Online CNC auctions can be a bit confusing for first-time buyers. If you are not familiar with industry lingo you might end up losing an auction you could have won, or worse, having a surprise on your invoice. Many online auction sites post a glossary of terms, but these long lists can be overwhelming. Here we break down the 5 most important auction terms used on Machine Tool Bids and most other cnc auction sites.
THE 5 TERMS THAT WILL HELP YOU WIN ONLINE MACHINE TOOL AUCTIONS
The minimum amount of money the seller is willing to accept for an item. If the bidding does not reach the reserve price then there is no sale, and the seller will keep the machine. In this way, setting a reserve price helps protect the seller's bottom line.
If an online auction listing says "reserve not met," it means that the bidding is still below what the seller is willing to accept. On the other hand, if the bid is is greater than or equal to the reserve price, the auction listing will say "reserve met."
STARTING BidSometimes called the “minimum bid,” this is the amount suggested by the auctioneer to open the bidding. It will be lower than the reserve price.
Maximum Proxy BidA proxy bid is a bid that someone else places for you. In most online auctions, you can allow the auction platform to automatically place a proxy bid on your behalf if you are outbid by someone else. All you have to do is enter in the maximum amount you are willing to pay (your maximum proxy bid), and the computer does the rest.
A fee the buyer pays to the auction house, usually expressed as a percentage of the selling price. Online machine tool auctions typically charge a 15-20% buyer's premium.
For example, let's say you place a winning bid of $1000. If the auction house charges a 15% buyer's premium, your total cost will be $1150. Be sure to take the buyer's premium into account when you set your maximum bid.
AS IS, WHERE IS
These two phrases are usually used together, and they are part of the terms and conditions for almost every machine tool auction. "As is" means that there are no warranties on the machine. "Where is" means that you have to make your own arrangements for transporting the machine from its current location to your shop.
Use the comments to tell us about any other terms you don't understand!