Products can be purchased from auction houses through live and virtual bidding. Auctions may or may not allow potential buyers to preview the items ahead of time. Bidding occurs within a short window of time. Competition from other bidders may make it challenging to acquire items at a desirable sourcing cost.
- Items may have already been identified by auctioneer
- History of items may be available from the auctioneer
- Valuable items can be sourced at low cost.
- Some items can be sourced in single or small quantities.
- Items sold as a lot may represent a better margin than individual items
- Stock cannot be replenished
- Identification of items may be challenging
- Item condition may vary from new to damaged goods with the same lot
- Items may not be available to inspect before auction.
- Items may require immediate payment after auction
- Quality of opportunity varies by auction
- Effective selection of products is dependent on clear understanding of resale value, online demand.
- Competition from other bidders can drive up sourcing costs
- Frequency of auctions may be low, inconsistent throughout the year
- Challenging to scale upwards as business grows.
- Pickup of items may be required within a short time frame
- Auction winner may be responsible for disposal of unwanted items from a storage unit