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 What are bidding increments and how do I know what they are?

There are various methods by which auctioneers will accept bids at auction. Most chattel auctioneers will accept bids at certain increments and possibly update the amounts as the auction progresses. This post explains the incremental bidding process used by the auctioneers at Hinter Auctions.

What are bidding increments?

Bidding increments are simply the amount the auctioneer will increase the bids during the auction.

As a general rule, the bidding increment will be approximately 10% of what the current bid is. For example, if the bid is currently $200 you may expect the bids to be increased by $20. The auctioneers at Hinter Auctions (and most auction houses) have a set base of increments to work with. These are called number brackets.

Whilst the auction house does have these number brackets to work with they are a guide only and the auctioneer does have full discrepancy as to what the bidding increments should be. The auctioneer may increase or decrease the bidding increments during the auction for various reasons to maintain flow and efficiency.

Below is an example of the Hinter Auctions number brackets.

How do the bidders know what the increment is?

There are 2 answers to this. One for on-site bidders and another for online bidders. As Hinter Auctions often run simulcast auctions (on-site and online) I will answer them both.

On-site Auction Bidders

In a live auction format, the auctioneers will state what the increment is to be. With the fast pace of the usual chattel auction, it is important to listen to what the auctioneer is saying. Auctioneers often have their own unique style of stating the increments. You may hear the auctioneer say something as simple as “$10 bids” or another way of asking for the same increment may be “taking teners”. Another way of stating increments may be in percentages for example the auctioneer may say “1/4 bids now”. The increment in this case would depend on where the bidding is at eg. if bidding is in the hundreds then a 1/4 bid would be $25. If it is in the thousands a 1/4 bid would be $250 and so on.

This may seem a little daunting but if you listen to the auctioneer call a few lots you will soon understand the general bidding increments and how they are called.

Online Auction bidding.

Whether you are bidding online in a live or a timed format the answer is simple and basically the same. On the screen, you will see what the asking bis is, rather than the increment. For example, if the current bid is $50 and the current increment is $10, then displayed on the screen will be the asking bid of $60.

Can a bidder ask the auctioneer to accept a bid out of increment?

A bidder can ask the auctioneer to accept a bid that is out of increment. For example, there is the so-called “killer bid” where a bidder may call for a high bid in an attempt to put off other bidders. The opposite is also true where a bidder may call for a lower increment in an attempt to hopefully secure the item at a lower price.

It is totally up to the auctioneer what bids are accepted. In order to maintain control of the auction the auctioneer may not accept bids that are out of the increment stated.

Keep it fun and flowing

The main reason Hinter Auctions auctioneers use set number brackets is to keep the process fun and flowing. Most of our auctions contain between 300 – 400 lots and so it is imperative that the sales are conducted in a smooth, flowing, and fun manner. We love to see new bidders learn about the auction process and get amongst the bidding action.

If you would like to learn more about increments or the auction process feel free to contact us any time.

 

 

by Richard Hansen

by Richard Hansen

Director/Auctioneer

Richard is a licensed chattels auctioneer and a director of Hinter Auctions based on the Sunshine Coast, Queensland, Australia. He regularly posts updates and useful tips helping visitors understand the value of true price discovery and the auction method of marketing.

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