Bidding in an auction can be a fun and rewarding experience. This is particularly true of floor auctions, held around the world, where bidders compete for items through a variety of bidding options. While these options vary from auction house to auction house, most collectors can bid in auctions by being at the venue, bidding online, bidding by phone, placing a book bid prior to the auction, or having a representative bid for them at the auction. Each of the methods has its pros and cons, and in this article we will take a look at each of the various methods available to bidders.
At the auction
Coin auctions are often held in conjunction with major coin shows, usually during the first few days after bourse activities have ended for the day, starting at a pre-set time and not ending until the last lot is sold. Many major auctions offer some sort of dinner or refreshments, and it is not uncommon for an auction house to stock a bar at the venue. Of course, this is done to entice possible bidders, but there are in fact some other advantages to being at the venue when the auction takes place. First of all, collectors will have the opportunity to view any lots in hand prior to the auction. Even with the high-quality photography that is now easily accessible online, viewing a coin in hand is preferred, making this a major plus. However, other opportunities may be available to view lots prior to the auction, meaning physical attendance is not an absolute necessity.
The main benefit of attending an auction is that it’s the best way of guaranteeing that your bid goes through. All bidding methods discussed below have various forms of risk associated with them. As you are sitting in the room it is also possible to see the other potential bidders, and it always gives a good indication of how the sale is doing, what is selling for what amount, and who is buying which coins. On the other hand, other potential bidders can also size you up, and there’s not much of a chance that other people cannot see what you’re buying. There have also been instances where two possible bidders may not like each other and bid each other up for no other reason than to annoy the other bidder, and if this happens to you, bidding in person might not be the best option.
Technology has made huge improvements over the past decade or so, and many auctions now feature both audio and video, making it almost as if you are sitting in the room. But even with technological advancements it is possible that something will go wrong, and it does happen. Your power can go out, your computer or tablet might crash, or the Internet connection might lag. This happens, and it is something to keep in mind. Also, while it is very convenient to bid on an auction while sitting in your pajamas at your home on the East Coast while the auction is in California, the time difference is something to consider. I remember one auction a few years ago at the ANA show in Los Angeles where the auction did not end until 1 a.m. West Coast time—4 a.m. on the East Coast. Unless you’re a night owl, this is certainly something to keep in mind, but of course this also a potential problem when bidding by phone; and if you’re bidding at an auction in Asia expect to wake up early or stay up late.
Bidding by telephone (where a representative calls you and places bids for you as you tell them to) is generally offered by major auction companies for higher-value lots. Personally, I like this method, as many representatives will tell you how many others are bidding against you, and it is generally easy to set up. While phone lines these days are unlikely to go out at any given time, it does happen at times that a connection can’t be established, so it’s always good to have a backup plan. I have also heard stories of bidders’ losing track of time and being away from the phone as the representative calls (they usually call you about 5–10 minutes before the lot comes up to make sure you’re there, and then again a minute or two before the actual lot comes up for auction), which means that you lose out on your desired item. Another advantage is that you don’t have to watch or be at the auction the entire time, which always makes sense if you’re short on time, as many auctions can run longer or shorter than estimated.
Placing a book bid
Before the Internet, this was for many one of the preferred methods of bidding if they couldn’t be at the actual auction. Sometime before the auction (but usually at least 24 hours before), you mail, fax, or e-mail your predetermined bid to the auction house. The auctioneer has a list of bids and will start the bidding one increment above the second-highest book bid. For example, if three people have placed book bids of $800, $1,200, and $1,500, the auctioneer will start bidding at $1250. If you’re the $1,500 bidder, he or she will bid for you (against people using other methods) until you win the lot or until he reaches $1,500, whatever comes first. This method is generally quite foolproof, and I use it on occasion. The most important advantage for this particular method is that you set your maximum prior to the auction, so that you are not enticed to bid more than what you’re willing to spend. Of course, on the other hand, there’s nothing worse than bidding $1,500 and seeing the lot sell for $1,525, making you wonder whether you would have won the lot if you’d bid $1,550.
Using a representative
Personally, I have never used this method, but people have used me to place bids for them at auction, so I do have some experience with this. The benefits that apply to a floor auction apply here as well, and in many instances it is a good idea to have a knowledgeable person check out any lots you’re potentially interested in before the sale. Also, by having somebody else bid in person, you don’t have to stay up until the middle of the night, and you can generally rest assured that your bids will go through as directed. Of course, one thing to keep in mind is that most dealers will charge a fee for this service, which is usually 5% if you win the lot in question (usually there is no fee if your bid fails to purchase the lot). If you are on the fence about a certain coin it is always good to have somebody to discuss the item in question with, and for this reason I believe 5% is often a very reasonable amount to pay for peace of mind.
As we can see, each method has its pros and cons. Personally, I tend to use the online bidding systems, since they have worked well for me in the past. I have also attended floor auctions, and often the excitement of an auction (plus the free wine, of course) is worth sitting through hundreds of lots I’m not interested in. For expensive items I have used telephone bids, and I do like those, although I have to say that I usually do this in combination with watching the auction online, giving me the best of both worlds. If you have any experience bidding in auctions, which method do you prefer? ❑