A Hack For ThatSave 30–90% Off Retail Using Online Auctions
I’ve been using online auctions of returned/surplus items for several years and have spent tens of thousands of dollars on items. You can definitely get great deals, but they are great for a reason. Here’s how to navigate all the pitfalls.
Why Do These Discounts Exist?
Sometimes they are clearing out excess inventory at the end of the season (you’ll see lots of the same item in this case), but mostly these are returned items that aren’t in perfectly resaleable condition. The packaging might be damaged. It might have minor signs of use or cosmetic damage. It could be missing parts, or not working perfectly. There’s always a reason. You have to look at the photos, read the description, and figure out what the reason is and whether it’s important to you or not.
What Else to Watch For?
There’s no warranty. There are no returns unless the description or photos were inaccurate. So if the jeans don’t fit, too bad, unless the listing stated the wrong size. Usually if the item says “Untested” and it doesn’t work, you can get a refund. But if it says “As Is” or “For Parts”, too bad. Some places have no returns for items under a certain price (~$20) regardless. Pick-ups can take a while. It’s best to wait if you can, and pick up during weekday afternoons.
How Do I Do This?
To start, search HiBid.com by postal code and you’ll see the auctions in your area and when they are. In my area, there’s one large one (Encore) that has by far the most items and the most large/expensive items, but it’s the most competitive, and the quality of its items varies the most. Most will have 1–2 auctions a week. The smaller auction sites are only really worth it for relatively expensive items or if they are on your commute.
I’d recommend having a list of keywords for larger purchases you are thinking of, or particular categories, and searching for those on HiBid.com by postal code. You’ll have your own hassle tolerance, but I’d say items that retail for $50–2,000. I like to sort by auction end date so the items closing soonest come up first. If I’m definitely going to buy something at retail within a week or so anyway, I’m more likely to search for it, even if it’s on the low end. Just browsing auctions will have too low a hit rate. You have to know what you are looking for.
Then, if you find something worth buying, place a bid on your favorite single listing (there could be multiple options) or the one that closes soonest. Don’t just bid the next increment; bid an amount that’s right on the edge of being worth it for you, where any higher and you’d be happy to go without it or just buy it at retail. For me, that’s typically about 50% of what I can find it for online, unless I am definitely going to buy that exact item at retail within a week or two if I don’t win, in which case I’ll go up to about 75%. Keep in mind there’s typically a per-item fee (~$1.50), a buyer fee (~16%), and then normal sales tax (~13%), so be prepared to pay more than you bid. You’ll often get it for way less than your max bid, but this saves you time, keeps you from getting caught up in bidding wars, and allows for the next step.
Now, assured that you are going to win at least one item from a particular auction that’s worth the trip, browse the auction’s catalog by the categories you are interested in and bid on any other items you’d like to have if the price is right. For these other items, I’d bid no more than 50% of retail, unless you would go out and buy it at retail within the next 2 weeks anyway. You can bid on smaller items at this stage, since you are likely going to be picking up anyway.
Getting the Best Price
Look up the price online, even if the listing has a retail price. I’ve seen items go for more than I could just buy them for at retail, even before all the fees!
You generally want to be the first person to bid up to a particularly salient price point, e.g. $20, since that’s when items become returnable if there’s an issue, or the price after which the bidding increment increases. It’s better to be the first person to bid $100 than to have to one-up a $100 bidder by bidding $110. Don’t bid $28.50; bid $30.
When there are multiples of the same (popular) item, the first one is typically the cheapest. Bidders will hesitate as the price rises, but that can leave lots of bidders for the last item, and FOMO takes over. That said, if you see an item you haven’t seen before, check whether it’s scheduled for future auctions as well. If you can wait a week or two, the price often declines.
If you are watching live or close to the start of bidding, sort by price ascending. You may find something you could use and snag it for $1.50. The best finds are parts or accessories you need, since you may not be bidding against anyone at all.
Many auctions use specific keywords such as “as-is” or “for parts only”. Search the auctions where you already have winning bids for these keywords. These items usually go for really cheap, and you might be able to use them as is, use them for parts, or fix them if you are so inclined.