We all like to save money when we shop. We love bargains!

A few months ago, I was in the market for a new duck boat. I knew what I wanted and went to see it at a dealer’s location. The man quoted me a price. I thanked him and promptly went to another dealer to look at the same boat - the exact make, model, size, layout, and features. 

The second fellow quoted me a price for his boat and it was more than $2,500 less than the first dealer wanted. I now have a new boat for the upcoming duck season. Do I have to tell you which dealer I bought it from? 

We all like a good buy whether it is on a duck boat or something much different and that includes bidders at auctions. People go to auctions in hope of finding deals on what they want and saving a lot of money, just like I did on my boat. Bargain is the name of the game for most shoppers. 

So do all auctions offer bargain buys? No they do not, but many do if bidders will exercise patience and bid with discipline. What is important for bidders to know is that some auctions are a lot more likely to produce bargains than others. Consequently, it is worthwhile to know what types of auction commonly offer bidders the best opportunities to pick up some sweet buys. Here are some key indicators for bidders to look for when searching for great auction opportunities. 

Seller.

You cannot always know the identity of the seller(s) in an auction but, if you can determine this information, it can sometime give a clue as to whether there will be a reasonable chance to acquire some things for sharply discounted prices. Consider the following.

Natural persons have strong emotions that sometimes mix into and influence how they do business. They can also have unrealistic price expectations for what they offer to sell at auction. You have heard the stories of sellers who ran up to their auctioneers and grabbed some object or another back when it had just been struck down to a buyer for what the seller perceived to be too little money. Likewise, you have heard of difficult sellers even cancelling the entire auctions in midstream, because they did not like the prices that buyers were offering. These sellers were natural persons. They were not administrators, executors, corporations, or other forms of commercial enterprises. Natural persons are people just like you and me and they are usually the least able to stomach low-selling prices and, therefore, offer only limited prospects for selling bargains at auction. 

Artificial persons are entities established under law which are vested with some, but not all, of the same rights and responsibilities as natural persons. Corporation and limited liability companies are two common types of artificial persons that are both business enterprises. Auctions for these types of sellers sometimes offer outstanding bargains, because auctioneers will tell you that, unless these are small mom-and-pop entities, nobody will be crying when the gavel bangs on an artificial person’s lots. 

Representatives for natural persons such as administrators, agents, executors, and trustees are an important step removed from the people they represent. This crucial distance has the effect of screening out the emotions and feelings that can play into auctions with natural persons involved with their own property. This means bargains are more likely to be available when representatives such as these are serving as the sellers.

Auctioneers often sell their own goods at auction as part of their business. This scenario is usually one of the worst in which to try and buy bargains. Auctioneers know what the goods they handle are generally worth and, when they own them, there is a certain amount they are going to insist on being paid before they will sell anything. The potential for good buys is less with auctioneers than with either artificial persons or representatives, but greater than it is for natural persons. This is because auctioneers think in terms of dollars and cents and want to make sales. As noted above, natural persons are often ruled by emotions and unreasonable prices expectations.

Auctioneer.

The identity of the auctioneer can reveal a lot about how an auction will be conducted and where selling prices might hit on the bargain pole. Here are several factors to know and consider. 

What kind of “following” does the auctioneer have for the auctions she conducts? I mean how many people can be expected to attend an auction and who are they? If the auctioneer draws a strong crowd of active bidders for each auction, the chance of super buys will be diminished due to the demand for the auction lots that these attendees will create. 

Additionally, is the auctioneer’s “following” heavy with dealers or end users? The former buy to resell. The latter buy for direct use. The former cannot pay but so much for what they purchase, because they have to be able to apply a markup and make a profit from a resale. The latter are concerned only with getting what they want on a personal level and the business need to make money through a resale of the lot does not enter into their thinking or bidding. The former represent a wholesale market where prices will be lower and bargains more plentiful. The latter create a retail market where prices will be highest and bargains much harder to acquire.
 

Do the auctioneer’s procedures pose an opportunity for bargain hunters? By example, an auctioneer might be known to generate strong prices at the beginning and middle stages of an auction, but then tail off sharply as the best lots are sold and the bidders with the most money drop out of the bidding and leave the event. Auctioneers who “ride the money down” like this commonly schedule their least desirable lots for the backend of an auction when prices will be softest. It is not uncommon for some of these wind-down lots to be worthwhile items that can be acquired for really attractive prices when bidding pressure for them will be low. 

Is the auctioneer a straight shooter or a crooked snake? A straight shooter will allow the market of bidders to establish selling prices through legitimate, competitive bidding. The snake will use various illegal tricks to artificially manipulate the bidding and inflate selling prices. These tricks commonly include the purposeful misrepresentation of the lots, the use of shill bidders, calling phantom bids, and other forms of deceit and fraud. While bargains can often be had from honest auctioneers, the best bargain you will ever get from a crooked one is to skip it and take yourself and your business to an honest auction.