How to Buy Wine at Auction
Are you unsure how to buy wine at auction? This guide will show you the steps, from research to bidding, to help you understand the best practices.
Key Takeaways
Whether you are a collector, investor, or wine enthusiast, define clear objectives for bidding on wine to guide your decision-making process and develop a strategic buying plan.
Research reputable auction houses, considering fees, success rates, specialization, and whether you prefer live or online auctions.
Thoroughly study auction catalogs, focusing on the wineโs age, storage history, ullage levels, and provenance to make informed decisions and avoid common pitfalls.
Define Your Objectives
Before you engage in bidding, itโs necessary to outline your objectives. Here are some possible goals to consider:
Are you a collector looking to fill gaps in your cellar with rare wines?
Or perhaps youโre an investor seeking bottles that will appreciate over time?
Maybe you want to enjoy fine wines that arenโt readily available at retail stores.
Clear goals will guide your decision-making process and help you focus on specific regions or styles.
For collectors, a common objective might be identifying specific bottles or vintages to complete their collection. Not only does this give direction, but it also adds a layer of satisfaction when you finally secure that elusive bottle. On the other hand, investors might prioritize wines with strong provenance and potential for future value appreciation. Enjoyers of fine wine may look for well-priced bottles to enhance their drinking experience, while those into wine collecting may focus on building a diverse and valuable assortment.
Setting clear objectives can also help develop a strategic approach to auctions. Patience is key, as Michael Davis notes. Winning the wine youโre looking for often requires persistence, but the rewards are worth it. Before entering the salesroom, devise a buying strategy and list potential purchases to stay focused and disciplined during bidding.
Research Auction Houses
With your objectives clarified, your next task should be an investigation of trustworthy major wine auction houses. An Auction house like Sothebyโs, Christieโs, and Acker Merril & Condit, well-known for their expertise in wine auctions, has a proven track record of success and specializes in various types of wines, making them a reliable choice for serious buyers.
When comparing auction houses, consider their fees, which can include both buyersโ and sellersโ premiums. Auction houses usually charge between 19.5% and 24%, and these commission fees should be factored into your budget. Additionally, look into an auction house’s success rate, the types of wines it specializes in, and its reputation in the market. Some auction houses might excel in certain regions or styles, such as California wines or Bordeaux
What is a Bordeaux Blend? Bordeaux blend... More, which can align with your objectives.
Many platforms offer online auctions if you prefer the convenience of this service. However, be aware that these newer platforms often sell their lots through third parties, which will affect the buying experience. Whether participating in live or internet auctions, ensure that the auction house meets your needs and practices due diligence when inspecting and appraising the wines it sells to ensure that each bottle is authentic.
Study Auction Catalogs Thoroughly
Making informed decisions at wine auctions requires an in-depth study of the auction catalogs. These catalogs are treasure troves of information detailing everything from:
The wineโs age
storage history
ullage levels
condition reports
By scrutinizing these details, you can assess the quality of the same wine and detect any potential issues.
Pay close attention to the wineโs provenance. This is often more important than the price. Provenance can reveal the wineโs storage conditions and ownership history, which are critical for ensuring the wineโs quality, especially when dealing with older wines. For example, wines stored poorly may have compromised flavors or reduced longevity, which can be a red flag for potential buyers.
Moreover, the logistics of shipping and payment after winning a lot are vital. Understanding these factors beforehand will help you avoid unpleasant surprises and ensure a smooth transaction. Always cross-reference the catalog details with your research and set a maximum price to avoid overbidding.
Understand Market Value and Pricing
To make smart bids, itโs necessary to understand the market value and pricing of the wines youโre interested in. Cross-referencing retail prices, past auction results, and auction estimates will give you a clear picture of what you should expect to pay. Auction houses provide estimates as guidelines. Remember, these are not final cost predictions.
The importance of setting a realistic budget cannot be stressed enough. Long-time collectors, investors, and business executives often influence prices for collectible wines, making some bottles highly sought after. By knowing the market value, you can set a maximum bid and avoid the temptation to overspend during a competitive auction.
