Anonymous
Anonymous asked in Business & FinanceSmall Business · 1 month ago

How do auction houses price their items? Is the pricing closer to retail or wholesale? ?

3 Answers

Relevance
  • 1 month ago

    Auction houses do not 'price' items. They set pre-sale estimates.  Setting an estimate that's anywhere near full market value, or retail, is a waste of their efforts.  It kills interest.  Bidders want to believe going in that  they might 'steal' an item.  Auction houses want to encourage that mindset, and they do so by starting things out low, get bidders fired up to bid, create bidding wars.  Consigners may set reserves to prevent losing money, and while many auction houses try to discourage the setting of reserves, they will agree to them in select cases.  Auction houses do not get paid when items do not reach the reserve price.

    I participate in many online auctions in the field I specialize in - with as many as twenty different companies competing for consignors.  It is customary for a vast majority of material to be offered without reserve, and with very low opening bids.  Savvy bidders like to get their bids in early to preserve their right to bid on items during extended bidding, when bidding is closed to those who have not bid on the item previously.  Good material is going to reach the price level it should. It is rare when something 'falls through the cracks' and is a true steal.

  • 1 month ago

    Auction houses don't price heir items. If they did, that would defeat the whole purpose of an auction. They VALUE their items based on years of knowledge, experience, and expertise. They don't put a price on them.

  • 1 month ago

    An old tactic is making you think you're bidding for, say, three items and start the bidding low but then when you win they ask you to pick one of the three items and then you have paid more than what the one item is worth, you thought you were getting all three of them so you bid higher than what just one of them is worth. I don't think they get away with that as much now but simply have to estimate how popular something is going to be and start at a higher price when they think not many people will be interested and vice versa. A lot of auctions are just bad debtor's property anyway.

Still have questions? Get your answers by asking now.