Auction Buying Demystified
An Insiders guide to buying the jewels while avoiding the junk at auctions.
Everyone likes a deal right? There’s always that chance that you’ll get something for nothing. You too can pay pennies on the dollar for prime merchandise. No other place gives the little guy the buying power of the professional than an auction…right?
Not unless you believe in fairy tales!
I’ve been buying used material handling equipment at auctions for over 30 years. Over that period of time I have purchased literally hundreds of thousands of dollars of equipment. The art is to find, bid for and buy the hidden jewels amongst a wide variety of worthless junk. I am about to share some of my best personal insights and advice on how to avoid ending up with the junk and avoid the parlor tricks designed to get you to overpay for the good stuff.
First let’s lay down some groundwork
Myth #1 – Auctions are a fair open market where buyers of all kinds have a fair and equal opportunity to bid on and buy equipment.
Myth #2 – The highest bidders always acquire equipment at prices lower than its normal fair market value.
Truth: Auctions are neither “fair” nor designed to provide the average guy on the street an equal playing field to compete against professionals. And yes, contrary to what anyone tells you, they are designed that way.
It’s true! Auctions are specifically designed to get you ‘the bidder,’ to bid and pay more money than you should, and to do it as quickly and effortlessly as possible.
The auction premise is based on human greed. The rouse that’s concealed from every new guy hoping get something for nothing is that they are out to turn your loss into their personal gain.
The story goes something like this.
An Amateur’s Game Plan
You’ve heard all the stories and decide today that you’re going to your 1st auction. You arrive at the auction and get a bid number. You peruse the equipment and think to yourself, “There’s really a lot of good looking stuff here.” The auction starts and you bid. You start bidding as low as possible till you hit your pre-determined bid limit – perhaps you come in under – maybe you splurge and go over (but just a little). In the end, you win an auction and pay your money. You go home with your loot and brag to all your friends & family about the great deal you got and how much money you’re ahead. You start planning on how you’re going to spend your money that you’ll make off of selling your purchase – or perhaps on how you’ll use the new items in your daily lift. Everyone thinks you’re incredible, a real genius. You fashion yourself a savvy buyer and smarter than the average bear.
Does this sound familiar?
There is an old saying in poker.
“If after 30 minutes of playing you can’t spot the pigeon at the table– you’re it!”
The fact is – that if buying everything at auction were really such a good deal – everybody would buy everything that way. What you didn’t realize was that even though you did indeed get a lot of stuff for your money you didn’t verify that you got it at a fair price. The reality is that you have as much of a chance (perhaps even a greater chance) of overpaying for your merchandise as you do of getting it cheap or even at a fair price.
Like I said starting out, I’m a professional buyer. I buy and sell equipment all day every day. I know going into an auction what to pay for each item I bid on and I don’t buy anything that won’t return a profit.
Here are the Facts
- Auctions are designed to sell stuff. All. The. Stuff. Good, bad and even really bad stuff.
- Auctions are designed to sell items for more, not less, than it’s really worth.
- Auctions are designed to confuse you into making bad decisions and mistakes.
- Auctions are designed to get as much of your money as fast as possible with no possibility that you can ever get it back – completely transparently and 100% legally.
In part 2, I will expose these top 4 auction insider secrets to give you a roadmap on how to use them to your advantage.
This is Part 1 in a three-part series about auction buying secrets. To view the other two parts, please use the links below.