What are reserve auctions and what is proxy bidding? A reserve auction is when the seller sets a hidden price for the item that must be met before the item will sell. This is different from the starting price of the auction. The starting price is shown on the auction listing. It can be $1 and up. If a reserve auction receives bids it will not be a sale until the reserve is met. I have never listed or placed a bid on a reserve auction. It seems that the reserve price is seldom reached. I think a lot of sellers that use reserves are fishing for how much buyers are willing to pay for an item without having to sell the item.
A smart seller will just list his minimum selling price as the starting bid and not waste a buyer’s time with reserves.
Proxy bidding is the way that the auction sites raise the bids between competing bidders without requiring a bidder to pay his full bid if he is not bidding against another. For example, Bidder 1 bids $500 for a Colt revolver with a minimum opening bid of $400. There is no reserve, so the seller is willing to sell his gun for $400. If no one else places a bid before the auction closes Bidder 1 will win the Colt for $400. If Bidder 2 jumps in and places a bid of $450 then the proxy bidding program will up Bidder 1’s bid to $460 or enough to outbid Bidder 2’s bid.
The bids are raised in increments based on the starting price of the item. Usually five dollars or so. If Bidder 2 decides he really wants that Colt then he can go back and raise his bid to $600. Now Bidder 1 receives an email informing him that he has been out bid. He has the choice of raising his bid but it must be for more than $600 to win the Colt.
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I won an auction. Now what? The winning bidder in an auction will receive an email from the auction site informing them that they have won. The seller will also send an email with the total and the address to send payment. The shipping charge should have been listed in the seller’s description or included in the selling price. Beware of a seller that fails to mention shipping in the auction then tries to add $50 to the price. Ask before you bid. Most long guns can be shipped for around $20 – $25 via UPS ground or U.S. mail depending on the insurance coverage. Anyone can ship a long gun via either method.
Handguns can be sent US Mail only if the seller is an FFL holder. That will run $10 – $20. UPS requires handguns be sent next day air and that will cost $35 – $50 so if you are buying a pistol from a non-FFL keep that in mind. The details of how and where to ship firearms were discussed in a previous column.
The best form of payment is a U.S. Postal Service money order. They can be bought at any post office. The USPS money order is better than a private bank money order in case of a problem with non-delivery of merchandise. The USPS will go after fraud cases involving mail-order sales.
Many retail sellers will be able to take a credit card. I do not like online payment services such as Paypal because they have problems of their own with recovering payments when there is a problem with a transaction. You now will mail your payment and FFL copy to the seller. Some transfer FFLs will want to mail their FFL copy directly to the seller. Either way is fine. As long as both get there safely.
When your new treasure arrives at the FFL dealer you go in and fill out the paperwork the same way as in any firearm transaction. Be sure to inspect the gun to be sure it matches the seller’s description. It would be easier to make a return before you do the paperwork and take the gun home.
Good luck and happy bidding!
This article appeared in the September 12, 2011 issue of Gun Digest the Magazine.
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About the Author: Phillip Peterson is a federally-licensed firearms dealer with more than 20 years' experience in buying, selling and trading antique and collectible military weapons. He is also a popular columnist for Gun Digest the Magazine.
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