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5 Tips For Bidding At Online Auctions

Luxury / Art

5 Tips For Bidding At Online Auctions

It’s easy, incredibly convenient, and just as exciting as placing a bid in person – all without having to raise a paddle, of course. Renyi Lim introduces us to the world of luxury online auctions, and provides expert advice on how to successfully navigate the online bidding landscape.

Written by Renyi Lim on 18 July 2017

If you’re an avid collector who follows the fast-paced movements of the world of luxury auctions, consider placing your bids online (if you haven’t already given it a go). Participating in an online auction on any reputable auction house’s website – be it Bonhams, Phillips, Christie’s, or Sotheby’s – is a far cry from tinkering on eBay.

The lots on offer are undoubtedly high-value ones, and the stakes are just as high: last year, Sotheby’s sold a pair of important fancy blue and fancy orangy pink diamond earrings for US$5.8 million in Geneva, breaking the record for the highest priced lot ever sold online. Earlier this year in April, the sale of the world’s largest known collection of rare and collectable Karuizawa whiskies marked a significant step for online auctions when it was sold by Whisky Auctioneer for £770,000 (US$10 million) – a world record for Japanese whisky.

In the art world, online art sales reached an estimated US$3.75 billion in 2016 – a 15% increase from 2015 – despite a slowing global art market, according to the Hiscox Online Art Trade Report 2017.

When you consider that all you need is a computer (some auction houses have also developed apps that allow you to bid using your mobile device) and a strong Internet connection, the sheer convenience of being able to keep track of live auctions from wherever you’re based in the world is a huge plus-point.

Should you be game to try, WEALTH has spoken with two auctions specialists and come up with five tips to help you successfully assess and secure your first online purchase:

Do your research thoroughly and pay attention to condition reports

The joy of browsing auction lots online – as opposed to perusing a traditional, static paper catalogue – is the breadth of information that e-catalogues offer. Many websites will give you flip-through access, detailed notes on items’ provenance and dimensions, estimates of individual lots, and high-resolution images that allow for digital close-up inspections.

Jonathan Darracot, head of watches for the Bonhams Group, states that it’s crucial to read the condition report for a piece you’re interested in, be it a timepiece or another item: “Condition is very important to gauge value.  Therefore, study the extra images and the written report of any item. It’s always good to have boxes and papers as it helps with authenticity and provenance, but the older a watch is, the less likely that it will have them and therefore the more it will make a difference to the value.”

Get in touch with auction house specialists

Even experienced collectors may have questions about a lot they haven’t physically inspected, or they might be searching for an obscure snippet of information that an e-catalogue hasn’t covered. This is where an auction house’s specialist can help potential buyers make their decision, explains Sandy Ma, Phillips’ head of evening sales in Hong Kong and a specialist in twentieth century and contemporary art.

“The art market has become truly international and we recognise that it’s not always feasible for someone who lives in Singapore to fly to London to see a painting in person,” she says. “We certainly encourage collectors to reach out to our team of international specialists, as we want our clients to be as comfortable as possible when purchasing a work of art, a watch, piece of design or jewellery. Our global team of specialists are always available to answer any questions and provide honest feedback about each of the lots in our auctions.”

Keep track of times and dates

This may sound like an obvious point, but when you’re travelling frequently and switching between different time zones, days and hours can blur into each other. Registering to receive e-mail alerts or downloading an auction house’s app will help avoid missing a sale you’ve been looking forward to. If you’re worried you’ll be on a flight or in a location without Internet access, it’s often possible to submit an absentee bid online beforehand.

Bear in mind, as well, that the majority of auction houses will require you to register online to bid at least a day before your auction of interest begins, so don’t skip that essential step. “While there are backup protocols in place for last minute bids, we strongly advise registering more than 24 hours in advance of any auction you are considering participating in,” says Ma.

Use digital alerts and online schedules to search for items

As part of their efforts to capture the attention of potential clients, particularly those open to taking part in online auctions, many auction houses will send you regular newsletters if you sign up on their website. Calendars featuring auction schedules are also readily available online, and these come in handy if you’re looking to plan your own year around upcoming sales.

Better still, if you’ve recently missed out on a lot you had your eye on, register your interest with the auction house’s department and stay in touch with them. This will enable you to stay connected with department specialists, who may even go out of their way to help you find another, similar lot. “We have a list of people that are interested in buying certain pieces, so we can often match up watches with interested clients and are happy to do so,” Darracott explains.

Resist the temptation to impulse-bid

While you’re riding the surge of adrenaline that comes with the final few minutes of the bidding process, hold back the urge to add a higher digit (or even an extra zero) to your maximum bid, unless you really feel you have to win that auction at all costs. Your paddle may be virtual and you may be utterly absorbed in tracking sales results in real-time, but don’t overextend your bid with a few reckless taps on your keyboard.

“This is definitely a decision that needs to be made by each client individually. As we aren’t aware of everyone’s financial situation, we would never want to advise a bidding strategy that might make someone uncomfortable,” Ma advises. “That said, it’s always in the collector’s best interest to think about these scenarios well before the auction, so they are prepared for whatever might take place in the saleroom. It’s also important to take into account and understand the premium, which can vary from sale to sale, as well as the conditions of sale.”

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