All successful businesses are based on the simple principle - buy something cheap - then sell it at a mark up. Simple, in theory - but rarely simple in practice. One of the major entrepreneurs 'headaches' can be where to get goods to sell at a cheap enough price to allow a large enough profit.
Fortunately, there is a way that problem can be solved - easily. Quite simply, auctions offer you the chance to buy all sorts of goods at under market value. It's then a simple matter to resell them, perhaps immediately, at in excess of market value. A clear, quick profit!
Auction buying is not just an aid to those already in business. There are many cases of people who do nothing but buy 'anything' at auction and resell for a profit. Just consider, it only needs a few items bought/sold a week with a few hundred dollars mark up on each to build a considerable income. You can be an auction entrepreneur in just part time hours.
Of course, auctions are still shrouded in some mystery. That's what helps to keep the undetermined away from the profits. But, they are generally simpler to follow than they were. With a few visits you can be quite experienced at 'snapping up' bargains at auction and reselling for an immediate gain.
Really, it matters not what you buy. Just consider an auction as a place where you can get things for a lot less than they are worth. That's nothing short of an instant money making opportunity!
The great thing about auction trading is that you can actually prove the potential to yourself before actually spending anything. Just go along to a few local auctions.
Auctions are mainly a quick way of selling goods for vendors. And, they are also a way of selling things where any other techniques e.g. press advertising would be difficult. Because of this the prices are invariably far less than market price. Auctions are rarely an attempt to get more for an item than it is really worth, despite appearances to the contrary. But, of course, you would always guard against being over charged.
Discounts at auction vary according to the type of goods sold, type of auction, type and number of crowd - even things like the weather. In some cases auction discounts have been quantified at as much as 80%! Rarely would the saving fall below 10% - but a reasonable ready accessible saving would be 20-30%.
Quite simply, the auction potential means you might buy an item (say a car) at $2,000 one day. Then, the next day sell it for at least $2,400 to $2,600. That's a considerable, instant profit for hardly any word - a way of making very quick extra cash.
How to find an Auction
Auctions are held the length and breadth of the country almost every day of the week. So, there will always be a chance to make money. It's not always obvious which are the best to attend though, and this will need some market research on your part.
There are directories available listing auctions and auctioneers. But, the cheapest way of finding them is to look in the Yellow Pages at your local library. Check the index to see what different categories 'auctions' might fall into.
It is wise to visit auctions before you even consider buying. Because, although they offer the same service they do work on different principles. Check, by observation, that the auction is fair. Auctions are, of course, working to get highest prices for sellers - but they should not be biased.
Good auctions should display goods prior to the sale for inspection. And, they should issue a catalogue or list of what is on offer. The buyer accommodation should offer a clear view of the auctioneer during bidding. More importantly, the rules of the particular event should be displayed on site - and followed by staff at all times.
Do ensure the auction you attend is fair to all buyers, and not favoring the 'regulars'. Also that the price is not artificially inflated by the auctioneer - it should be the demand that sets the price. Most auctions are honourable organisations, but there could be exceptions!
Do stay behind after an auction has finished. This gives a chance to see if those who have bought are pleased with their purchases - or if any 'little disputes' arise. A good guide to finding the best, most honest and most profitable auctions.
Successful Buying at Auctions
When you have gained a little experience at auction you can venture to make your first deal. And, there's no reason why it should not be very profitable.
Do remember that most auctions demand cash on sale. So, take an appropriate amount with you. If this is risky ask for a bankers draft at your bank. This is really a check that cannot be stopped and most auctions will take them.
At auction, goods are sold in lots. So, you will need to decide which interests you. It is a good idea to select 'substitutes' in case your choices are bought by someone else.
To start bidding, the auctioneer will normally set a price. This could be far too high - or far too low. So, wait until a few bids have followed. You can then decide whether the price will allow you sufficient sale margin and start your own bidding. Each bid may rise in $1, $10, $100 or larger units. So you have to keep a check on the total carefully.
There is a good deal of showmanship involved in auctioneering and you'll certainly need all your wits about you. Perhaps the main aim is to ensure you only buy at good low prices. Fall out of bidding if the price is getting too high.
Although experienced bidders may make strange signals to the auctioneer there is nothing wrong with making your bid quite clear. You can pick up the 'tricks' that others use in the future.
When the bidding slows and the appropriate sum is reached the auctioneer will proclaim the classic 'going, going, gone'! When the hammer falls the item is sold at the final price.
Most auctions will demand a cash deposit at the fall of the hammer. The only exception being if they require all bidders to register and lodge a deposit before the auction. The balance must be paid and your purchase removed within a certain time limit.
Note that auctions operate on a 'sold as seen' basis and rarely give refunds. Only a few give a guarantee against faulty goods. So, bid enthusiastically, but with care taking professional guidance as appropriate.
For best results you should arrange to process and resell your purchase immediately. Don't sell at auction though - the profits won't be enough. Best profits are perhaps to be found through newspaper advertisements.
Then - when you've cashed your purchase in and made your profit why not reinvest the proceeds in an even bigger auction deal?
Following you will find a list of the proven opportunities auctions offer:
- Cars. One of the biggest auction money makers - huge discounts. But, do buy carefully as you have little protection against faulty cars, although most auctions have warranties against stolen cars. Follow all vehicle regulations - a car dealing licence may be needed in some areas.
- Household effects. Ideal place to start in auctions, buying up household items. Often valuable items can be bought for pennies on the dollar in 'product lots'. Sometimes changes to pick up antiques.
- Stock. Bankrupt trade stock, discounted lines, etc. are frequently sold off by auction. There are good opportunities here to buy up lines and then offer to traders or sell via market stalls etc.
- Tools/Plant. Items from the trade are frequently sold off by auction. This may include new and used items which can be bought up and then sold back to the trade. Do check items offered as, with many other auctionites, it may be up to the bidder to check whether they are working or not.
- Farm Stock. Another popular auction line. But it is probably not suitable unless you have some experience in this area.
- Property. A real potential winner with huge discounts available on property of all types. Do take legal advice, and advice from a surveyor/valuer though.
- Art and Antiques. Offers profits to beat them all. Needs a little study of the business - but there are smaller markets you can try and succeed in. Not all auctions sell 'old masters' for millionaires only
Always remember of course that auctions do not always fall neatly into categories. Some may be a combination of several types - or completely new auction lines. Just keep your eye out for any auction - because it's almost always a chance to enjoy huge price cuts!
Auctions are a unique opportunity in a way. Because, unlike other ventures you can't guarantee a certain trade week in and week out. Remember though, this means your income is limited by virtually nothing!
It does not matter how little you know about auctions - or what you buy. Simply consider them as a way of getting attractive merchandise at very low prices indeed. A source only open to the most enterprising of people.
'Buy cheap, sell dear' is a principle that means nothing less than complete success. Exploit that principle and let auctions make money for you.