Auction is the best way to dispose your second-hand goods. And, it can fetch better value
The downturn’s almost gone and you’ve just received your raise. You definitely want to get your hands on the Blackberry curve and perhaps upgrade to a new car.
So what are you planning to do with your old stuff? Unless you don’t plan to donate it to your sibling or for charity, a good avenue would be to auction it.
The auction, an age-old trade technique, offers an advantage to both seller and buyer. An ideal platform for the price-conscious Indian consumer, the auction is a paradigm of the economics concept of willingness to pay.
Nayan B Yagnik, proprietor, Embassy’s Auction Centre in Mumbai, informed that they normally discoauraged small-ticket items. “For this reason, we charge a sum of Rs 30 for every item you would like auctioned.” Over and above this, there is a commission of 17 per cent borne by the seller. The Value Added Tax (VAT), which varies from 4 per cent to 12.5 per cent depending on the item, is borne by the buyer.
“Gifts (like perfumes) that you don’t like or books can find takers online, especially from lower-rung cities,” informed Deepa Thomas, senior manager, eBay India Pvt Ltd, an online marketplace. An advantage of online auctions is that your audience isn’t restricted by geography. For instance, LP records that would have earned a paltry Rs 50 with the raddiwala fetched an average of Rs 5,000 online. The records were bought by residents abroad.
So, how does an auction work?
More From This Section
Value: To start with, attach a realistic value to the commodity, also referred to as the base price or reserve price. Some auction houses decide the value of the commodity once you deliver your products to them. Hemant Srivatsa, partner, Murray & Co, an auction house based in Chennai, said: “This is dependent on factors, including usage and market value.”
His company provides a declaration form wherein you are required to give a description of the articles. Base prices at eBay start at Re 1 onwards. At Embassy, you are not required to set any base price, except for high-value commodities. In which case, the reserve price has to be Rs 1,000 at the minimum.
Listing: Typically, physical auctions happen periodically. Once your product has been valued, it is placed for an auction and the seller is informed in advance of the items placed under the hammer. For online auctions, you have a time line. “A seller is offered a period of one to 10 days on our site,” said Thomas of eBay. You have the choice to restrict your customer base to the domestic market or extend to international locations for an additional price of Rs 5 at eBay. (To be a seller online, you must register yourself online, for free.)
Payment: A buyer has the option of choosing his payment method online from the available options. If you are the buyer, you can choose to pay cash on delivery, too. At eBay, the money is withheld by the company till the product is dispatched by the seller. The seller then pays eBay a commission of five per cent. Auction houses either mail the seller a cheque or hand it out in person, after deducting their commission. But, they accept only cash from the buyer.
| COST OF AUCTION |
| Embassy’s Auction Centre > Fixed charge- Rs 30 per item + commission charges 17% ; withdrawal charges 3 % for item with reserve price > Selling price (At least 50% upfront) + VAT |
| Murray & Co > Only commission of 12% > Selling price + VAT + transport charges, if needed. |
| eBay > Listing fee Re 1 per item (free for first 20 listings) + final value fee (5% for lifestyle & collectibles, 1% tech, 6% media) + paisapay facility fee 4% (compulsory for first 20 listings) > Additional charges based on display as preferred by seller > Selling price + VAT + shipping charges, if required |
Delivery: Some auction houses provide the buyer with a delivery option at an additional charge. Yagnik of Embassy said, “The buyer has to pay at least 50 per cent cash deposit (for high-ticket purchases) and he has to collect it the next day after paying the rest." For a buyer online, it depends on the options provided by the seller. Sometimes, the product is shipped for free.
Siddharth, 35, a private company executive, had to refurnish his house. On a friend’s recommendation, he auctioned his old furniture at Murray. “The price at which each of my items were sold was at least 200 per cent more than what they could have earned had I opted for an exchange or sold them to a local vendor,” he informed.
Thomas of eBay added, “Online auctions save a lot of time for a customer by spending the least cost.” Of course, true auctioneers question the art in online auctions. Besides, it lacks the touch and feel factor. “In order to overcome the lack of touch and feel, we have recently introduced the buyer picks up and pays option,” said Thomas.
If you (as a buyer) think you have been cheated due to incorrect description, you have the option to return the product and get back your money. And, who loses if the product gets damaged in transit? Simple. “Nobody. We reimburse the seller and the buyer, as it is neither’s fault,” said Thomas. Simply, “trash it to cash”.