Top Tips for Agriculture Auction Success
4 min read
At the time of writing, there are over 87,000 agricultural businesses in Australia, and a significant number of them got a foothold in the marketplace by purchasing machinery, equipment, livestock, and other essential items at reduced prices, from an auction.
Thousands of these sell-offs take place across the length and breadth of the great southern land every year, attracting farmers, ranchers, and agribusiness professionals eager to secure themselves a great deal.
While these auctions can be a veritable treasure trove, they are also fraught with pitfalls, particularly for those who are familiar with its finer workings.
However, like with anything, perfect preparation, and a sound strategy is the key to creating a favourable outcome. So, with that in mind, here are some top tips to help you buy (or sell) successfully at them.
Know what you want
The first thing you will need to do is establish what type of product you want. Once you have done this, it is important to then research how much the item will cost if you bought it brand new.
For some items, such as a tractor or eco-farming equipment, this is easier to do because a simple Google search will present you with a list of prices from companies who sell them brand new. However, it is a little more difficult for livestock, but you should get an idea from the Meat and Livestock Australia website (mla.com.au).
Note: Once you have established how much they cost at market rate, you will set yourself a price ceiling around which to work.
Know where to go
Having determined what you need, the next step is to pinpoint where you can purchase it from. As mentioned, there are plenty of cattle auctions across Australia that you can attend, so you should research where the closest or soonest ones near you are being held.
Most auction houses provide an online catalogue in advance of the event, which highlights what is going to be on offer. So, it is worth perusing that fully to identify any items that might be of interest to you.
Employ a watching brief
If you have never been to an auction before, it is a good idea to attend a couple first purely on a watching brief. You can do this either online or in person at the sell-off site.
Doing this will give you an idea of how the process works, particularly with regards to bidding and what kind of terminology auctioneers use, without having to commit to any purchases yourself.
Tips: This is important because auctioneers often use fast-paced language and specific terminology like “reserve price” (the minimum price a seller is willing to accept) and “hammer price” (the final bid), which are important to know moving forward.
Attending an event
Every time you decide to attend an event, make sure you arrive on time or register for an online auction well in advance of the date. This ensures you have a bidder number, which will allow you to take part in the auction and be ready for the start of it.
You should also take the time to understand the rules of the auction and what your rights are as a buyer or seller.
Stick to a spending limit
Many people, particularly those who were relatively new to auctions, have been guilty of getting carried away with bidding. For this reason, it is vital that you set yourself a spending limit, especially if you have done your research on market price, and stick to your maximum bid.
Typically, to be successful at bidding, you need to be patient, observant, and confident. It is a good idea to let others bid first to gauge the competition because if you jump in too early, it can signal your interest to others and drive up the price.
Tips: If the bidding surpasses your set limit, simply walk away. Try to remember there will always be another auction, and other options, such as renting equipment, might be better temporary solutions than overspending.
When formulating a budget or spending limit, make sure you factor in additional fees like transportation, taxes, and buyer’s premiums, which might inflate the final cost.
Plan for transportation, storage, or delivery
Successfully placing a winning bid for an item is a great feeling. However, you will need to make sure that you can take it with you.
Tips: Some items might be delivered by the seller. But for others, you might be responsible for taking it back to your property straight away.
You should make yourself aware of what is expected when you decide to bid on something and either bring the mode of transportation with you to the auction or arrange with professional haulers and the seller to move it at a different time.
Learn from Every Auction
If you really want to enjoy continued success at agriculture auctions, then you will need to constantly learn from them.
Every auction presents an opportunity to refine your bidding strategy or ability to spot a bargain. So, it is a good idea to tap into the knowledge of other more seasoned attendees and conduct an appraisal of what you could do better next time.