Budgeting also involves understanding the different types of lots, such as mixed lots or single bottles. Each lot is auctioned off one at a time, and the auctioneer may change the increment based on the competitiveness of the bidding. Be prepared and know the value of each lot youโre interested in so that you will bid confidently and smartly.
Account for Hidden Costs
Purchasing wine at auction necessitates factoring in hidden costs that can significantly increase the total price. One of the main hidden costs is the buyerโs premium, which ranges from 19.5% to 24%. This fee is added to the hammer price, so factor it into your budget from the outset.
In addition to the buyerโs premium, consider other potential costs such as sales tax, shipping, and insurance charges. These can vary depending on the auction house and the geographical location of the auction. Always listen closely to the auctioneer for any additional fees, including the buyerโs premium, that might apply to your purchase.
Extra vigilance is required when bidding in online auctions. Some online auction houses might charge as high as 31% for the buyerโs premium, so itโs crucial to read the fine print to understand all associated costs before a bid is placed. Shipping costs can also be significant, so check estimated shipping costs beforehand to avoid surprises.
Develop a Bidding Strategy
A solid bidding strategy is pivotal in securing the best deals at wine auctions. Before the auction begins, set a maximum bid and commit to not exceeding it, no matter how tempting the bidding becomes. This will help you avoid overspending and auction fever.
If youโre unable to attend the auction, placing absentee bids is worth considering. This ensures you still have a chance to win the item within your budget without being present. Absentee bids can be particularly useful in online auctions, where you can set a maximum bid and let the system automatically increase your bid by the minimum increment until youโve either won or reached your limit.
Effective timing of your bids is also of significant importance. Some bidders prefer to wait until the last minute to place their bids, hoping to outmaneuver competitors. While this strategy can be effective, be cautious of the fast pace and potential competition from other bidders. Always stick to your pre-determined maximum bid and be prepared to walk away if the bidding exceeds your budget.
Attend Auctions: Live and Online
Gaining experience and confidence requires a familiarity with both live and online auctions. Most wine auctions are held between September and May, so plan accordingly.
Live auctions offer the excitement of being in the room, feeling the energy, and watching the auctioneer in action. Attending live auctions can provide valuable insights into the bidding process and allow you to observe how experienced bidders operate. If youโre new to auctions, consider attending a few without bidding to get a feel for the environment.
Online auctions, on the other hand, offer convenience and accessibility. They allow you to participate from anywhere in the world and often provide the option to place absentee bids. However, online auctions can move quickly, so itโs crucial to be prepared and have your strategy in place before the bidding begins.
Whether live or online, participating in auctions will help you build confidence and refine your bidding skills.
Avoid Common Pitfalls
To make informed decisions and secure good deals at wine auctions, itโs necessary to avoid common pitfalls. One of the most critical steps is setting a maximum bid and strictly adhering to it. Auction fever can lead to emotional and irrational bidding, resulting in overspending.
Investigate the history of the wine’s storage to avoid buying bottles that might have been poorly stored. Poor storage can significantly affect the wineโs quality and value. Pay close attention to the details in the auction catalog, such as:
The wineโs age
storage history
ullage levels
condition reports
- Verify that it is authentic – if it seems too good to be true then it probably is.
These details can help you detect red flags and make more informed decisions.
By being diligent and cautious, you can avoid the common mistakes new bidders make. This will help you secure quality wines at fair prices and ensure your auction experience is enjoyable and rewarding.
Seek Expert Advice
Seeking advice from auction experts can prove invaluable in making informed decisions about specific wines, their provenance, and the auction process. Experts can provide insights into the market trends, the history of particular wines, and the authenticity of the bottles.
Reviewing past online sales and recent catalogs can also help you understand what is selling and at what prices. Joining auction house mailing lists can help keep you updated on upcoming sales and provide access to valuable resources and information.
