There is no getting away from the fact that auctions are among the most exciting forms of commerce.
The thrill of bidding – and winning – goods people have set their hearts on cannot be beaten. Physical, or in-person auctions, also bring a carnival-like atmosphere to the bidding process, particularly if the auctioneer understands and plays to his or her audience.
In recent years, online auctions have become popular the world over. Being able to get your hands on a coveted item has never been easier, with the online purchase arriving within days of making the winning bid.
As the world emerges from severe lockdowns imposed as a result of the coronavirus pandemic, there is a very real need to procure items quickly and effectively to get businesses up and running again, and it is no surprise that people are turning to auctions for this purpose.
Lockdowns have also meant that people are not only spending more time online for entertainment purposes and looking for fun ways to shop, but the economic fallout of the pandemic has also necessitated that bargains for business purposes need to be found as a matter of urgency.
Construction equipment has been in particularly high demand. For example, construction industry publication PBC Today reports that at American auction giant Ritchie Bros’ recent event, more than 12,000 items were sold for more than $191-million (R2,8-billion) within six days.
Equipment included a range of earth-moving equipment and aerial hardware.
But sought-after items also extend to the art world. Business Insider SA reported in March that the Worldart gallery in Cape Town was the first to offer non-fungible token (NFT) art on auction in South Africa.
As the publication explains: “A non-fungible token (NFT) is a secure digital file which validates ownership within a blockchain system which represents an online ledger. Any digital art – including images, video game items and music – can be packaged and sold as NFTs.”
It is clear the digital revolution has made its mark, but also that auctions in general continue to hold mass appeal among buyers.
Craig Lubbe, CEO of South African internet auction and online marketplace bidorbuy, agrees that auctions are an “exciting way to shop”.
“There’s quite a thrill to see if you are the leader during the auction and watching people out-bid you as you play your part in the auction,” he says.
For Lubbe, the easy-to-use nature of the bidorbuy platform is an attractive proposition for customers.
It takes the form of ascending bid auctions in which bids are open for all to see. The winner is the highest bidder and the price is the highest bid, provided the (optional) reserve price has been met.
“Once you’ve found an item that you would like to bid on you can enter your bid amount in the space provided and press the ‘Bid Now’ button. You will see the minimum bid required in the box where you enter your bid amount.
“When you’ve entered your bid amount, you will be taken to a confirmation page, where you can set an optional automatic bid limit and check the shipping charges. You will receive an email confirming your bid, and every time the automatic bid feature bids on your behalf if you chose this option. It is important to remember to refresh your page regularly to ensure you have the most up-to-date information regarding the bids being placed on the item.”
Some of the items that often take bidders’ fancy include electronics, jewellery and gemstones, stamps and antiques and collectables.
“But that’s not to say you can’t find a deal for many other categories like clothing, toys and electronics,” Lubbe says.
“Many people seem to think auctions are just for pre-loved goods but we have many new items in our home and living, cellphones and gaming categories.”
Lubbe of course is perfectly positioned to have worked out the most effective techniques for successful onine bids.
For starters, he recommends that if possible, customers should not start their bids too low.
“Research the cost of the item beforehand and start bidding knowing the price of the item. People who are only looking for a bargain are intimidated by high rates and will give up when the initial figure is high. You need to keep in mind that you need to leave some room to increase your bid against serious buyers.”
He also says people should be ready to place a matching bid when other potential buyers place their bids.
“That is a psychological strategy that makes your competition believe that you won’t give up. You should also look for bidding items where few people are participating in the auctions. And go for short period auctions. A long auction encourages people to join in thus making it crowded – the more the people, the higher the prices on the item.”
Bidorbuy has experienced strong year-over-year growth, particularly within the months of January and February.
Ciena Bester, the owner and manager of 4 Auctions in East London, believes that auctions are the “only true indicator/measure to gauge what an item is worth”.
“A buyer will never bid more than what he perceives the item to be worth,” Bester says.
To Bester’s mind, a good auction is one where the correct stock is in place to drive higher prices, buyers have cash available, and sellers make a decent percentage profit
“We have weekly household goods, furniture and vehicle auctions which is well attended, even in these challenging times. I personally have done online auctions for SASSA recently which were well supported, but I prefer live auctions as I can engage my buyers and build a rapport with them,” Bester says.
“I can also gauge if I can pull one more bid from them before the bid closes. For me it’s all about the relationship and engagement with every buyer and seller.”
Bester says it is important for bidders to view the goods they intend bidding on before the auction starts, so they can familiarise themselves with the items and their condition, as well as the auction terms and conditions.
“Decide what you want and what price you are willing to pay for the item and bid only on the goods you intend to buy. This avoids disagreements and disappointment when the sales are completed. Also please only bid with the money in your pocket, as auctions don’t allow for bids subject to bank approval.”
According to Bester, it is always helpful to have bidders who understand the system. This allows momentum to be picked up when it needs to be in addition to helping the “auction chant” proceed smoothly.
“If the auctioneer has to start pausing to wait for the crowd to catch up it leaves the floor open for misunderstandings as people lose track of where the bid price is at.”