A Simple Guide to Online Auctions

A Guide to Online Auctions in Calgary

Online auctions are more popular than ever before. They’re an easy and fun way to score great deals on a wide range of products, from major purchases to common household goods and everything in between.

However, if you’re unfamiliar with the world of online auctions, they can seem overwhelming and confusing. How do you find reputable auction sites that sell high-quality items? What bidding strategies should you use in order to win the items you want? If you’re not sure how online auctions work, our simple guide to Calgary online auctions will teach you everything you need to know.

Online Auctions are for Everyone

When you picture an auction, do you imagine a room filled with people bidding on rare and expensive artifacts or vintage sports memorabilia? While it’s true that some auctions feature unique, high-end items, many online auctions also sell everyday products at low prices. You can find awesome deals on a huge range of products, including:

• Clothing
• Cars
• Home furnishings
• Household goods
• Music equipment, art, photographs, and jewelry

Public auctions are a great way to find great deals on items you use every day. They’re increasingly popular among young people with regular incomes, not just those looking for a way to spend their extra money.

How Do Online Auctions Work?

You’ll find no shortage of online auction sites in Canada. Some specialize in specific types of items, while others sell a bit of just about everything.

Reputable auction sites require registration before you can bid. You’ll need to set up an account with your real name, email address, and usually some other identifying information. Many people prefer to use a separate email address solely for auction registration.

The auction itself is usually simple and straightforward. Each lot will have a predetermined time limit. During that period, participants try to outbid one another. The highest bid at the end of the auction’s time period wins the item. Typically, the buyer and seller will communicate via email soon after the auction closes to arrange payment and delivery.

Many items have a reserve price, which is the minimum price they’ll accept. The auction will close without a winner if the bidder doesn’t meet this reserve price.

Internet Auctions are typically divided into two categories:

• Business to Person
• Person to Person

The site has physical control over the merchandise offered for sale in a business-to-person auction. Many businesses, such as overstock, liquidation, or wholesale businesses, sell merchandise exclusively through auctions. In other cases, a business might be involved in a liquidation sale, so they want to sell everything at once in an auction. As a buyer, you’ll pay the auction site directly.

In a person-to-person auction, the seller has control over the items, not the site. The site runs the auction and connects the two parties, but the buyer and seller deal with payment and shipping directly. One example is an online auction site like eBay.

Browse Before Diving in Head First

Almost every online auction lets you view the merchandise database before the auction starts. You should take advantage of this information to research the items you plan to buy, especially for unique items such as artwork or high-end items such as vehicles.
Learn the approximate value of the item you plan to bid on. Also, familiarize yourself with any aspects of the item that might affect your purchasing decision. Unlike an in-person auction, an online auction gives you plenty of time to research the items from the comfort of your own home.

Additionally, you can view online auctions, such as our weekly car auction, without having to participate. Watching a live auction is an easy way to browse or learn what to expect without having to spend a dime. Ideally, you want to watch an auction from the same online auction house that you plan to use later, but any online auction will give you a solid idea of how they work in general.

Be Prepared to Act Fast

Another common stereotype about auctions is that they move fast – and that’s true! Probably the single most intimidating aspect of auctions, online or otherwise, is the flurry of quick bids.

Although most auctions last a few hours, the time spent bidding on certain items can fly by as fast as 30 seconds. Use the auction catalogue to learn the order the items will be presented, so you’re ready to bid when the item you want is up for sale.

Set a Budget – and Stick to It

Auctions are fast and fun. Whether you’re new to online auctions or an experienced participant, it’s easy to get caught up in the excitement and spend more than you should.

Set a budget beforehand. You want two limits. First, set a limit on any specific items you’re planning to bid on. If you’re not careful, you can accidentally spend more on an item than it costs in the store!

Aside from setting limits on specific items, also set a spending limit on the entire auction. A large online auction can hold plenty of fun surprises, so you might find yourself bidding on items without any preparation. Set a total spending limit so you don’t end up striking a severe blow to your budget.

Understand that Sales are Final

The ability to return is probably the biggest difference between an online auction and a traditional shopping experience. Items bought through an auction have limited return options. You’re rarely allowed to return an item simply because you don’t like it.

Instead, you’ll only have rescission rights. If any aspect of the product is damaged or significantly different from how the seller described it, you’ll want to request a refund. After that time passes, however, the item is yours no matter what.

Online Auction Lingo

Generally, you’ll find most online auctions welcoming to beginners. After all, these sites wouldn’t be nearly as popular if they were filled with insider terms and a confusing structure. However, there are a few terms you might not be familiar with.

Hammer Price (Sale Price)

The Hammer Price is the final bid price. When the auctioneer bangs his gavel for the final time, closing bidding on an item, he calls out the hammer price.

Buyer’s Premium

The Buyer’s Premium is a cost paid to the auction house by the winning bidder. It’s a percentage of the item’s total selling price. Details vary by the auction house, so be sure to check before bidding. A Buyer’s Premium can be fairly high for a big-ticket item like a vehicle.

Price Realized

This is the final price paid. It’s the final selling price, the buyer’s premium, and the sale price.

Final Thoughts

It’s easy to see why auction sales grow in popularity year after year. They’re a fun, easy way to find deals on all sorts of items. Even better, you don’t have to leave your house to participate! Our complete guide to online auctions in Calgary has everything you need to know to bid, win, and save.