By seeking expert advice and staying informed, you can navigate the auction process more confidently and make better purchasing decisions. This will enhance your chances of securing high-quality wines that meet your objectives and provide excellent value.
Where to Find Deals
A discerning eye and a strategic approach are best when searching for good deals at wine auctions. Mixed lots can offer great value, especially if you want to take a chance on lesser-known wines or mixed vintages. These lots often go for lower prices because they arenโt as highly sought after as single, prestigious bottles.
Understanding the competitive nature of the auction market can help you strategize your bids more effectively. Being aware of the demand and competition for certain wines can aid in timing your bids to secure the best deal.
Charity auctions can offer unique opportunities and one-of-a-kind lots. The Collective Napa Valley Barrel Auction and Hospices de Beaune Auction are notable examples where bidders can find rare wines and support good causes simultaneously. These auctions provide access to exceptional wines and contribute to worthwhile charitable efforts.
The Hammer
Buying wine at auction can be an exhilarating and rewarding experience if approached with the right strategy and knowledge. Each step is crucial for success, from defining your objectives and researching auction houses to understanding the market value and developing a bidding strategy. By being diligent and seeking expert advice, you can avoid common pitfalls and find excellent deals on fine wines. So, whether youโre a collector, investor, or wine enthusiast, embrace the journey and enjoy the thrill of the auction.
FAQs: How to Buy Wine at Auction
What are the main objectives for buying wine at auction?
The main objectives for buying wine at auction are collecting, investing, enjoying fine wines, influencing the types of wines to bid on, and establishing the overall strategy.
How should I research auction houses?
You should research auction houses by comparing their expertise, success rates, fees, and specialization. To begin your research, start with major auction houses like Sotheby’s and Christie’s.
What should I look for in auction catalogs?
When looking at auction catalogs, focus on the wine’s age, storage history, ullage levels, and condition reports to evaluate its quality and identify any possible concerns. This will help you make informed decisions when bidding.
How do I determine the market value of wines at auction?
To determine the market value of wines at auction, cross-reference retail prices, past auction results, and auction estimates to set a realistic budget. This will help you determine the market value effectively.
What are some hidden costs to consider when buying wine at auction?
When buying wine at auction, it’s important to consider hidden costs such as the buyer’s premium, sales tax, shipping, and insurance charges, as these can significantly increase the total price of the wine.
Be Vigilant – there are more Fake Wines out There than You Imagine
The wine counterfeit market has become increasingly sophisticated, so when in doubt, consult with wine authentication experts or stick to auction houses with strong guarantee policies.
Research the auction house thoroughly. Established houses like Christie’s, Sotheby’s, and Bonhams have rigorous authentication processes and will typically guarantee authenticity. Smaller or newer auction houses may have less stringent vetting procedures.
Examine provenance documentation carefully. Legitimate wines should come with clear ownership history, storage records, and purchase receipts. Be wary of lots with vague or missing provenance, especially for highly sought-after bottles from producers like Domaine de la Romanรฉe-Conti or vintage Bordeaux first growths.
Study the physical condition indicators. Look for consistent label printing quality, proper capsule appearance, and appropriate bottle glass color
What role do Anthocyanins play in wine? ... More for the vintage. Authentic older wines often show natural aging signs like label discoloration or slight sediment, while fakes may look too pristine or show obvious printing errors.
Know the market values. If a bottle of 1982 Chรขteau Latour is priced significantly below market rate, investigate why. Counterfeiters often underprice to attract buyers who think they’re getting a deal.
Request detailed lot photos. Reputable auction houses provide high-resolution images of labels, capsules, and fill levels. Compare these against known authentic examples from wine databases or collector resources.
Understand storage history. Professional cellar storage with consistent temperature and humidity records adds credibility. Be cautious of wines that have unclear storage conditions or have changed hands frequently without proper documentation.
Consider condition reports. Many auction houses provide detailed assessments of fill levels, label condition, and any concerns about authenticity. Take these seriously, especially for expensive lots.
