Strategies for Successful Bidding
Seasoned bidders always seem to win everything, right? Well, the truth is
that anyone can win anything just by bidding more, but the idea is to get
what you want at the right price. How is that done? The answer depends on
many factors, but to help you weigh those factors, here is a run-down of the
three bidding methods and their advantages and disadvantages.
Live Bidding is placing your bid in real time while the lot is opened for this purpose and for a short period of time by the auctioneer. For a floor auction this means raising your paddle when the caller asks for a bid; for a live Internet auction this means clicking the “bid” button when it is green.
1.) You can watch your budget and spend only when you have the money, as opposed to placing bids on multiple items ahead of time without knowing which ones you will win.
2.) You may bid on a series of similar or identical lots and stop bidding when you win one, as opposed to winning them all by bidding high on them all ahead of time just to make sure you get one.
3.) Competing bidders cannot track your bidding habits and notice how much “padding” you put on proxy bids when you get outbid.
4.) You know the results of your bid immediately and whether or not you won the lot.
1.) In a live Internet auction, an electronic glitch at either end could prevent you from bidding live. In a floor auction, the auctioneer may miss your bid or award the lot to someone else bidding at the same time.
2.) You must diligently maintain a watch list, or else possibly forget to bid on an item you want.
II. Prior Bidding
Prior bidding means placing a bid for just the asking amount ahead of the live closing for an auction item. This bid may or may not put you in the lead, depending on the proxy amount placed by the previous high bidder.
1.) You can see where the current bid level is and know right away if you are outbid by a proxy.
2.) If you are outbid prior to the live closing, you will get an outbid notice and be able to rebid either before the live closing or during the live closing (after not spending your budget on previous lots, for example).
3.) If you know you will be bidding much more than the current asking bid, then you can use prior bidding to incrementally “push” the previous proxy bid (if any) to a higher level and possibly discourage more bidding on the lot during the live closing.
1.) Any further bid will outbid you.
2.) You will be restricted to the asking increments, whereas proxy bidders can put in any number higher than the asking bid.
3.) If your prior bid is outbid during the live closing, you will need to monitor it live to bid again if you are outbid, and another bidder could jump on the number you want to bid before you can.
4.) You are committed to the lot if no one outbids you.
III. Proxy Bidding
Proxy bidding is bidding prior to the live closing by placing a bid for the absolute maximum amount you are willing to pay for an item. The iCollector platform does not show your maximum amount but keeps you in the running (by “proxy”) until your maximum has been exceeded by other bidders. This allows you to win the item for as low a price as possible.
1.) You only have to bid once.
2.) You do not have to keep monitoring the lot because you know you will be in the running till your maximum is exceeded.
3.) In the case of a tie bid by a later bidder, you win the tie by being first.
4.) If you lose the lot, it will be because someone is bidding more than your maximum, not because of any other factor like forgetting to or not being able to rebid live.
5.) A high proxy bid ahead of time that is bid up by others gives the impression of a limitless bid that discourages the competition.
6.) Most important, you can put in any number you want over the asking bid, giving you the advantage of being able to force your competition to bid a full increment higher than your number.
1.) Your proxy bid can get run up ahead of the live auction, or during the live auction, and you will be unable to defend it if you are outbid live unless you switch to live bidding.
2.) You are potentially committed to lots ahead of the live closing, making it difficult to set a budget.
Each bidding method is right for a different situation, and often the best option is to combine two different methods, especially when there are items you want no matter what your budget, versus items you want only if you get them at a decent price. In fact a combination of all three methods is the only way to be sure you get what you really want (for there is no longer such a thing as a “buy bid,” contrary to traditional practice): Place a high proxy bid as early as possible to scare off competition, then follow with an incremental prior bid if you are outbid, concluding with monitoring during the closing to place a live bid if needed.
Proper usage of the three bidding methods will save money and time. In the end it just takes experience to do well at auctions, and our best advice to new bidders is simply never to give up. Good luck out there!
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Daniel Frank Sedwick, LLC
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