Use these insider tips to bid smart, avoid costly mistakes and seal the deal
Everybody is looking for a good deal on a great piece of equipment. Online auctions can be a smart way to find what you need for the price you want, but they come with their own unique challenges. You are bidding against other potential buyers who may push the price higher than you want to go.
Unlike buying from a store, or even the classifieds, auctions are dynamic sales where prices are flexible and changing constantly. This can be intimidating, yet with a strategic approach you can use this fluidity to your advantage. It takes a disciplined, well-thought-out bidding strategy to win. How can you maximize your buying potential and minimize risk? Read on…
Do Your Research
Seems obvious, but the more informed you are about all aspects of your intended purchase, before the auction begins, the more likely you are to walk away with a great deal. Auctions move fast and unexpected factors can crop up. Do your research beforehand and enter the bidding armed with the information you need to bid with confidence.
- What’s fair market value for the item you’re bidding on? You have to know what it’s worth! That way you know when to stop bidding (or that you scored a great deal).
- Will the purchase come with fright and customs expenses? If the auction is not being held in your hometown, you will need to arrange transportation. Is that covered by the auction house? If not, how will you cover those expenses?
- Will you need financing? What is your financing limit? It can be very helpful to talk to a lender like Thomcat Leasing before you begin the auction process. No one wants to find out too late that they can’t afford what they bought. Getting pre-approved lets you bid with confidence and ensures that you can get that new purchase working for you smoothly and quickly once the bidding ends.
Know Your Maximum Bid
And stick to it. Auctions are known to bring out the competitive side in people and once the adrenaline is flowing it can be hard to back down. Know your limit and pull the plug when the bidding surpasses it. You are looking for a deal, not an expensive bidding war. Some online platforms will allow you to set a maximum price and once you’ve reached it will remove your bid from the running.
Wait It Out
Jumping in early with a bid can actually drive the final price up. By doing so you draw attention (and therefore more bids) to the item you’re interested in. People tend to attach more value to an item with a crowd around it. Be subtle and wait until closer to the end of the auction period before committing yourself.
Once you decide to move on an item it pays to bid aggressively. Auction items tend to start at a much lower price than they are worth and that attracts low-ball offers from bidders who are just looking for a bargain. As mentioned earlier, you don’t want a lot of attention around items you’re interested in. If you see this dynamic playing out around your item, show you mean business by raising the bid price to something closer to your maximum bid. Thereby forcing the bargain hunters to look elsewhere. Don’t bid your maximum, as you may need to counter other serious buyers later in the bidding, but put down enough to make your item unattractive to the bargain hunters.
Avoid Round Numbers
In timed auctions, successful bidding involves thinking differently than your competitors. If you think an item will sell for around $30,000, put your bid in at $30,056.23. That extra bit can push you over the other bids without costing you much. Other bidders may try similar tactics, so check back frequently until you’ve found the balance between not enough and that little bit extra.
Immediately Match Counter Bids
This tactic tells the other bidder you’re serious and can have the effect of intimidating them into thinking you won’t quit. Successful bidding can require a good poker face and online auctions are no exception.
Focus on the End of the Auction
It all comes down to the last word. Especially in timed auctions, the last few minutes are the critical stage and where the auction is won or lost. You don’t have to sit and watch the screen all day to win, but make sure you’ve noted the closing time for bidding on your item and bid during those final minutes. Most winning bids are placed right before an auction closes.
Win Your Equipment Auction
Plan well, do your research, stick to your bidding strategy and your approach will pay off in the long run. It may take practice, but eventually you’ll walk away with an awesome deal on the equipment you need.
We’re happy to arrange a FREE pre-approval for you. Thomcat Leasing has been providing the financial tools you need to win since 1989. We don’t use pressure sales tactics or try to hide the real numbers – because the real numbers aren’t that scary. We offer good advice, personal service, and affordable rates to small businesses in Canada. Experience our difference yourself by completing a free pre-approval application for your next auction!
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