Primary Types of Auctions Reference Tool
By now, we here in the west know about auctions. With Ebay hitting the scene a decade ago, it has opened up our minds and pocket books to the great excitement and savings involved in auctions. Ah, but there are many different types of auctions here in North America, so don’t expect every auction that you attend to be similar to the last. There are several primary types of auctions which you may find yourself attending. The following is a quick tutorial of the types of primary auctions and the subtle differences between them. Use this as a reference tool before you head out to the auction. Remember, depending on what you are looking to bid on, there is a type of auction for you.
Primary auction types
English Auctions- Also known as an ‘open ascending price auction” this is the most typical type of auction here in the west. Open bidding is performed, auctioneers announce prices and bidders call out bids. This type of auction ends when no bidder is willing to go higher in price. This auction is typically used for selling goods, such as antiques or art work, but also includes second hand goods and real estate.
Dutch Auctions- Also known as ‘open descending price auction’ a reverse of English auctions. The auctioneer begins at the highest price and works his way down.Usually reserved for perishable products, this is the most common way for auctioning tulips, as well as perishable products like fish and tobacco.
Sealed First Price Auctions- In this type, all bidders simutaneously submit sealed bids so no other bidder knows of the other. Highest bidder wins. Only one bid can be submitted per person. This is a tricky one for anyone trying to get the best bid in without over shooting the amount. These auctions are usually used for tendering of governmental contracts and mining leases.
Vickery Auctions- Also known as Sealed-Bid Second Price Auctions, it is the same as the sealed first price auction except the bidder pays the second highest bid rather than their own. It is similar to proxy bidding on ebay, where the winner pays the second highest bid plus a bidding increment percentage.
Online Timeshift Auctions- These auctions provide more accurate information about the interest in the auctioned item. These are all fixed time auctions, such as on Ebay. Once the fixed time is reached the item will be sold to the highest bidder. To get a better understanding of how this type of auction works, watch some items on Ebay.
Muti-unit Auctions- Also known as Uniform Price Auctions or Discriminatory Price Auctions. These auctions sell more than one identical item at a time, rather than separate auctions for each. Could get out of hand very quickly, these auctions are reserved for farming equipment, computers and software, or like products sold in multiple lots. Do your homework before you get there in order to not get overwhelmed by the amount of items up for bid.
With this information in hand and mind, you will be able to research the type of auction you should be attending depending on the items you are looking to bid on. Also, this reference will help you have a better understanding of how you will be expected to bid on the many types of items. Now that you’re better informed, you can get out there and start your bidding without confusion or even worse, loss of an eagerly wanted bid. Good luck and good bidding.