BARGAIN HUNTING The recession has led to a boom in
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industrial auctions where anything from a computer to a trailer can be picked up at knockdown prices. But bargain hunters should beware the pitfalls too.
• The Government continues to claim that the economy is showing the first signs of recovery, but some industrial auctioneers must be hoping that the slump is here to stay.
Brian Grainger, a consultant at the Incorporated Society of Valuers and Auctioneers, says: "The recession has given auction houses a new lease of life." But the auction boom is also good news for companies and individuals who want to pick up a bargain.
UNDER THE HAMMER Different sales attract different types of buyers, but they share one aim: to buy cheap. Virtually anything can be bought at an auction. Last October, for example, Weatherall Green and Smith held an auction in Barnsley where a range of haulage equipment came under the hammer.
Among the lots were 45 trailers by Crane Fruehauf, York, Lodge, Whitehead and, others; Volvo and Mercedes tractors; Lansing and Bagnall forklift trucks; and an Iron Fairy four-tonne mobile crane.
But even general-interest sales may have something to offer hauliers: at a recent Henry Butcher auction 1,600 IBM computers were snapped up for about 400 each.
The auction houses may be accused of thriving in a market of misery, but those picking up bargains on sales days are not complaining And the auctioneers could claim to be helping businesses survive by re-cycling useful equipment at bargainbasement prices.
There's also the advantage of cash and carry—outbid the opposition and you can put your acquisition to work straight away: "The lots are not delivered," says Tony Prior, marketing manager at Edward Rushton. "The buyer can take it away at the auction, but he has to arrange his own transport and installation."
As with all types of business deal, you need to keep your wits about you.
Auctions can be heady affairs; more than 1,000 people attend the big sales and takings can easily top Lim. Auctioneers can profit from the excitement of the occasion, which can lead inexperienced bidders to pay more than market price. At a recent Henry Butcher auction the managing director's car went for £33,000 £6,000 more than its trade value.
Buyers should also remember that lots are bought as seen: "You can normally see if an item is working or not," says Prior, "probably less than 1% of lots are not working on the day the receivers move in. But there are no guarantees that the lot bought is not that onein-a-hundred item."
Auctions are held all over the country, usually on the premises of companies in receivership, and most auction houses advertise their sales. Most have mailing lists too, and send sale catalogues to previous customers and interested parties. Anyone can phone up an auction house and ask to be put on its mailing list; a fee may be demanded if more than one catalogue is requested. These catalogues are crucial, not just for finding out what is on offer, but also for time to check market prices to avoid over-bidding.
Viewing times are listed in the catalogue. These provides a good opportunity to examine a lot and look out for potential faults. If the lot in question is an office desk it's easy to check its condition. A computer or a tractive unit demand.closer attention, and buyers will not be given the opportunity to test items at auction.
The viewing time can also be used to try and gauge the interest in a lot. There is no science to auctions. Even if two sales offered identical items, interest in various lots can make prices fluctuate wildly. Crafty customers will ask the administrators for information on viewing trends, although such a request may be frowned on.
It is important to be relaxed. Newcomers often fear that scratching your nose will be seen as the winning bid for an expensive lot; this simply isn't the case. At a bus auction some years ago one man almost got into trouble after trying to brush a wasp away from his face, but he did not have to pay.
OFF THE WALL "Walling" is the other great fear—when auctioneers bid "off the wall", using the wall as a ficticious extra bidder to push up the price. This is illegal and never occurs at the major auction houses."Ringing", where bidders agree to co-operate to hold down prices, is also rare, but both tricks do still crop up now and again.
If you don't fancy going to an auction, you might try a tender. This is similar to an auction, with catalogues and viewing days, but buyers put in their bids in advance and the highest bid wins.
The recession has not brought unmitigated prosperity for the auction houses—there have been so many company failures that the market has sometimes been flooded. But this is good news for buyers.
Edwin Kirker, head of insolvency at accountants Pannell Kerr Forster, explains: "People are not flocking to auctions with money and it's difficult to make money because there is so much on the market. A buyer can usually turn to at least two or three receivers to get what he wants." D by Tim Lawrence D Incorporated Society of Valuers and Auctioneers: 071-2352282; Grimleys: 071-2332228; Weatherall Green and Smith: 071405 6944; Edward Rushton: 071493 6787; Henry Butcher: 071405 5501.