In the beginning I did all of my buying at the auction, or at least 95% of it, I thought I was doing the right thing, yes and no.
It is not that auctions are not a good place to get stuff for your business, it is but it can come with big costs. If you do it right it can be a great way to get stuff, if done wrong it can cost a lot or in a worse scenario end your business before it really starts.
It is imperative to get you’re buying in order, remember the motto, “buy low and sell high” it just doesn’t work if you are paying too much.
The first thing to consider when buying at auctions is that most of them today have some sort of buyers premium anywhere from 5-20% of your purchase before tax. What does this mean; it means that you will add onto your bid 5-20%, every winning bid. Then add your tax onto that and your $100.00 bid is now going to cost you approximately $125.00 with a 10% premium.
All items at auctions are fair game for anyone to bid on, so more than one person can bid on an object making the bids go up very fast. It is easy to get caught up in auction fever and bid to much, never mind adding on the premiums.
It is not hard to get caught up in the frenzy of bidding, especially when you want that item. You can win every bid if you are the top bidder but how much will you pay for what you want; can you resell this item for a profit? Don’t let the other bidders or the auctioneer make you bid too much, set a price for yourself and stick to it, every item.
Better you get at auction bidding, less product you will come home with. You may come home with fewer products but you will come home with product that you can sell for a profit. There is no room for profit if you pay too much by simply adding cost to your item doesn’t mean you will sell it for that price, more than not, you will not sell that item for that price.
I follow a simple rule, not just at auctions but when I purchase anything to resell. I tell myself what I want to sell it for giving me an idea of what I want to pay for it.
Sell it before you buy it.
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