Auction Basics: 10 Things You Need to Know

Everything in life has it's counterpart or opposite. There is black and white, man and woman, boy or girl, heaven and hell, left and right, good and bad..... With every word, there is always a counterpart to balance it.

With auctions there are buyers and sellers. There should be a balance between buyers and sellers so both can enjoy the auction and profit and benefit from it.

To enjoy, profit and benefit from auctions, here are some basic tips and information about auctions:

1. Auctions allow buyers and sellers to trade goods at a price defined by competitive bidding. The highest bidder gets the item.

The price of the item is determined by the amounts being bids, so the price of each item is variable and depends on who is taking part in the auction and bidding.

2. In an auction, items start at a minimum bid there may also be a “reserve price” set by the seller below which he does not want to trade. If the “reserve price” is not reached the seller does not have to sell, but the seller will still have to pay the auction 'listing fees'.

3. As a seller you MUST put items up for sale that will be attractive to buyers. Without interest from buyers there will be no bids. Without bids there will be no sale. Without a sale you have lost money as you will still have to pay the listing fees to the auction house.

4. There are three types of auction:

- sale auction refers to that kind of auction where a unique item that is unusual, extraordinary, or anything to do with art is being sold
- commodity auctions, also known as exchange auctions, where “professional auction traders” trade commodities often on a trading floor.
- dealer auctions are those where collectibles are being traded.

5. In auctions, it really pays to use common sense. There is no need to elaborate on that.

6. For sellers, you should know what you are selling; and describe it well, otherwise buyers will not know what you are selling.

7. For buyers, know what you are buying for. Ignorance is never an excuse. If you want a car, but get a lemon, in an auction that described a lemon it will be your own fault. If the item is described as faulty don't expect it to work!

8. If you want to find the rarest, most unusual, or simply the cheapest item, try the auctions. You will never know what you are missing until you have attended an auction session.

9. Set your top bid before the auction starts. Do not exceed it. You do not have to go with the flow once the bidding has started.

If you think that the price of an item is too good to be true, it probably is.

10. Do your homework

Never attend an auction without knowing the basic rules and regulations of the auction house. Find out what kind of auction you will be attending, then, do some research on it. Each type of auction has its own rules. Knowing the rules of the game will give you a better chance of winning!

Get to know the basic facts about auction trading so you have an idea of what to expect. Like any game, there are the winners (who get the goods), and losers (who either over-pay or do not get the item they want).

Two things to remember: Your luck may be better next time. There is always a next time. If you are selling and the bids don't happen - learn from any mistakes and try again. If you are a buyer and the bids go over your maximum price, you havent lost - you have just avoided over paying! Try again next time. Good Luck, and may the force be with you!

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