In the last several months I’ve been participating in an increasing number of live and live online auctions (As a side note, a live auction is conducted at a specific time in a physical location, whereas an online live auction occurs within a certain time frame, but conducted completely online). I’m not talking about eBay, but rather auctions hosted by an auction house or similar company. I find it to be an entertaining way of buying items I can later resell for a profit.
When participating in live auctions, you have to be careful not to get caught up in the excitement of the event. It seems like it’s all fun and games, but when the hammer comes down and you win the piece, you have to pay up. That’s why it’s important to be aware of all the additional costs that may be tacked onto the price of your item.
Most auctions include something called a buyer’s premium. This fee covers the administrative expenses of the auction house and can range anywhere between 10 and 25% per piece. In addition to the buyer’s premium the auction house may charge an additional fee for running a credit card. If that’s the case, it might be a good idea to bring cash to the auction. You’ll have to weigh the size of the fee against the hassle of dealing with cash. Some auction houses charge yet another fee if you fail to pick up your items on time (I just found this one out the hard way)! If you’re looking at a large item that’s being sold out of state, shipping and transport fees can quickly rack up your final cost as well.
As you can see, there are many ways your final cost can end up higher than expected, so it’s important to do your research in advance. Take the time to look up the policies online or give the auction house a call ahead of time. You don’t want to get backed into a corner with a purchase that’s much larger than you intended. As I’ve said before, if they allow a personal viewing, be sure and take them up on it. You can understand the product a lot better if you’re touching it, holding it and staring at it. And as always, don’t be too shy to ask questions before you place a bid.
Good luck and happy hunting!
As a friendly reminder, the new, hardbound edition of my book, The Garage Sale Millionaire, is now available! If you purchase through my website, I’ll sign the book for free (use the coupon code MAGNIFY)!