“12-6. $12,600! Habada-gibada-monay! Monay! MONAAAYYYY!!!!”
That not so subtle mention of ‘monay’ was my cue. It was auction-speak for, “Go ahead and find a bunch of car dealers that are close together on the block. Look at me, and pretend like one of them wants to offer more money’.”
“Then act slightly impatient. I’ll take care of the rest.”
A lot of folks believe that when an auctioneer and his ringman are trying to negotiate a higher final bid, they’re trying to be heroes and make a buck.
The truth is almost always the exact opposite.
See, every car we sell at an auction has a floor. In the case of the above example, the car happened to be a one year old Mercury Milan.
Like most of the Mercurys from the late 2000’s, this one wasn’t much to look at. Beige, bland, a waterfall car. For all we cared the damned car could have been a pallet of potatoes and we would still find ourselves in the same predicament.
The manufacturer wanted thirteen grand for the car. No ifs. No buts. No compromises, and no $12,900 as a counter. The lady in charge of selling this car from Ford had about 600 vehicles to sell that day, and we couldn’t waste much time on a car that was as important to Ford as a pallet of potatoes.
“Hold on Steve! I’ve got the high bidder here at 12-5 and he gets first shot!”
The auctioneer would catch me as I would be walking towards him with a fist near my chest, and my other hand pointed towards a bunch of dealers (never a specific one). I would exchange a once earnest face with a mildly sad dejected one as I would stop right in the tracks. The auctioneer would then motion the high bidder to come to the auction block.
“Look Fred, Dee has about $13,200 on her sheet. The absolute best I can do is sell it for $200 off the floor which is right at 13 grand.”
Fred was a familiar face, as was nearly everyone else. This was a closed factory sale, which meant that nobody other than a franchised car dealer of that specific car brand could bid on the vehicles. Everyone else, from Carmax to Joe Blow Auto Sales was not welcome. In a span of a few seconds, Fred had to figure out if he was willing to spend a strong thirteen-k on a Milan.
Sometimes Fred would bite. Other times he’d walk away and say no. Every once in a while, he would counter at $12,800 at which point the auctioneer could either hold that bid as an ‘if’ deal so that Dee could go after the sale, call a higher-up and see if she could sell it for that price. Other times, the floor would be a commandment from the high heavens of a computerized valuation system and the seller would simply need to get 13 grand in order to get the deal done.
This is how daily life is at the auctions. You are constantly trying to get deals in the sellable range. Hundreds of vehicles every day. Five to seven auctions a week if you are good at it.
The trick that I just mentioned to you is done a hundred different ways at the auctions. You would think that a talent like this would be unique in this world. Nope, we all have done this, and everyone from attorneys to parents of teenagers know how this negotiation works. Although I would like to say that you get experienced when you deal in this type of environment, the truth is we all deal in situations at some point in our lives where there is only one ‘bidder’ and the guy doing the talking likes to ‘pretend that he’s got money’. When the only thing he really has is a little bit of time, and a whole lot of nerve.
Feel free to share your experiences. We all have tricks of the trade.
(Note: Part Two will be released at three o’clock later today.)