Wednesday, August 10, 2011

Buying a computer at auction

This is way too long for a blog, but it might save you some money. I saved $550 on computer equipment using the tips below.

Computers and auction sales

Everyone coming into the Photography program at Lambton needs a computer, preferably a Mac. These units are not cheap, and many will look at options on saving money. One method I want to relate is the industrial auction sale. I attended a sale in Toronto last week, and want to recount my experiences for your benefit.
The first problem is finding out about suitable sales. Most newspapers have a page with auction ads. Toronto Star has them in the Sunday paper, the Globe has them on Satudays. Or you can do it the modern way, and Google for “industrial auctions Ontario Canada”, and all the big companies come up on the first few pages.
Then it is a matter of checking out the listings, and looking for places that might have computers. Macs are much rarer than PCs, but printing and design places that go out of business are good prospects. There were about 50 Macs available at the sale I went to (a Toronto printer). However, only about 10 of them were worth buying, the others being too old.

You want to check out the models in the auction ... hopefully before the sale. Then use Google to find a site that will relate the model number to the date the unit was released, and thus get an idea of the age of the unit. Apple seldom carry a model for more than two years. Be careful about buying old machines. You will be in school for two years, at least, and when you come out you want a computer you can use for any freelance work you do. A machine that is three years old when you buy it won’t cut the mustard. You also want to make sure that the memory and disk capacity are sufficient. Some of the machines at the sale I went to won’t even run the newest Photoshop.

Registering for the sale

At the sale you first need to register. This may involve a registration fee, $10 at a recent auction I went to. But it will require a deposit, generally done with a credit card. The last two sales both wanted $1000, which was handled on a credit card. They put through a charge on the card, and then cancel it when you pay your account (or if you don’t buy anything). However, it is important to have a credit card if you want to bid at a sale (or bring along someone who does).

The next thing you need is an auction guide. They used to sell these for $1 to $5 at the sale of a few photocopied sheets. They will list the items being sold, in the order of sale (lots). Most companies now put these up at least a day or two ahead of the sale on their websites. This is where you want to get one. This allows you to check out the items if you can, and try to determine the price you want to pay.
At the sale I was at, there were several items listed I was interested in: an iMac desktop unit, large screen monitors, and some photographic equipment. I’m also looking for a new office chair for my home office. The week before I had bought a printer for $10, and got hit with the auctioneer grouping bids, so that I had to take two printers to get the one I want. I haven’t decided yet if the second one will be useful or not, but I got a $150 printer for $10. At that sale, entire offices were available for $25, but I didn’t have a way to take away a desk and credenza just to get the chair I needed. If you buy something, and don’t remove it promptly (usually within a day or two) then they will dispose of it and bill you the costs (out of your deposit).

At this sale I determined the price I wanted to pay for the various elements that interested me. Here you need to be careful, because it can get competitive in the sale, and you can wind up paying more for a used computer than a new one. I bid a couple times on the iMacs, which are about $1800 new, but they went for $1200. To me that was too high ... I had $750 as my limit. The monitor, which Apple sells for $999, went for $350, and I won that bid (at the top of my limit).

Watch the hidden fees

Here is the tricky part. My $350 bid worked out to be a $454.83 hit to my bank account. The auctioneer charges HST (13%) plus a buyer’s premium of 15%. That is what they take as the costs of running the auction. And it gets added before the HST. The earlier auction I was at 17% buyer premium. And if you actually pay with a credit card, rather than cash or debit, then they will charge whatever their credit card fee is, usually another 2% or so. It can all add up, which is why I didn’t bid $1200 for a computer. The total hit would have been near $1500, and $300 savings is not enough for me not to buy a new machine from Apple.

Another tip for sales: Listen closely to the auctioneer. Sometimes he will offer several lots together, and may chose to do so in one of three ways. He might gang the items up, and sell them for one price (usually done with cheap stuff, like my printers). Of he might gang them up and sell them ‘so much per’. So if there are eight items, and you bid $100, your actual cost will be $800. Watch out for this one. More commonly, he will bid several things at one price, ‘buyer’s choice.’ That means the winner can take all the items at that price each, or as many as he or she wants, picking the lots. Any remaining items are then offered to the next highest bidder, who can take one or more, and so on. Finally, he will offer them at that price to non-bidders. And finally he will reauction if some items are not sold at that price (and I have seen it happen that the price wind up higher in the reauction). Listen carefully and make sure you know exactly what you are bidding on.

There are no returns at an auction. You are buying things as is. No auctioneer I know of will intentionally cheat you, but they also won’t help you if the machine you buy doesn’t work when you get it home. (It is usual for them to have it running at the auction sale, so you can see it works. Sometimes it is up to you, or a technician, to get past password protection if the auction house did not have access to passwords. This generally means reformatting the hard disk and means more costs if you can’t do this yourself.

Get to the sale early. You can come the day before in most cases, but if it is out of town, you should get there at least an hour early. You may want to raise or lower some of your limits based on the condition of the equipment when you see it. Look around for items not in the catalogue. Often items get added. At the sale I was at, there were dozens of copies of software packages from Adobe and Quark sold. The Adobe package alone is worth over $2500, and there were several copies (5 or 6). Quark is over $1000, and there were as many of that, as well as other stuff. I would guess that there was $20,000 in software there, and it sold for $2500. I would have paid $900, the amount my educational Adobe will cost me. It just shows how paying attention can help. The goods sold cheap because they were not advertised, and were hidden in a corner until the auctioneer pointed them out.

If you want to try out the industrial auction route, good luck.

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