Other Dimensions: Going Once...
January 28, 2009
Editor’s note: This is the first part of a two-part series.
Whenever there’s an economic downturn two things happen: more measuring instruments get repaired when they should be replaced, and more people start going to auction sales looking for bargains.
Many years ago my father used to go to auctions to pick up some odds and sods, but more often than not, he went to get rid of junk cluttering up the warehouse. He got to know the auctioneers and how the system worked. Despite this he was always amazed at how much people spent to buy junk while thinking they were getting the bargain of the century.
Not much has changed. Every time we get an auction notice we check to see what inspection equipment is being offered. Why? Because we know we’ll get calls before the sale to provide pricing and afterward to repair or calibrate the “bargains” someone bought.
Too many people want to get out there and wrangle a deal. But all too often they don’t know enough about the equipment they are bidding on or how the game is played and end up spending more than they should or buying something that’s not worth having at any price.
Equipment auctions are a specialized business run by professionals who may not know a plug gage from a micrometer, but they do know how to set the sale up and how to work their audience, 90% of which will probably be amateurs. I offer the following notes to level the playing field, and in the next column, what to watch out for when bidding on instruments and related equipment.
A basic rule of auctions is: what you bid on is what you’ll get-no more, no less, no warranty of any kind or free support after you bought it.
In the old days, if you were the successful bidder for an item at, say $100, that is all you paid. Now they have what is called a “buyer’s premium,” which is not a premium for the buyer at all. It’s the sales commission that will be added to what you bid-usually 10%.
If you’re bidding on equipment at a manufacturing location, you may feel secure in the knowledge that the company involved always bought good stuff. But, many times, the sale may be loaded, meaning there are items there that did not belong to that company.
When the auctioneer advises there is a “reserve bid” on an item, it means the owner of it will not accept a bid less than the reserve bid. So don’t think you’re going to beat it. The best you can do is match or better it. And the owner of it or a “friend” may be in the bidding war to get you to bid over that price.
Know what currency the sale will be conducted in. This may seem obvious but often it is not. For example, many auctions in Southern Ontario are conducted in American dollars rather than Canadian dollars. The unaware Canadian buyer discovers the price he bid is now higher by whatever the exchange rate is on the dollar and that could be up to 30%. In a similar vein, Americans bidding in the same auction may think the exchange rate at 30% is in their favor only to discover otherwise when they settle up.
Inspect the equipment before the sale so you know what comes with each major piece of equipment or what is included in a “lot.”
A lot is usually a collection of similar small items too low in value to warrant being sold individually. If you buy one, you own all the junk that may be included with whatever good stuff-if any-that is part of it.
Know the maximum price you are prepared to pay before the bidding starts on a given item. Failure to do this means you’ll usually pay more than you should once the auctioneer gets the bidders working against each other while inching the price higher.
Auctions are fun to watch and participate in but only if you know what you are doing, are disciplined in your approach and know exactly what you’ll be getting, if successful.