An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the winning bidder. In economic theory, an auction may refer to any mechanism or set of trading rules for exchange.
- Auctions are the only type of sale where the price is negotiated higher than lower
– Auctions create a competitive bidding environment which helps increase prices for sellers
– Auction can be held on a short period of time minimizing holding costs
– Auctions allow sellers to create their own terms of sale
– Auctions create a market for hard to value items
– Auctions allow buyers to bid with confidence knowing other also have an interest in the merchandise
- Selling by Auction stimulates competition It puts bidders in a positive frame of mind
– It brings buyers to a state of decision
– The price is decided by more than one IT OFTEN LEADS TO A HIGHER PRICE THAN YOUR ASKING PRICE!
- To sell various goods to the highest bidder in financial terms.
– To represent and protect the best interests of the seller and the buyer.
– To introduce each item individually to the buyers, and point out the characteristics of each item.
To be loyal to all parties
– To disclose all information relevant to the auction sale
– To ensure confidentiality in business dealings with clients
– To be accountable and safeguard the seller and the buyer
– To be diligent in all processes and practices
– To act in accordance with legal requirements
– To constantly acquire knowledge and information relating the industry, buyers and sellers
– To always act fairly and not profit on someone else’s loss and charge in line with the required deliverables.
Auctions are treated as ‘trade sales’, and as such do not have to stick to most of the normal consumer protection laws. There will usually be a clause printed in their Conditions of Sale (displayed at the auction or printed in the catalogue) stating “we are not responsible for the authenticity or condition of any item”. However, goods must not be deliberately described or misrepresented falsely. If the buyer finds that he/she was misled into buying something, it will have to be proven to court that the buyer examined the item closely before buying it. The buyer will have to proof any obvious false description or misrepresentation.
The South African Institute of Auctioneers (SAIA) is the body appointed by auctioneers to represent them in South Africa. Members of this body must adhere to the bodies’ standards to promote professionalism within the industry.