Terms You Should Know When Bidding in Live Auctions
Here’s how a live auction generally plays out: an auctioneer shows an item, prospective buyers raise their paddle numbers to place increasing bids on the said item until no one else does and the item is declared sold. If you’ve been to traditional in-person auctions before, then you probably know the drill.
Why Live Auctions
A live auction, also known as an onsite auction, is popular among not-for-profit organisations. It’s a great way of raising financial support and throwing an unforgettable night or event that will keep your donors and supporters engaged. A live auction is usually conducted in a physical venue, such as at a fundraising event.
During a live auction, the bidders can see the behaviour of the other bidders, and they compete openly to get an item. With such competition and a skilled auctioneer convincing the audience to participate and bid, there’s nothing like the excitement you’ll feel while in this type of auction. Furthermore, a live auction typically gets bids that are close to or more than the item’s market value.
Glossary of Auction Terms
Before you dive deep into the competitive pool of live auction ideas, here’s a list of must-know auction words and phrases:
- Auctioneer: A trained agent hired by sellers to conduct the auction. The auctioneer is in charge of describing the ‘lot’ (item or group of items up for bidding), initiating the bidding, receiving the bids and engaging the competing bidders in an orderly manner.
- Bid: The term ‘bid’ refers to a legally binding price offer that an interested buyer proposes to purchase a lot. Auctioneers open the sale with the lowest possible bid (known as the starting bid) and raise the bidding price in standardized increments. The auction for an item closes when the auctioneer’s hammer falls on the final winning bid (also called hammer price).
*Absentee Bid: If you’re an interested bidder who cannot be present during the event, you can still submit a bid range through an absentee bidder who will present a bid on your behalf.
- Catalogue: Printed or online listings of the lots up for auction. It contains photographs of the auction items and factual information, e.g. detailed description, provenance (the item’s ownership history) and condition of each lot.
- Reserve Price: The undisclosed, minimum price of an auction item. Bids lower than the reserve price will result in the item not being sold.
- Fair Warning: An auctioneer’s last-chance warning to bidders to offer a higher bid for an item. Once no more offers are cast, the bidding closes and the lot is sold.
Some more phrases to note:
‘Reserve has not been met’: It means that the bids placed fall short of the seller’s reserve price for the lot. The seller may or may not auction the item.
‘Pass/bought in’: If an item gets no bidders or does not get bids that reach its reserve price, the auctioneer declares this phrase – meaning the lot is kept and left unsold.
‘No Reserve’: Sometimes called absolute auction, where there is no minimum price, and the lot is won by the highest bidder.
How Do You Bid Successfully At an Auction?
Before you sign up, it is important to understand the risks of purchasing from an auction. Is the auction trustworthy? Are the seller’s products priced fairly? Make the necessary background checks first and research about the reputation of the auction organiser.
More importantly, don’t skip on reading or knowing about the terms and conditions of the auction you wish to join. You need to know what you’re signing up for. Terms and conditions are unique for auction houses and should be accessible on their website. Study the available platforms they use and the protection they provide to buyers. Take note of the registration requirements, schedules and auction mechanics.
Also, look into the required fees, extra charges, buyer’s premium, as well as the means of shipping or getting the items. Check for payment methods that are secure to protect your money and information and ensure that your finances are in order beforehand.
To strategise in advance for the auction, consider registering early. Go over the lots and preview to know which auction items you will bid on later. Inspecting the condition of the items will help you gauge if they are worth your money or not.
Once bidding starts, select a few items and set maximum bid limits for each. Keep in mind of your endgame to avoid getting caught in impulsive bidding. You should also be prepared to match competing bids, especially for items that will be likely attractive to other bidders.
What Is the Best Way to Bid on an Auction?
It takes time and experience to get the hang of participating in auctions. Here are a few strategies on how to bid on live auctions:
#1. Don’t start too low with your bid. This is a common misconception for those who wish to get an item at a low price. Your bid should be high enough to filter out bargain bidders, but low enough to compete with serious buyers.
#2. Target the less active items. Some items in an auction are similar to one another. Don’t fixate too much on the lot with many competing bids if there’s another one with fewer bidders.
#3. Auction squatting. This strategy involves placing your bids early on and monitoring the site as increasing bids happen. The advantage is you’ll be able to bid faster and more often, which is a psychological tactic of showing how serious you are about winning the item.
#4. Ace last-minute bids. Also called ‘auction sniping’, a trick that employs adding a few cents to the top bidder’s bid amount towards the end of the auction. Be mindful of the auction policy and features that may counter this, such as automatic extensions.
Helping Hand Group Auction Services: Lending You a Helping Hand
Looking to bid on charity auctions?
Keep tabs with us at Helping Hand Group. With regional offices in Australia, we are available for event consultations for auctions in Sydney, Brisbane, Melbourne and Perth.
Our inventory of auction items is constantly updated. Ranging from autographed memorabilia to exclusive holiday packages, find yourself astonished at our extensive list of unique, exciting items. With our network of professional auctioneers, we can assure you of fundraising events that are fun, engaging and successful.
Want to know more? Contact us today.