Ask the Wine Auctioneer
By Tom DiNardo
What Bidders Should Know About Wine Auctions.
Here’s an idea that will lift your spirits for the new year. Have
you ever considered wine auctions as a tool for acquiring rare
vintages or special buys? Wine auctions are quickly emerging as one
of the hottest trends for the wine enthusiast, investor or avid
collector in purchasing wine. Non profit organizations are even
getting into the act catering to the demands of their donor wine
connoisseurs by hosting wine auctions as a lucrative fundraising
source of revenue. If you have not attended a live wine auction,
participated in an online or silent wine auction before, here are
some important facts that you should know as a bidder.
With wine interest and consumption at an all time high, it should
come as no surprise that we are seeing a surge in the popularity of
wine auctions. Wine auctions are becoming so popular and trendy that
they are literally creating their own specific niche in both the
wine and auction industries. As a bidder you will find two basic
types of wine auctions with two distinct and separate agendas. There
are retail wine auctions (for profit) and fundraising wine auctions
(philanthropy).
Fundraising auctions are typically hosted by a non profit or
charity organization seeking to raise revenue for a specific cause.
You should not seek bargains at fundraising auctions, because the
goal of the bidder is generally one of philanthropy. Fundraising
auctions have an attractive bidder perk; they are sales tax exempt.
The biggest bonus for bidders attending fundraising auctions is that
if bidder’s spending exceeds the posted retail amount on a
particular auction lot, then the IRS allows the bidder to deduct the
difference between the posted retail price and the actual amount
paid for the item as a charitable tax deduction on his 1040 tax
return.
Retail auctions are completely different in focus, as is bidder
method and strategy. In this venue it is completely natural for the
bidder who seeks to acquire the “great buy” or “steal of a deal”.
Keep in mind that it is the job of the auctioneer to make money for
the auction house, and fair market value is established by the high
or winning bid. Buyer’s Premiums (Additional commission percentage
charged to you the bidder, typically 10% to 20 %.) are commonly
utilized by the auctioneer or gallery to cover overhead or increase
revenue, so figure this amount and sales tax into your bidding
strategy.
Within both of these venues the bidder may find a variety of
different style formats used by the auctioneer or auction house. The
live auction format, featuring a live auctioneer, is most common.
With today’s available technology, this format can even be simulcast
in real time on the Internet. The online auction is also conducted
in real time, and does not use a live auctioneer. A lesser used
format is the silent auction in which bids are posted onto a clerk
sheet, and the bid increments are established in posted
predetermined amounts. The least used format is the sealed bid
auction, where bids are typically placed in sealed envelopes and not
opened until the auction’s conclusion. All of these formats can be
used in both retail auctions and fundraising auctions.
Some sobering advice to bidders: Attend all auction previews.
Take time to inspect the condition of the wine lots to be auctioned.
The preview allows you time to ask the wine auctioneer any questions
you might have. The auction catalog is a bidder’s best resource. In
the auction catalog you will find auction house rules, specific
information about each of the auction items, and the item’s
anticipated bid value.
If you have never bid at a wine auction, attend a few auctions as
an observer first. Make sure you know what you are bidding on,
because this can be an expensive lesson for you to learn. Don’t be
intimidated. Wine auctions can be great fun! You can a find a wealth
of information about live and online wine auctions on the worldwide
web. For more information about auctions in general, please visit
AuctionZip.com.
Not only can wine auctions be great fun and entertaining, but they
are also a great way to stock your cellar with prized wines.
Tom DiNardo is a Wine & Fundraising Auctioneer.
Tom is also a freelance writer for the Wine Enthusiast magazine,
AuctionZip.com, and GlobalAuctionGuide.com © 2005 Tom DiNardo - All
rights reserved.
|
