Never Get in a Bidding War

It is often possible to acquire some very valuable parts of businesses at auction or a real going out of business sale. I have several acquaintances that stocked their new restaurants with equipment that they nearly stole from failed businesses. The thing about buying your equipment on the used market is to really know what it would cost you to buy the same stuff new. Before you go to a sale of used equipment get the prices of what you need from more than one new equipment supplier. Then, armed with real knowledge you can go out into the real world and find what you are looking for from ten to thirty percent of the cost of new stuff. Never buy new when used will do. And never, ever, ever get in a bidding war at an auction.

I had a friend in the used farm equipment business. He used to live off money he made from what he bought at auctions. We’ll call him Sam for the time being. Sam had a long history of buying equipment at auctions all over the five states around the upper Midwest. He squeezed nickels until the buffalo had a bowel movement. Sam was in fact the cheapest guy I knew for many years.

He had a few rivals in the used equipment business. He always got to auctions a couple of days before the bidding started. He always tried to buy up the cherries before his rivals got there. Sometimes that worked.  When it didn’t he had a few tricks. He carried a squeeze bottle of hydraulic fluid and would leave a little on places where a leak could be costly. He also had a little bag of metal shavings to make it look like a shaft was grinding itself up. He sometimes carried a bag of metal rust to spread out on a shiny part so it looked like it had been mistreated.

Sam loved to beat his competition to a bargain. His duplicity knew few bounds. But he had one man that he particularly hated to lose to. One of his former employees knew a lot of his tricks and made it hard on Sam when he could. Let’s call that guy Morris.

One day in early springtime there was an auction in the rain. Sam loved rain, it kept the prices down. Morris and Sam and I were the only real bidders in that small crowd. There were three tractors for sale and one of them was only a year old. Sam started the bidding low and Morris responded. I made my only bid of the day and pushed the price right up to where it should have ended. Morris upped it ten dollars and Sam pushed it up ten more. I backed off and watched the steam coming out of both of their ears. Morris would go up ten, Sam would go up twenty. Then Morris went up fifty. Sam responded by upping the bid by a hundred. The auctioneer was loving it. The rest of us were just watching.

When the bidding ended Sam had paid forty dollars more for the tractor than he would have paid to buy it new at retail. Morris was still angry as hell at Sam after that but I pointed out to him that he was the winner. He kept his money in his pocket.

Never treat an auction for used equipment as a competitive event. And never, ever, ever get caught up in a bidding war. By the way Sam defaulted on his bid and I got the tractor for my original bid. Morris was too irritated to stay around to see what happened after the auction.