Knowing These 4 Poker-playing Styles Can Improve Your Auction Bidding
Similar to a poker game, understanding an auction opponent’s bidding style and knowing how to respond can improve your auction results. Photo credit: Irish Poker Open 2008 , Wikipedia.
Last week an article rolled across my Google News feed titled “Types of Poker Playing Styles – Classifying Opponents.” I’m not a gambler (unless you consider owning a small business to be gambling), but the headline intrigued me, so I read the article. As I read, I realized that I had been unconsciously classifying live auction bidders in a similar manner for decades and adapting my bidding (or my bid calling) accordingly. The Tournament Terminator piece concluded by stating: “Knowing your opponents and knowing how to play against them is an important skill in poker to increase your profits.”
Similarly, understanding an auction opponent’s bidding style and knowing how to respond can improve your auction results. It’s always helpful to identify aggressive and passive bidders so you can pace your bidding. An examination of an individual’s bidding style early in an auction can provide clues about your competitors which may prevent you from placing over-zealous bids against a committed bidder.
Tournament Terminator recognized two essential playing style components:
- Starting hands: does the player engage with a variety of dealt hands (loose style), or wait for “good” hands (tight style)?
- Betting pattern: does the player bet frequently (aggressive) or rarely (passive)?
The Terminator site offers these two components in various combinations relating to poker play. From the components of the starting hands and betting patterns, four basic poker playing styles are derived:
For auction purposes, “starting hands” will instead be the number of items a bidder bids on; “betting pattern” will instead be how many bids are placed for each item. For example, “loose” bidders bid on a variety of items, and “aggressive” bidders continue to bid on an item until they win it or reach their limit.
There are generally four types of bidders commonly seen at live auctions: Auction Enthusiasts, Collectors, Dealers, and Family (at estate auctions).
I’ll simplify by organizing the two components into the four types of bidders commonly seen at live auctions: Auction Enthusiasts, Collectors, Dealers, and Family (at estate auctions).
Auction Enthusiasts are loose, passive bidders. They will bid on a variety of lots, but seldom bid higher than a few dollars for any item. Enthusiasts attend auctions for entertainment; going to an auction provides social engagement, food (of a sort) and a little excitement. They will arrive shortly before an auction starts and they don’t spend much time examining lots ahead of time. Consequently, they will sit near the front or off to the side, where they can get a quick look at an item as it comes to the block. Their hope is to go home with a few curiosities without having to spend a lot of money. Then, next week, they are back again. Enthusiasts have the satisfaction of “winning” items that there isn’t a lot of demand for; consequently, they often have years of auction purchases stuffed into closets, garages, barns, and storage units. It doesn’t take much effort to out-bid an Enthusiast; they will drop out of the bidding early.
Collectors, on the other hand, are tight, aggressive bidders. They will bid within a particular category of collectible and bid aggressively until they either win the item or reach their price limit. They will arrive early and spend time examining a defined category of collectible. They frequently reference a guidebook or a tablet, searching online resources for pricing, marks, and connoisseurship information. Their motivation is pride in their collection, so whatever they bid on must be in pristine condition. If you hope to win against a collector, be prepared to spend top dollar for your purchase.
Dealers are “loose, aggressive” bidders. Their cohort includes antique dealers, interior decorators, other auctioneers, eBay sellers, and anyone who expects to profit from their purchases. They bid aggressively on a variety of items but drop out without hesitation when their bid limit is reached. Dealers are easy to spot: they arrive early, carefully inspect the merchandise, and only bid on what they have inspected. It’s rare to see a spur-of-the-moment bid from a dealer. When I attend an auction, I watch the dealers closely. The items they bid on have been carefully examined and are usually worth buying. Since they will stop bidding when their “wholesale” price is reached, I can usually win an item at a good price (provided my intention is to keep it, not resell it). If I’m bidding against a collector and a dealer, I’ll drop out right after the dealer does.
Family bidders are unpredictable. These are the folks who are related to the decedent but weren’t left anything in the will. They are tight bidders, in that they only want items that belonged to the decedent. They may bid passively or aggressively depending on how badly they want an item. Sometimes, they announce that they are family. I never bid against a family member; it only creates hard feelings.
A competing bidder’s style doesn’t matter if you go to an auction unprepared.
Of course, a competing bidder’s style doesn’t matter if you go to an auction unprepared. Thorough preparation for an auction consists of:
- Going to the preview. You’ll not only have time to carefully examine the lots, you’ll be able to determine what you’ll need to get your purchases home (truck? boxes? wrapping paper?).
- Having access to a pricing database and marks library; of course, I use WorthPoint and heartily recommend them.
- Knowing your bidding limit for each lot; be sure to allow for buyer’s premium, taxes, shipping, or other fees.
Christie’s 1999 auction of Marilyn Monroe’s personal property is known by some as the Auction of the Century. The catalogue, the admission ticket, and the paddle sold in April 2016 for $200.
Just as with poker players, auction bidders have “tells” (styles, in this case) that can give you a bidding advantage if you know what to look for.
Wayne Jordan is a Virginia-licensed auctioneer, Certified Personal Property Appraiser and Accredited Business Broker. He has held the professional designations of Certified Estate Specialist; Accredited Auctioneer of Real Estate; Certified Auction Specialist, Residential Real Estate and Accredited Business Broker. He also has held state licenses in Real Estate and Insurance. Wayne is a regular columnist for Antique Trader Magazine, a WorthPoint Worthologist (appraiser) and the author of two books. For more info, check out Wayne’s blog at SellMoreAntiques.com.
WorthPoint—Discover Your Hidden Wealth
(Visited 396 times, 1 visits today)