By :
Tom DiNardo
Here’s an idea that will lift your spirits for the new year. Have you ever considered wine auctions as a tool for acquiring rare vintages or special buys? Wine auctions are quickly emerging as one of the hottest trends for the wine enthusiast, investor or avid collector in purchasing wine. Non profit organizations are even getting into the act catering to the demands of their donor wine connoisseurs by hosting wine auctions as a lucrative fundraising source of revenue. If you have not attended a live wine auction, participated in an online or silent wine auction before, here are some important facts that you should know as a bidder.
With wine interest and consumption at an all time high, it should come as no surprise that we are seeing a surge in the popularity of wine auctions. Wine auctions are becoming so popular and trendy that they are literally creating their own specific niche in both the wine and auction industries. As a bidder you will find two basic types of wine auctions with two distinct and separate agendas. There are retail wine auctions (for profit) and charity wine auctions (philanthropy).
Charity wine auctions are typically hosted by a non profit or charity organization seeking to raise revenue for a specific cause. You should not seek bargains at charity wine auctions, because the goal of the bidder is generally one of philanthropy. Charity auctions have an attractive bidder perk; they are sales tax exempt. The biggest bonus for bidders attending charity auctions is that if bidder’s spending exceeds the posted retail amount on a particular auction lot, then the IRS allows the bidder to deduct the difference between the posted retail price and the actual amount paid for the item as a charitable tax deduction on his 1040 tax return.
Retail wine auctions are completely different in focus, as is bidder method and strategy. In this venue it is completely natural for the bidder who seeks to acquire the “great buy” or “steal of a deal”. Keep in mind that it is the job of the wine auctioneer to make money for the auction house, and fair market value is established by the high or winning bid. Buyer’s Premiums (Additional commission percentage charged to you the bidder, typically 10% to 20 %.) are commonly utilized by the auctioneer or wine auction gallery to cover overhead or increase revenue, so figure this amount and sales tax into your bidding strategy.
Within both of these venues the bidder may find a variety of different style formats used by the wine auctioneer or auction house. The live auction format, featuring a live auctioneer, is most common. With today’s available technology, this format can even be simulcast in real time on the Internet. The online auction is also conducted in real time, and does not use a live auctioneer. A lesser used format is the silent auction in which bids are posted onto a clerk sheet, and the bid increments are established in posted predetermined amounts. The least used format is the sealed bid wine auction, where bids are typically placed in sealed envelopes and not opened until the auction’s conclusion. All of these formats can be used in both retail auctions and charity wine auctions.
Some sobering advice to bidders: Attend all wine auction previews. Take time to inspect the condition of the wine lots to be auctioned. The preview allows you time to ask the wine auctioneer any questions you might have. The wine auction catalog is a bidder’s best resource. In the auction catalog you will find auction house rules, specific information about each of the auction items, and the item’s anticipated bid value.
If you have never bid at a wine auction, attend a few auctions as an observer first. Make sure you know what you are bidding on, because this can be an expensive lesson for you to learn. Don’t be intimidated. Wine auctions can be great fun! You can a find a wealth of information about live and online wine auctions on the worldwide web. Not only can wine auctions be great fun and entertaining, but they are also a great way to stock your cellar with prized wines.
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