In recent years, the world of auctions has been migrating to the online environment. It’s easier and simpler that way for both the companies offering their products and the people who want to bid on them. With online auctions there are no usual costs when it comes to organizing them, the bidders can stay anonymous and find the products they need from the comfort of their homes. Those who can later sell their winnings at higher prices can make a living out of it.
The rules of winning a bidding war (and not losing all your money) are similar to those applying to real life auctions, but in some cases the technology itself offers a few advantages. Here are a few tips on turning auctioning into a lucrative profession.
Set a limit
Setting a limit may seem obvious, but it’s also among the most common mistakes people make once the auction starts. Analyze your budget and set a limit. Don’t do this in accordance with the product’s value – you can go below or above that – but with how valuable it is to you. Once you’ve set the limit – stick to it. No matter how exciting the bidding gets, never go over your limit.
Do the research
Preparation is everything. Do your homework before the auctions starts and find out everything you can about the product you want, including any potential description mistakes. This means going into deeper research than just the item’s current value. Try to find out how much you can get if you sell it afterwards and factor that into the amount you’re willing to spend.
Depending on the type of auction, you can also try to find out more about other bidders. First of all, find out how far they are willing to go, so you can stop wasting your time. If you can, try to find out is there some sort of bargain that can be arranged – perhaps you have something they want more than a product you’re bidding for.
Proxy bidding system
The majority of profitable online auctions have this sort of system in place and you can use them, especially if you’re bidding on a few products at once. It’s basically an automatization of the whole process. Your job is to choose the limit of your offer and the rest is done for you. The program will raise the bid every time it’s necessary (for the lowest possible amount) and it will drop out once the auction goes above your budget. Just make sure that these systems are secure enough, and that your budget remains a secret.
Bid nibbling is a hack used to separate the serious buyers from the amateur ones. The initial price will probably be much lower than the actual worth of a product. This means that for a while a lot of people will place smaller bids just in case. You should immediately offer a larger sum (but still lower than the market value). Less serious buyers, who were there just for the fun of it, will go away after your offer. That way you can start the actual auction with the people who are genuinely interested in the product.
“Buy now” option, available on certain sites, basically has the same goal as bid nibbling. It allows you to skip the bidding process and purchase the item straight away, for a price lower than the market value (although not much lower). If you want to earn time or if the item you’re buying is especially important to you – go for it. Just remember you can save money by having patience and waiting the auction out, and then selling it at a higher price.
There’s a lot of skill involved in starting up and running a successful online auctioning career, and if you follow these rules – you’re on the right track. Bear in mind, however, that there’s also a bit of luck to it. There are no hard and fast rules, you just might stumble upon something of great value for a fraction of its real cost. If your business starts developing, you could include more people in it and even build a larger-scale auction house. You never know.
Author Bio: Lillian Connors believes that the question of business goes far beyond the maximization of profit through different money-grabbing ploys. Instead, she likes to think that ethical principles should be at the core of every commercial venture, paving the way for much more balanced distribution of wealth on a global scale. You can check her out on LinkedIn.