How many of us know people who claim they know how to make money betting on horses, or playing poker, or going to the casino and playing all the games they have at their disposal? Success is simply how much money they make at the track or in the casino. But remember, mathematicians will tell you the house always wins in the long run.
But success in online auctions as an online bidder is a little more subtle. Getting the right antique or painting is important. So let’s start with a simple definition of what success means in online auctions.
Success means buying the right thing at the right price. More later on how to find the right thing.
Simple Strategies for an Online Bidder
There are really only four ways of bidding at online auctions which of course can be modified a little here and there.
Often employed by dealers or re-sellers who are looking to get product at reasonable or cheap prices. Here the buyer surveys the whole auction and leaves low or even minimum starting bids on as many items as possible. This approach leaves a large profit margin. The downside is that as an online bidder, you have no idea on whether you will buy anything or many things, and you may miss many good buys.
Organic Bidding Approach
Here the buyer bids on an item or items throughout the auction. It’s like an in-person auction but in slow motion. The downside is that most people wait until the end so you never know if you are going to win anything until the last minute. On the other hand, as an online bidder, you have the satisfaction of being in the lead throughout the auction and hoping for success. If the competition goes too high for you on a certain item you can drop it and not have to make a last minute decision. Also it gives you time to consider how high you want to go on any particular item as you feel out the competition.
If you check the box marked Bids you will know your total expenditures and your committed expenditures. Helpful for those on a budget.
Maximum Bid Approach
First-time bidders often ask what happens if they were to put in a higher amount than the minimum bid. This is called a maximum bid (you can always increase your max bid).
The answer is easy. The computer bids for you and places your max bid as one higher than any current competitor’s bid. Should you put in a bid of $400 for example and the closest competitor has a bid of $50, the computer will bid $55 for you, but never reveal how high you are going to go. If the competitor then ups her game to $60, the computer immediately answers with $65, and so forth. The advantages are that as an online bidder, you know your limit and are willing to stay put. It allows you to set your budget for your purchases. It also allows you to set your limit and bid automatically if you are away or tied up at work or watching a movie.
The max bid approach is particularly useful for commodities where the exact value is known such as a bar of pure 24KT gold. Weight times price per unit minus bid equals profit.
High maximum bids can often discourage competition as buyers who are bidding organically (#2) and can’t outbid the left maximum may give up.
On the other hand, one more bid near the end may have secured the article for you.
Living Bidding Approach
If you like the action and the thrill of bidding in real-time, this is the approach for you.
The computer sets a staggered closing time, each lot closing for example every 20 or 30 seconds apart unless there are last-minute bids. In the last hour on HIBID, lots can be shown in LIVE CATALOG format. Here lots with less than 5 minutes to close are displayed with a clock set on each item counting down finally to 5-4-3-2-1-0 seconds then closing.
Some bidders wait until seconds before the close to put in their bids. If there are bids at the last minute the bidding is extended by 1 to 3 minutes depending on the auction. But make no mistake the computer waits for no one. If the bidding is not extended the lots close at a pre-set time.
If you are bidding on multiple lots and a number are closing the bidding can be confusing. You need to focus on the soonest closing first always. If the bidding gets extended 5-10 minutes other later items will close so you have to pay attention.
You need to constantly refresh your phone. PCs and laptops operate in real-time and don’t need to be refreshed.
Bidding at the end in real-time increases your chances of buying the article. Left bids or max bids can be exceeded by just that one more bid. Low or starter bids can be picked off at the end.
The downside is that you can be carried away by refusing to let that other annoying anonymous bidder get the better of you. There is less chance to consider the value of the item. There is less chance to think about the quality of the item or whether there are other items you want more to purchase. There are definitely pros and cons.
What You Need to Know as an Online Bidder
Try out the different bidding strategies or combine them to your liking. But that doesn’t guarantee success. Success is also based on the quality of the item and its market value. You need to do your homework.
Today there was an article on Facebook about a deep-pocketed buyer who spent $310,000 on a Fry gas pump at Barrett-Jackson Auction which according to the writer Josh Kelly was worth $10,000. The action got hot, the buyer dug in and was “successful”. Well, it all depends on your definition of success.
A lot of items go for well less than what they deserve at online auctions because not enough people do their research. If something intrigues you, check out other auction records, call dealers, or auction houses, and ask questions. Ask the auction house with the current listing what they think of the quality of the item and what they think is the value. Check and compare. Develop expertise.
If you get the chance it is always a good idea to preview the online auction. It is not always necessary but you get the feel from seeing the items yourself.
If you have any questions or comments feel free to forward them to firstname.lastname@example.org. Feedback is always appreciated.