Summertime not only brings us show season, but auction season as well. This article will explain terms and how consignment sales work.
First, the bidding process. First step, listen to the auctioneer. If you go to enough auctions, you'll see all the auctioneers in your area and know their lingo. In general, listen for a few minutes and concentrate. It's not a foreign language.
Next are the terms. Let's use a box of drip oilers as an example.
'ALL ONE MONEY.' You are bidding on the box. One price, high bidder takes all.
'CHOICE.' You are bidding on one oiler. High bidder can take one or the whole box. If the high bidder doesn't take all, the auctioneer will put the remainder back into the ring. This leads to our next term.
'SAME WAY.' The oilers are still buyer's choice.
'TIMES THE MONEY.' You are bidding on one oiler. High bidder must take all, highest bid times the number of oilers.
Now, let's consider the price of oilers new. Bid carefully. If there are 10 oilers in the box and you paid $100 ALL ONE MONEY, you made a good purchase.
Keep track of what you buy. There are lines on the back of your buyer's card. Write down your purchases. This will help you remember what all you bought and keep track of your budget. Remember to destroy all records before you get home. This will avoid that conversation that starts with, 'and how much did you pay! ?...'
Also, be prepared to haul your purchases. Many a time I've seen fellow hobbyists pass up things because they left their trailer at home. Remember to pack chains, binders, and ropes.
Let's say you decide to sell something through consignment. In general, the following is a basic idea of how consigning works. As an example we'll use a tractor valued at $1,200. $1,200 is your reserve. No one can buy it for less than this. You turn the tractor over to the auctioneer and you'll be issued a receipt.
You will probably pay a buy back fee up front. Buy backs are a percentage based on sale price. Example 10%.
Commissions are based on sale price, also example 20%.
Now, let's look at a sale and a no sale.
Highest bid $2,800.
This tractor sold. Commission of $560 is deducted from the sale price. You will receive a check from the auctioneer for the remainder, $2,240.
No sale highest bid $950, reserve $1,200. You forfeit your buy back fee ($120), and keep your tractor. Check your commission rates and keep that in mind.
Well, that's it. Hopefully, this will clear up any auction questions you may have. My disclaimer: Check with auctioneers before selling. Individual rates may differ. This is a basic explanation based on what I've seen.