Bidding at Auction: Antique Auction Bidding Strategies, The Business of Doing Business in Antiques – Journal of Arts and Collectibles – October 2002
I recently bought a Civil War surgical set, sight unseen, from an auction company 1000 miles from my home in Maine. I was the successful phone bidder, someone that auction attendees hold in minimal regard. I paid $3,640 including the buyer’s premium and shipping. It is my belief that I paid more for this item than necessary because I allowed myself to get trapped into two common mistakes made by buyers at auctions, I became involved in a run and I bid the whole not the half numbers. Had I been at the auction, I would have quickly broken up the run and changed my bid to the half or the quarter numbers. The auction process is stacked in favor of the auction company. Buyers have only a few tools at their disposal to level, as much as possible, the playing field.
I view attending auctions as going to war. The auctioneer is my enemy. He or she wants me to pay too much for the items that I buy. The other buyers are also my enemies, especially those who want the same items I want. Some buyers have more money than I do; others are willing to work for less profit.A few buyers are collectors who make their living outside the antique trade. Such buyers can pay more than an item is worth simply for the pleasure of owning it.
Friends and dealers with whom I have done business say that I am a grouch at auctions. I do not carry on conversations, I stay by myself, and I seldom smile. The reasons for this is simple, I am concentrating on the auctioneer, judging pace, how he or she conducts a run and looking for any weakness that I can turn to my advantage. I typically spend thousands of dollars at an auction. If I can save even 5 percent of this money, I feel that I have done my job as a professional dealer. I carry a notebook to auctions. I make a bidding chart for all the items I want to buy. For example: bidding increments for a $5000 item could advance $1000 at a time, $500 at a time, or $250 and a time. I called these three bidding increments whole numbers, half numbers, and quarter numbers.
I never bid whole numbers. I will explain why later. If the bid is advancing by half numbers, I bid the ’50s. If the bid is advancing by quarter numbers, I prefer the 25 and the 75 bids. If the bid is advancing by 10’s, I prefer the odd numbers, 1, 3, 5, 7, 9 not the even numbers. Most items sell in 30 to 45 seconds. The speed of the bidding is calculated to deny the bidder a chance to think. The best a bidder can do to execute professional well thought out bids is to follow a preplanned bidding chart that includes a figure at which to stop bidding. I will drop in and out of the bidding to keep myself at the proper bidding increment. To bid in this manner requires concentration and a preplanned bidding chart.
Nothing in this world is priced in whole numbers.
Gasoline is priced at $136.9, shoes are priced at $89.95, even an automobile that cost $30,000 is priced at $29,995.95. There is a psychological barrier between the number 99 and the next whole number. This barrier has been instilled in our psyche from youth. It is powerful and it is real. Make your opponents bid the whole numbers. If you learn one thing from reading this article, not bidding whole numbers should be that lesson. You will be amazed at the number of the items you purchase at which the hammer price ends with 50, 75, and 90.
STOPPING A RUN
A run occurs when an auctioneer singles out two bidders who want the same item.
The auctioneer will make eye contact with bidder number one and say $25. When the bidder signals yes, the auctioneer will turn his entire body towards bidder number two. He will make eye contact with this bidder and say $50. When bidder number two signals yes, the auctioneer will turn his entire body towards bidder number one, point his entire arm, not just a finger, make eye contact, and say $75.
If the auctioneer has been successful in establishing a run, he will then add rhythm and cadence. Like a song and three quarters time, he will keep his rhythm and cadence constant and flowing. With choreographed rhythm and body gestures he will sway back and forth between bidder number one and bidder number two. With each movement of his body, the bid will advance $25. The auctioneer is, in fact, singing an auctioneers song designed to pump dry the wallets of both bidders.
A successful run depends on timing, cadence, rhythm, and most important of all, eye contact. If you can interrupt the timing, rhythm or cadence, you can stop the run.
If you find yourself trapped in a run, simply stare hard at the auctioneer when he asks for your bid. Do not break eye contact. Do not nod your head yes. Do not shake your head no. Simply stare at the auctioneer. Make the auctioneer ask for your bid two, three, four, five times or more. This will break the timing and rhythm and slow down or stop the run.
STOP BIDDING FIGURE
Part of your pre auction notes must be a realistic figure at which to stop bidding.
The stop bid amount must not be based on wishful thinking. The buyer’s premium must be taken into consideration. If you are willing to pay $1000 for an item, your stop bid figure must be $850 or $875, if you do not bid the whole numbers. If you are willing to split the buyers premium with the auction house, your stop bid figure should be $925 or $950. However, the stop bid figure must be made before the auction. It is impossible for anyone to make a reasoned decision during the actual bidding process.
Recently, I attended a Skinner auction in Bolton Massachusetts. Skinner’s buyer’s premium is 17 1/2 percent. At the auction preview, I identified 29 items on which I intended to bid. I was successful in buying 12 of the 29 items. I changed my mind and did not bid on one item. I was able to purchase the things I did buy for $1280 less than my stop bid figures. In plain English, I bought these items for less money than I was willing to pay. The remaining 16 items exceeded my stop bid figures.
The 16 items that sold for more than my stop bid figures exceeded the price I was willing to pay by $2405. I was the under bidder on four of these items. Two items exceeded my stop bid figure by two bids. One item sold for five times my stop bid figure.
Every auction has its surprises. One item sold for $35,000 plus the buyer’s premium of 17 1/2 percent. This item cost the successful bidder, a phone bidder, $41,125. The unsuccessful bidder was a classic example of a bidder operating on an emotional high. In my opinion, his bidding methods, body language, and demeanor were classic examples of emotional bidding. He was bouncing on his toes and the balls of his feet. He interacted with those around him as the bid escalated. His nostrils were enlarged indicating that his body needed more oxygen. Without a doubt his heart must have been racing. I was not close enough to see his eyes. My guess is his pupils were dilated. He was clearly on a high brought on by adrenaline, emotions, and the bidding process. When the bidding stopped, the crowd applauded this man. I have seen this happen many times before and so has everyone who has attended auctions regularly.
In situations like this, I believe that an applaud is warranted. However, the applaud should be directed at the auctioneer, not at the bidder. Think about what the auctioneer has accomplished. He was able to sell an $8000 item for more than $40,000. If an applaud is giving as a recognition of job performance, the auctioneer performed his task exceedingly well and is deserving of recognition. The bidder, on the other hand, failed miserably by any standard and should not be applauded. I do not want to give the impression that I am against the auction service and the auction method of selling antiques. When I am the seller, I love irrational and emotional bidders. I favor auctioneers who can establish and maintain runs. I want the things I put in auction to sell for more than they are worth. The trick for the professional dealer is to evaluate and categorize both sides of the auction trade so that he or she can select the service or employ the tactic that best meets the need at hand.