Auction laws, yes there really are laws in auctions (the Uniform Commercial Code or UCC for instance) but that is not what I’m talking about here. These are the laws of men, I am talking about the laws of nature, and the nature of man. These are my laws of auction that I came upon by observing thousands of auctions. These auction laws have held true at every auction I have ever participated in, as a bidder as an observer or as an Auctioneer
Auction Law #1. Nobody cares what you paid for you things.
They don’t care at all. They care about what they want to pay to buy your things from you, not what you paid for them. I have never been at an auction where the Auctioneer is chanting and asking for another bid and someone in the crowd shouted out “What did they pay for it?” I have sold items that had an original price on them of 10 cents for $107,000 and I have sold things that the Seller paid $2,500 for $250. If you think things are always worth what someone paid for them, I have a closet full of WAMU and ENRON stock that I would love to sell to you! I think you might not want that deal, and why? Because you don’t care what I paid for it, you care what you want to pay for it.
That’s right, down deep you are already a believer in my auction law number 1.
Auction Law #2. Nobody cares what you think your things are worth.
They care what they think your things are worth. My daughter painted me a picture back in 3rd grade. I think it is valuable, you might differ with me on that point, because you don’t care what I think it is worth. However, people care a great deal about what a lot of other people think something is worth. That means there is a demand for the item. If a lot of people think your items have value, the do.
In the end people only care what they think (or a lot of other people think)something is worth. Nobody cares what you think it is worth.
Auction Law #3. Nobody cares even a teeny little bit what you THINK you saw on eBay or the Antique Road Show, because you are mostly likely wrong.
I can’t tell you how many people have told me that “I saw one just like mine on eBay for (insert high price here)!”When I ask them what color the price on eBay was they ask me “what difference does that make?” The difference is one color (green) means it sold, and another color (red) means it didn’t sell.Often the person telling me about eBay prices has never sold even one item on eBay and doesn’t have a clue how it works. They don’t know that when someone sets the starting price it costs them, when someone sets a reserve price that is high and the item does not met that reserve they still have to pay the listing fee and the reserve fee. They often don’t understand that the item they saw that was “just like” their item was bigger, smaller, a different color, not a reproduction, etc. There are lots of things on eBay and the Road Show that do look just like the one they have but that one little difference is what made the one on the Road Show or eBay so valuable.Then there is that little word that makes all the difference, condition. Even if your item was exactly the same but your item has a slight defect, a crease, a chip, wear marks, etc. then they are no longer the same. A vintage comic book (let’s say X-men #1) can be worth wildly different amounts. We sold a copy of X-men #1 graded 9.4 out of 10 at one of our comic book auctions for $107,000. In another comic book auction we sold another copy of the exact same book graded 3.5 for $1,121. Obviously they were not “exactly the same”.
Auction Law #4. People don’t care how much money a seller needs, or why they need it, unless you are having a charity auction.
At a charity auction some people do care about what the cause needs. I have sold a pie for $2,500 and a puppy for $4,000 at a charity or benefit auction. I’d love to think it happened because I was such a great Auctioneer. The reality is that it had a lot to do with great and generous people who wanted to help a cause. I just helped them help the cause. Perhaps some day I will sell a dog or a pie at a regular estate auction for more than that, but I’m not holding my breath.People at charity auctions do care what the charity needs. At a regular estate or consignment auction, nobody cares about the needs of the seller.If you are thinking that because you really need money to pay your taxes, settle a debt, or just keep a roof over your head that the bidders are going to pay more, you are just wrong because they won’t.These laws teach us what to expect, they show us the facts, and the facts they show us are these:. Your items, anybody’s items are worth what someone will pay for them in a given location at a certain time on a particular day and not a dollar more. If you want to make your items worth more increase the number of people that know about the auction with better marketing or advertising, or the number of ways people can bid on the items (Internet bidding, phone bidding, etc.) or the ease with which they can bid. At the end of the day what you have is what you got. An Auctioneer can shine a Yugo all he wants and it will not turn it into a Mini Cooper, just a shinny Yugo. So, keep the Laws of Auction in mind if you ever decide to have an auction, remember ignorance of the law is no excuse.
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After Thoughts:
I recently had a man with a Ph.D. in Economics who teaches at a local University attend my auction. When we were chatting he mentioned that he was a Professor of Economics at the University of Missouri . I brought up the topic of my Auction Laws and then he blew my mind. He started quoting them to me. He said he uses them to teach his class. It was a humbling experience, but I guess I must be on to something here!