A Simple Guide to Online Auctions
How they work, terminology and more
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 new to the world of online auctions, they can feel overwhelming and confusing. How do you find reputable auction sites with quality products? What bidding strategies should you use to win the items you want? Don’t worry if you’re not quite sure how online auctions work, because our simple guide to Online Auctions in Calgary covers 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:
- 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, soon after the auction closes, the buyer and seller will communicate via email to arrange payment and delivery.
Many items have a reserve price, which is the minimum price they’ll accept. If the bidder doesn’t meet this reserve price, the auction will close without a winner.
Internet Auctions are typically divided into two categories:
- Business to Person
- Person to Person
In a business-to-person auction, the site has physical control over the merchandise offered for sale. Many businesses, such as overstock, liquidation, or wholesale businesses sell merchandise exclusively through auctions. In other cases, a business might be involved in liquidation, 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 about 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 in as fast as 30 seconds. Use the auction catalog 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 the world of online auctions, or you’re 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
Probably the biggest difference between an online auction and a traditional shopping experience is the ability to return. 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 is significantly different than how the seller described it, then 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, the price he calls out is the hammer price.
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, such as a vehicle.
This is the final price paid. It’s the final selling price plus the buyer’s premium plus the sale price.
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.