A wine auction is a thrilling event — especially if it’s your first time.

I attended my first wine auction in May in New York. This auction was run by the famed Acker Merrall & Condit. Founded in 1820, it bills itself as America’s oldest wine shop.

I arrived at the auction site — a large private room at a popular upscale New York City restaurant — in the early afternoon to partake in the pre-auction tasting hour.

Half a dozen tasting stations were stocked with multiple wines. I eagerly joined the throng moving from station to station.

From this hour came my first lesson learned: You have to pace yourself when tasting. The wine flows freely and you can get tipsy in a snap. Thankfully, I stopped short of that point, as I realized a few more sips and I would have been a little silly. A wine auction isn’t the time or place for losing control…

Getting blasted at a wine auction (particularly early in the day) could impair your judgment and you could leave with a wallet much lighter than you intended.

The tasting behind me, it was on to the main event. I had the good fortune to be seated near a gentleman from Europe who had many years of experience in wine investing.

Upon hearing I was a new oenophile (Greek for wine lover), he kindly took me under his wing to explain what was happening — and give me a crash course in the dos and don’ts for successful wine auction bidding and acquisition.

Here I present to you what I learned from him that day…

The 10 Commandments of Wine Auctions

Thou Shalt Know the Product Before Arriving

This should be an obvious point — you need to know what you’re buying. The auction house will make the catalog available before sale day. You can usually find it online or you can call the auctioneer and request one be sent to you.

Make sure you take the time to study it. Auctions can be long events. The one I attended had hundreds of lots — it was still going strong after seven hours. You must decide beforehand which lots you’re interested in to calculate when you should be paying attention.

Thou Shalt Have a Strategy Before Arriving

Going to an auction calls for planning. Do not wing it.

Once you know what will be up for sale and you’ve selected your acquisition targets, you need to determine your budget. (As a rule of thumb, a case of investment-grade wine will start at around $1,000.) Have at least a plan A and plan B for what you want to buy.

Thou Shalt Buy the Right Amount

Only certain kinds of wines are valuable by the bottle — predominantly Bordeaux or Burgundy from well-known French winemakers or possibly high-end Champagnes.

Most of the time, however, you’re aiming to buy at least one case. That’s the way to get the best value and return on your investment later.

Thou Shalt Download the Right Apps Before the Auction

My new friend showed me how to use Wine-Searcher to check prices on the fly.

Yes — you should do your research before you go, but this neat little app lets you type in any wine name and call up all the places it’s for sale in the United States along with the price. You would be surprised at the range. This is info you should know before you raise your paddle.

Thou Shalt Only Raise Thy Paddle If Thou Art Serious About Buying

This is an important point: If the auctioneer sees the paddle move, that can be interpreted as a bid. Bids are legally binding. And the auction process goes lightning fast… You can accidentally bid if you’re waving that thing around.

My paddle remained firmly on the table. I almost bid on some Champagne, but decided against it. I look forward to exercising my paddle at the next auction.

wine-chart

This chart shows five of the top recent wine auction prices. Not bad for a bottle of grape juice…

Thou Shalt Calculate Total Price Before Raising Thy Paddle

Let’s say an item you want to buy comes up… Before you bid, you must be absolutely certain you know what the auction house fees are in addition to the wine price.

I cannot emphasize this enough.

For example, Acker charges a 25% buyer premium. So that $1,000 case of wine will cost you $1,250 to get out the door. What looks like a good deal at bid might not be with all the added fees. If you don’t know, ask. And be clear before you bid.

Thou Shalt Not Be Pressured Into Buying

I won’t lie to you — an auction is heady once the bidding gets going. You will want to participate, badly. Between the speed and the tension, the energy in the room is electric.

Two guys at my table were egging me on to buy the Champagne I liked. I almost succumbed to their prodding, which wouldn’t have been in my best interest.

You must be prepared to resist temptation. That’s why having a plan is so important. I only planned to watch and I’m glad that’s what I did.

Thou Shalt Bring a Bottle to Share at Thy Table

When it’s “suggested” to bring a bottle of your own to share, that means it’s not mandatory — as in you won’t be refused admission for coming empty-handed. However, I highly recommend you bring something. Everyone at my table greatly appreciated the bottle I brought.

Thou Shalt Make Friends

Wine investing is an extremely social activity. Don’t be nervous if you don’t know anyone. When in doubt, ask questions. People love to share their knowledge.

Thou Shalt Have Fun

This is an investment people do partly for the sheer pleasure of it. It’s not all business, so take the time to enjoy yourself. Savor the experience, the wine, the company — everything.

And finally, once the bidding is over, feel free to partake.

To your wealth,

Steffi Baker

Steffi Baker
Editor-at-large, Unconventional Wealth

P.S. Ever been to a wine auction? Ever purchase anything drunk? Or make a killing by being the only sober one in the group? Send us your stories at feedback@unconventionalwealth.com.

Steffi Baker

Steffi Baker is the editor-at-large of Unconventional Wealth. For the past 10 years, she worked with a small strategy consulting firm that dealt exclusively with wealth-management companies, helping them market themselves to ultra-high-net-worth clients.

Through this line of work, Steffi attended events in London and New York and hobnobbed with household names and international...

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