Auctions are just one of the many traditionally in-person activities that have moved to the virtual space in the last year. But even if you’re a beginner, you should at least know the basics of how an auction works. Well, that’s if you’ve been watching movies where biddings are part of climactic scenes, although they’re more dramatic.
As online activities increase continuously, online marketplaces grow busier by the day. There are countless advantages to buying and selling online, after all. The unbeatable convenience is perhaps more than enough to convince both business owners and consumers. For sellers, the internet opens a realm with virtually infinite possibilities—more tools, more options, and more importantly, more potential customers.
If you’ve been wanting to try your hand at buying and selling, online auctions can be a viable option for you. Selling at online auctions offers higher profits, and you don’t need a lot of items to get started. All you need is to learn the process first, along with some techniques that may help you sell your items faster. If it’s your first time to sell at online auctions, here are the best tips we’d recommend:
1.Learn The Trade
Before you start the actual selling, it pays to know the ins and outs of online auctions. By doing so, you won’t feel confused or out of place when different parties start to talk using auction jargons or technical terms. Here are some of the must-know common terminologies used in auctions:
- Auctioneer: The individual who directs and facilitates auctions by accepting bids from potential buyers and declares the completion once the highest bid is made. Usually, you’ll pay the auctioneer a pre-determined commission. It can be either a percentage of the total sales or a fixed fee.
- Bid increment: The difference between the latest bid and the next acceptable bid. For example, an interested buyer shows up at a point when the last highest bid is USD$100. If you set the bid increment to USD$10, the buyer can only bid from USD$110 upwards and nothing less.
- Hammer price: The winning bid. Once the auctioneer stops receiving higher offers, he closes the auction by dropping the hammer, hence the name.
- Lot: Refers to the batch of items offered for sale at an auction. It can be one item or several items sold as a single unit.
- Valuation: The auctioneer’s assessment of the current value of the item offered for sale.
This list of definitions is in no way exhaustive. There are a lot more terms you need to understand, including, but not limited to, an absentee bid, appraisal, as is, buyer’s premium, cataloguing, consignor, gavel, paddle, reserve price, provenance, and fair warning. To get an excellent grasp of these terms and their usage, visit sites that specialize in auctions like williamgeorge.com to learn more.
2.Find A Platform
The number of online auction sites has grown in just the last year. However, be careful when choosing the seller hub you’ll be registering with. Look for reliable auction sites with years of experience in the industry, like William George auctioneers. Check if there are seller commission fees or any other charges. You’ll also want to look at the number of visitors they get during auctions. The more visitors they have, the higher the number of your potential bidders will be.
Also, ensure that the site you choose deals with the range of items you intend to sell. Some sites specialize in luxury items, others in real estate, electronics, pet supplies, business equipment, or automotive, etc. You wouldn’t want to offer your entertainment memorabilia to an audience interested in baby essentials.
3.Prepare Your Products
Auctions are known for rare and unusual items, which are the common qualities of highly-priced, valuable auction products. However, as long as your product is not illegal, you can always be creative to make your products more sellable.
Presentation matters a lot when selling at auctions. Use high-quality product photos and don’t skimp on them. Take a close up of the important details of your product, and include the parts that have damages or anything that you want the buyer to be aware of.
Use a catchy product title, optimize your product description and be as detailed as you can. Proofread before you post.
4.Structure Your Pricing
Decide on a price based on the estimated fair market value of your product. If you’re dealing with items with a standard retail price that’s well known, this price should serve as your fair market value. For instance, if you’re auctioning wireless earbuds, it’s pretty easy to find the current average retail prices by looking up the item on different online sites.
But if your product has no standard retail price, say a T-shirt signed by a famous music icon, you may want to consult the auctioneer or other auction experts to help you come up with a reasonable value.
Once you have your item’s fair market value, a helpful rule of thumb is to set the minimum bid price to about 30% of this price. Going below the 30% mark may considerably reduce the returns on your auction. However, it doesn’t hurt to set the minimum bid price at about 50% if you have unique and popular items. Don’t overprice your opening bid, though, or you’ll discourage potential buyers.
5.Write Your Terms Of Sale
Clear and detailed terms of sale will help make your transactions hassle-free. It should cover details like:
- Payment terms: Are you accepting only one-off payments, or the buyer can pay a deposit followed by several monthly instalments?
- Warranty: Do you assure the buyer that the product you sell them will perform optimally for a given duration, failure to which you’ll be willing to replace the defective product with a better one?
- Returns and refunds: Can the buyer return the product if they realize it doesn’t measure up to the advertised standards?
- Order cancellation: Is the buyer allowed to cancel an order after being selected as the highest bidder?
With such details, both you and the buyer can set each other’s expectations and understand your obligations towards the other. And should any party breach the terms, you’ll have a reference document to consult.
6.Consider Shipping Costs
Shipping fees can be surprisingly costly, so it’ll pay to know the costs ahead. If it’s too expensive, they’re likely to put off buyers. An excellent approach to trimming shipping costs is to offer free shipping but include the costs in the product’s price. Any buyer will surely get excited at the mention of free delivery.
In addition to that, it’s in your best interest to ship on time. More importantly, do everything that’s within your means to ensure the item arrives intact. That’s what makes customers happy. And they’ll always come back to you for more purchases or even refer other buyers to you.
7.Plan Your After-Sales Provision
Once you’ve sold your items successfully, your responsibility towards the buyer isn’t over yet. In case the buyer needs technical assistance, you should be ready to provide it. Give the buyer your contact details so they can reach you when they need to. Most probably, you’ll communicate on the phone or through video chat. If the buyer comes from the same geographical location as you, you can even arrange physical meet-ups to solve any issues about their purchase.
Going, Going, Gone!
Selling at online auctions is somewhat similar to in-person auctions. The only difference is that it takes place over the internet with bidders spread across the globe, while the latter takes place in physical premises with all potential buyers in-house. The seven handy tips highlighted above will help you get started with auctioning goods online. As long as you understand the process and stick to the rules of the game, you should be able to find a buyer for your items in a reasonable time.