Ins and outs of bidding at auctions

[pennymachines]

Auction fever

Recently, in regard to ebay sniping, Treefrog suggested, if you decide beforehand the maximum you want to pay and firmly adhere to it, you can prevent emotions driving you into competitive bidding wars. Davnea commented, "but when you're sitting there with the seconds counting down, it's all too easy to get carried away and put in an over-the-top counter bid in a knee-jerk reaction. I'm sure that we've all done it at least once."

Many of us have regretted overbidding, and will do so again, because it's impossible to eliminate emotion from collecting, when that's what drives it. When competing at auction with fellow collectors for a coveted machine, parts of the equation that have to be measured are:
1. How much do I want it?
2. How much can I afford to pay?
3. What is its market value?

The first is answered by a subjective response. Emotion based, this may wax and wane considerably as you contemplate the item, responding to its charms and observing its defects. What's more, you're probably influenced to some degree by other collectors' responses to it.

The second question is more objective. How much you decide you can afford will be conditioned by 1 & 3, but current assets determine a practical limit.

The last question is generally the trickiest. If the answers to 1 & 2 are high, you might simply ignore 3 and happily bid until you win. Most of us are not in a position to do that, or if we did, wouldn't be in that position for very long! We need the answer to 3 to ensure we're buying sensibly and that, if forced to sell in the short term, we could recoup most of the cost.

Market value for common machines is fairly well established, but the rarer stuff poses the problem. The auction result may help resolve it, but that's too late for a prospective buyer. No collector will honestly tell you what they think it's worth, unless they're uninterested in buying, in which case, they're probably not the best guide. For these reasons, as a sudden reveal of interest, the bidding affects the bidding, and the adrenalin kicks in. Briefly, we get a peek at where the market stands, but it's a dangerous moment to reassess how honest you've been in your answers to 1 & 2. I'm sure I'm not the only one to do so, and wake the following morning with a touch of Winner's Curse.

Bidding technique

The two extremes are:
1. Holding the paddle over your head until you win or your top bid is reached.
2. Signalling your bid with a subtle twitch that only the auctioneer can see.

1 is favourite with auctioneers, because it makes their job easier, especially if they want to bounce some bids off the wall! Maybe the technique is used by some established collectors to dishearten other bidders: "look, if I'm bidding, you guys might as well pack it in." However, prominent collectors may be wise to veer towards technique 2. Somebody once complained to me, having won a machine that proved very difficult to restore, "I thought it was a good one, because I saw you were bidding on it"!

[malcymal]

I think anybody buying machines these days with the illusion of making money out of it is rather fooling themselves. I'd like to think anything I have bought has been out of curiosity, to beat something that was broken or going to the scrap heap, put my own mark on it. Although I have done machines up before and turned in a £100 so called profit, reaching the market value, if a bit more, the labour, paint, graft, hours of work means I have not made anything really, the greatest profit being I have had fun and managed to switch off my brain for a couple of weeks having a hobby. Ebay restrictions, tax implications etc., it's all a hassle buying something to make profit. If something moves me, I will pay whatever for it. I do not care less if a machine is worth a grand, it's whether the machine moves me, whether I remember playing them, the memories of the past that went with the experience. I bought that Roma bandit for something like £140, maybe less, not to everybody's taste, but 'cause I liked it so much, I would have paid a lot more. If anybody offered me 800 for it, I wouldn't part wit, 'cause I think it's cool and I like it.

I like this written piece about auctions Pennymachines; it is very true. I remember the biggest gaff was buying a Sega Continental from London, a 150 mile round trip for me, paid over the odds 'cause I got caught up in the moment of the bidding war and when I got there, what a pile of crap! About 200 quid later on top, re-chroming etc. and weeks and hours of cuts to hands and swearing moments wondering why I did it, I got to the end result and thought, "hey, I did that, that's my work and look how good it looks". I didn't get my money back on it, recouped most of it. Market value means sweet Fanny Adams - if it moves you then value is so subjective to individual interpretation. I guess that explains why we are so amazed when Sega Windsors sell once in a while for £400, but I guess for some they don't honestly care.

[jimmy55]

A comprehensive summary PM.

The only thing I can think that you left out is the effect of Red Wine on the decision making processes. Critical in my opinion and to blame for a 17' fiberglass car taking up a significant part of my workshop.

[badpenny]

I employ the stick your hand in the air and leave it there until you exceed your limit as there are some auctioneers who don't follow the unwritten rule of returning to the previous bidder to see if they wish to raise their bid before opening it back out to the room.

When it comes to the amount to bid up to. I always agree in advance what it's worth to me personally and then will go one bid above that figure. Then if my figure is with the other bidder I don't feel cheated.

BP

[jimmycowman]

This is like a Cadbury's cream egg
Most of the time, I wait till the last bid, then bid - that way you know you haven't been run up (hopefully).

[coppinpr]

A good thread this, with some interesting ideas and insights into different people's personalities.
I'd never go for the hand in the air method. I've seen too many auctioneers add in non existent bids from the other side of the room then flick back to the hand quickly, to keep the price rising. It can be a sure way of bidding against yourself. With most auctions being live online now, it's very easy for the auction house to push up bids this way.

I'm a bit of an impulse bidder, which is a bad thing of course. At the last Coventry auction I bought three machines, two of which I hadn't looked at much at all
Two of the three I bid over my pre-set limit, the other I did not have a limit on, because I hadn't seen it hiding under a table. Two of the machines I was very pleased with the price when I got them home (including the one hiding under the table); the other... I don't know why I bought it at all, at any price

Bidding on online sites like Ebay is a totally different thing and I'm a great believer in Esnipe. It's all too easy to go way above your limit, often with false bids pushing you up. Esnipe stops all that:
1.Sellers dare not put in false bids too near the end for fear of coming unstuck.
2. Start by putting in a bid slightly above your limit and you won't feel cheated if you lose.
3. You don't have to be there when the item ends.

I actually find I don't feel as disappointed if I lose an item using Esnipe as I do if I'm bidding live. If live, I always feel I should have gone one more bid - I don't using Esnipe.

[arrgee]

I am sure we have all heard of the 'don't scratch your nose while the bid is going' well this actually happened to me !!! I was waiting for the following lot to come up at Coventry and casually scratched my nose to which the auctioneer acknowledged a bid - what !!! fortunately the bidding went on, to my relief. I subsequently realised that the bid card I was holding was in the same hand as I used to abrade my olfactory organ. - what a plonker!

But getting back to the actual emotion of bidding, again at Coventry there was a machine that I wanted very much, and so did someone else and after a while we were the only two left bidding against each other. I got caught up in the emotion of wanting the machine that it over-took my objective value of what I thought it was worth, I suddenly stopped bidding and later thought that I could have paid way over the top for the machine. I have to say that I have in the past paid over the top for a machine but I knew it and that was irrelevant - like malcymal reasoning, I liked it so much and I wanted it. And that is all part of the collecting syndrome, you wait ages for a particular item to appear and when it does then you are faced with being objective at setting a price limit or letting your subjectivity take over, usually at a cost.

[pennymachines]

I employ the stick your hand in the air and leave it there until you exceed your limit as there are some auctioneers who don't follow the unwritten rule of returning to the previous bidder to see if they wish to raise their bid before opening it back out to the room.

If the auctioneer seems to have overlooked you, you just have to blow your cover and shout out your bid.