Gotchas
Gotchas Part II
One of the techniques used at a live auction, where there is an auctioneer barking out bid requests is to get your emotions jumping. The quick tongue of these professionals works miracles in extracting additional bids from those in attendance, so make sure you keep yourself in check. One way to do this is to set a limit on what you are willing to bid. You can keep this amount tucked away in some part of your brain or you can write it down in advance of the auction; that way the auctioneer will be less likely to prod you beyond your fixed limit.
Online auctions don’t have an auctioneer, but they still manage to get the excitement going, especially in the last few seconds of the auction. One way to avoid this is to use proxy bidding, where you bid the highest amount you are willing to bid. The computer then bids up your bid as necessary, while its bidding against other bidders, until it reaches your max bid.
Setting these limits for yourself in advance of the auction will help you from over bidding due to the excitement of the auction.
Don't assume it's a bargain. Throughout our tutorials, we have stressed again and again the need for you to know what the market value of the item is before you bid on it. Flying blind on values is a sure way to crash and burn on bargains.
Fortunately, there are a few techniques you can use to prepare yourself for bidding. Guidebooks, which specialize in a type of items, stamps for example, will list values and conditions. These books can be purchased online at Amazon.com, and typically they are inexpensive. For example, the most current Kelly Blue Book, the industry standard for car values, costs under $10. Going to a used car auction without one would be nuts.
Comparison-shopping is also a great way to determine market values for items. If you see something you like, look it up on the Internet. Use eBay, Amazon.com and comparison-shopping sites like www.shopzilla.com to see if you can find a similar item you are interested in bidding on.
Going out to the malls and big retailers like Walmart, Costco and others is another way to check for values. These brick and mortar companies do an excellent job of buying and they keep their profit margins low, sometimes providing a better bargain than you will find online.
Another way to see values it to follow auctions for a while. This is less accurate than some of the other methods because people can overbid for items, but if you watch a number of auctions, an average selling price becomes obvious and you could use that as a guide too.
Ebay provides an excellent Market Research service, which allows you to check on average selling prices for items that are in their system. This is reasonably priced, so if you are an active auction bidder, it can really come in handy.
Read return policies carefully. Nothing is more idiotic than bidding up an item at auction, either online or offline, and making the assumption that you can return the item for a full refund. Most government auctions do allow returns of any kind, with the single exception being if the item is misrepresented. Government auctions are typically very thorough in their representation of the items, so the chance of being able to bring something back for that reason is extremely small.
Almost all auctions, online and offline, have restrictions of some kind on returns, and this is where the transaction can be vastly different than the retail environment, which strives to make that process easy, hassle-free, and with no penalty financially.
Online auctions are a different animal altogether. They represent a wholesale purchasing environment, not a retail one. You need to factor this into your bidding. Even if the auctions accept returns, there is almost 100% certainty that they will not pay for the return shipping charges.
Be careful about eBay sellers who promise 100% money back guarantee as well. While some of them are legitimate, keep in mind that eBay will not force anyone to give you money back. Again feedback ratings are key, so read them carefully.
