There is a rule of thumb in the Antiques & Collectibles business that the more people who are interested in an item, the valuable it becomes. And this couldn’t be more true than in the Auction business.
It takes a minimum of three people for an Auction to succeed: The Auctioneer, and at least two Bidders. Let’s take as an example a rare coin. The Auctioneer starts the bidding at $1000. Bidder A is willing to pay a maximum of $10,000 for that coin, while Bidder B is only will to pay a maximum of $2000. And in this example, theoretically no one else is interested in paying any more than these two Bidders. Bidder A is willing to pay $10,000 and Bidder B is willing to pay only $2000. What does Bidder A have to pay for that coin? $2000 plus one more bid. So even though Bidder A is willing to pay $10,000, he will pay only approximately $2100 for it because there was no one else interested enough to push him any higher.
Let’s take a slightly different scenario. The same coin, the same Auctioneer, the same day, but much more bidder-interest in that coin. Bidder A is still willing to still pay $10,000, but now there are other interested Bidders, and Bidder C is willing to pay $9000 for that coin. Bidder A is willing to pay $10,000, Bidder C is willing to pay $9000, what does Bidder A have to pay in this scenario? $9000 plus one bid, or approximately $9100.
This example illustrates the power of Competitive Bidding at Auction. Auctions work best with highly desirable merchandise that appeals to as many potential bidders as possible. More interested bidders will generally lead to higher prices at Auction. This contrasts to common items, outdated items, or items having condition issues, that command very littler bidder interest, and which rarely generate strong prices.
WHAT’S IT WORTH: Some years ago my wife and I were attending an Auction and fell in love with a reproduction country corner cabinet. It was adorable, would fit perfectly into a spot we had, and we both wanted it. “It’s a reproduction, we should get it for $150-$200” I advised my wife. At $400 we were facing another bidder who wanted it as much as we did. We eventually paid $600 for something worth perhaps $150. On that day we paid way too much for an item, but the Consignor should have been ecstatic at the high price they received. Without that other bidder, we would have purchased it at $150, and the consignor would not have been so happy.
Mike Ivankovich is an Auctioneer, Appraiser, Home Downsizing Expert, and host of the "What's It Worth? Ask Mike the Appraiser" Radio Show. Now in its 5th year, “What’s It Worth” airs live in the Philadelphia PA area on Friday mornings from 9:30-10:30 AM EST on WBCB 1490 AM, and on the Internet at: www.WBCB1490.com. You can also visit his Radio Show Web Site: www.AskMikeTheAppraiser.com If your local station doesn’t carry “What’s It Worth” tell them they need to add it to their programing mix. If you know anyone who needs any Personal Property Appraisal work, or if you need a Speaker for an upcoming meeting or event, call Mike at (215)-264-4304, or visit: