One of the most frequent questions we receive from clients is: “How much should I spend on a given bottle?”
While others may differ, my response is always the same: “If you walk into a wine shop today and you see that same bottle of wine on the shelf, what price would you need to see to buy that wine?” It is a simple mantra but one that should dictate your approach to every auction.
Now before you can think about bidding strategy, you have to know the basics, the so-called “rules of the road.” These rules apply no matter how you bid, whether it is in-person, over the phone, live via the internet or absentee. For every auction, you should always take the following into account:
- Each lot has a set reserve, which is typically set around the low end estimate but never exceeding that figure
- Each lot contains pertinent notes on conditions, with additional photos available upon request
- Tie bids are awarded to the earliest bid received
- Phone bidding can be set-up remotely; all we need to know is the lot numbers you’re interested in and the phone number at which we can best reach you during the auction.
- The Buyer’s premium is set at 19.5%, which means final sales prices will be 19.5% higher than the hammer price
So let’s move on to bidding strategy. HDH does a lot of research to set our estimates, reviewing past hammer results from HDH sales, past hammer results from competitor sales, as well as pricing on retail sites, helps us determine fair market estimates for every wine we sell. This creates a fair, competitive playing field for bidding.
These are the strategies I recommend to clients for auction bidding:
- Determine your needs and interests: You may be a private collector or a restaurant buyer. Regardless of your background, conduct an inventory on your existing cellar and identify gaps. Do you have an excess of California Cabernet? If so, then focus on Red Bordeaux. Has your collection of Italian Red dwindled? If that’s the case, then make a push for Barolos and Barbarescos.
- Set your spending limit: It is very easy to get carried away in the excitement of bidding so remember to set two limits, a limit for the overall auction and limits for each individual lot. It is also important to keep our 19.5% buyer’s premium in mind when setting your spending limit.
- Bid early and bid aggressively: Let’s say you bid on Lot 339 – 1976 Richebourg Domaine de la Romanée-Conti (1 meth (6L)) Est. $7,000-10,000. Placing a bid at $5,500 might not even hit the reserve. If your bid is $7,000, you might win but you run a greater risk of losing to an earlier tie bid. Bidding $8,500 would be more aggressive and likely take the lot. There are no guarantees but you increase your odds by bidding early and being more aggressive.
- Using the Index in the Catalog: The index gives you a quick and easy overall view of the wines being offered in the auction. In most of our auctions we will offer the same wine scattered throughout the catalog. The index will group these together by Region, Category, and vintage, noting their lot numbers for easy reference. Knowing the catalog thoroughly will help to make sure that you do not miss any bidding opportunities.
- Leverage the either/or bid: We often offer multiple lots of the same wine. For example, lots 328-335 are all listed together (1988 La Tâche Domaine de la Romanée-Conti (12 bs) Est. $15,000-22,000). If you’re only interested in getting one of these lots, the best way to achieve this is to place an either/or bid. We will execute your bid till we secure one lot within that grouping.
Hopefully these strategies and goals will help take some of the guesswork out of bidding. Good luck, and see you in February!