, and scooping something up for less than the maximum you were prepared to pay (since the snipers let you set a max bid too).
Buy the seller
It’s never more important than when trying to buy something that is going to cost you a chunk of change, and especially if it’s something you expect to retain value and possibly be resold in future (moreso cars, jewellery, artworks etc, than relatively disposable or quickly depreciating things like clothing or consumer electronics).
If buying from an online auctioneer, how established are they? Look at their past sales (most let you browse their catalogues to show previously achieved prices, or the auction aggregators may show that too) to see if they sold things at a premium compared to others or if they looked like they were happy to flog shonky gear. You’d be amazed at the Frankenwatches that some supposedly reputable auctioneers punt onto unsuspecting buyers.
On eBay, check out the seller – look at their previously sold items, and their seller feedback. Have they got plenty of history of buying and selling? If they’ve just registered with eBay, have no feedback and are based in some far-flung place, then proceed with the utmost caution. Smarter con artists will try to cover their tracks by registering an account, and racking up loads of small trades to get history and good feedback (maybe they’ve got dozens of accounts that are all busy selling things to each other and saying “A+++ buyer” with positive feedback on each one…) . If they don’t look like they’ve got history of selling expensive stuff, then your spidey sense should be on maximum attack.
If the seller has an external website and trading presence, check that out too – if they’re a UK limited company then they’ll be registered at Companies House, where you can get company details but often also the home address of the named directors. Plonk the address into Bing Maps and think, does this look like the house where someone trading in £2,000 handbags might live?
Find out how much “Best Offers” went for on eBay
eBay doesn’t make this easy – you can easily search for previously sold items to see what they went for in open auctions (using the Advanced Search, check the box for Sold, though the Completed Items check box can be useful as it shows things that reached the end of their auction and were not sold) . If the seller set a fixed price yet allowed a “best offer”, it’s quite possible they ended up accepting a figure a long way short of their asking price. That’s worth knowing if the seller regularly shifts the same thing (like garden furniture), or when you’re trying to guage the real price for something.
When looking at a previously sold item on eBay, if you grab the eBay item number from the listing and paste it into the Keywords field on http://www.watchcount.com/ then click the Show Me… button, it’ll reveal the actual selling price, or send you to a deep link in eBay which does. They also have a worthwhile search feature, showing sold prices including best offers.
There are other tools out there like Goofbid’s Best Offers Tool that will show you, based on the seller’s ID, what offers have been made and whether they were accepted or not.
Pay with care
Finally, if a seller gives you any reason to pay them by direct bank transfer or means other than PayPal, be very careful, the only arguable exception being if it’s cash on collection, where you’re actually meeting them and get to inspect your item before handing over the cash and taking it away. If you bank wire someone the money to sell you something, and all they ship you is an empty box, you may find it very hard to get your money back…