To Auction or Not to Auction...

At Western Trading Post we believe, "If you want to find out the true value of something in today's market, put it in a well-advertised, well-attended auction and you'll discover it." Auctions provide the quickest way to gauge current market conditions. However, auctions may not be suitable for everyone. Are they the right choice for you? 

Auctions have been used for centuries as one of the oldest forms of selling property. They offer a fast-paced and exciting environment. Moreover, auctions provide transparency, allowing participants to understand the current market dynamics. Attending an auction with a good number of attendees is not only a great opportunity to socialize and network but also provides entertainment value at no cost. Nonetheless, the question remains: "Are auctions suitable for me?” 

Let's briefly examine the seller's perspective. Sellers who choose to sell at auction benefit in several ways. They know when their property will sell and can anticipate when the proceeds will be paid. Auctions are one of the fastest ways to move product or property. Additionally, sellers have the advantage of exposing their items to a large number of prospective buyers, with the auctioneer handling the marketing and other details. Sellers can also find comfort in knowing that auctions create a competitive marketplace, attracting multiple prospective buyers who compete to establish a fair market price. 

For buyers, there are several advantages to consider. Auctions provide an opportunity to purchase items at a fair market value based on actual selling prices, rather than asking prices. Buyers often have multiple choices available in one location, simplifying the purchasing process. Furthermore, buyers can be confident that sellers in auctions are motivated to sell, saving valuable time by avoiding sellers who are merely fishing for a specific price. In the case of online auctions, bidders can conveniently participate from anywhere and remain anonymous if desired. 

According to a study conducted by the National Auctioneers Association, over half of the total U.S. population has attended a live auction, with many considering them an exciting way to secure deals. The study also revealed that most people are willing to travel an average distance of 1.3 hours to attend an auction. Since auctions are open marketplaces with willing participants, they treat all parties involved in a fair and equitable manner. However, it's important to note that auctions may not be suitable for everyone. 

Some buyers find it challenging to control themselves at auctions, experiencing "auction fever" when bidding on desired items. These individuals often bid excessively in their determination to win and later regret paying too much. For people with this tendency, an online or absentee approach may be more suitable. By determining a predetermined price limit for a particular item and leaving a "max bid" online or with the auctioneer, buyers can avoid getting caught up in the excitement of the moment and exceeding their budget. 

Some sellers may worry that their property won't fetch a satisfactory price at auction. However, it is essential to recognize that, in most cases, sellers can realistically only expect to receive a wholesale price for their items anyway. For example, if you approach a dealer to buy your item, they will likely offer a wholesale price to account for their overhead expenses and desired return on investment. While consigning items to a gallery or consignment shop may yield a full retail price, this process often takes much time, and the seller generally pays a commission of 40% to 60% for the service. Meanwhile at auction, you may not always receive the full retail price, but most personal property auctions charge commissions ranging from 15% to 30% (less for higher-value items), resulting in a net profit at the end of the day similar to other selling methods. 

It is always advisable to work with an auction company that has a solid reputation and earns your trust, as is the case with any business. Although most auctions operate fairly, there are dishonest individuals in every industry. Even generic online platforms, such as eBay, can be manipulated by unscrupulous sellers. Unfortunately, cheaters will always find ways to cheat, so it’s best to just avoid them if possible. While the majority of auctions are reputable, it is crucial to conduct thorough research to ensure you engage with a trustworthy company. 

We leave you with a few peculiar occurrences witnessed at auctions. For instance, spouses bidding against each other for the same item while not sitting together. Occasionally, individuals attempting to drive up the bid for nefarious reasons and accidentally end up winning an expensive item they did not really want (karma at work). Certain bidders adopt quirky habits to playfully challenge the auctioneer, such as trying to wait until the last second to raise their hand and place a bid. Others do so by subtly making minimal movements, like raising a finger or eyebrow to bid. Some bidders engage in games with fellow participants like bidding on the same item as another bidder just because that person is bidding. While there are numerous amusing anecdotes about the unexpected events at auctions, it's best for you to attend one and experience it firsthand. It’s an experience you will not forget.

Jim Olson © 2017 (updated 2023)

View our auction schedule, current and past auctions here: https://auction.westerntradingpost.com/