Brief Introduction to Auctioning
Auction is a process wherein the product or services offered are bought by offering them up for bidding, taking bids and eventually, selling them to the highest bidder. Rules may differ from auction to auction. From time limits to the maximum and minimum price for bids.
Did you know where bidding started? Auctioning started in Babylon in 500 B.C. Auctioning for marriage was held annually. The women were auctioned from the most beautiful to the least.
There are four primary types of auctions. We have the English auction, Dutch auction, sealed first-price auction and the Vickrey auction.
- English auction is the probably the most common type of auction used today. The English auction is also called the open ascending price auction. It is where participants bid openly against other bidders, with the next bid must be higher than that of the previous bidder. The auction will end if no other participant will bid higher than the previous bidder. If the seller has set a minimum price or what is called a reserve price an no bids go further than the reserve price, then the item will be considered unsold.
- The Dutch auction is also known as the open descending price auction. It is somewhat similar with the English auction but instead of starting with the lower price, the auction starts with a high asking price which will then be lowered until a participant will accept the auctioneer’s asking price.
- In sealed first-price bid auction, all participants will simultaneously submit their sealed bids to the auctioneer. The highest bid will pay the price that they have submitted.
- Vickery auction is similar with the sealed first-price bid auction. The only difference is that the winning bidder will pay the second highest bid rather than his bid.
There are also secondary types of auctions. We have the all-pay auction, Buyout auction, combinatorial auction, No reserve auction, Reserve auction, reverse auction, Silent auction and the Walsarian auction. You may be familiar with some of these types but we will take up how these types of auctions are done.
All-pay auction is where participants will have to pay their bids whether they will win or not. Buy-out auction is an auction with a fixed price, the buy-out price. At anytime during the auction, a participant may opt to accept the buy-out price thus ending the auction. If at one point no one will utilize the buy-out option, then the highest bidder will win the auction. On combinatorial auction, the bid is done for a combination of two or more items instead of just bidding for one item. Being the highest bidder doesn’t guarantee a win. The winner will be based on his collective bid on several items. The No-reserve auction is an auction where there is no reserved price. The item will be sold regardless of what the highest bid may be. Reserve auction on the other hand, the item may not be sold to the highest bidder if the highest bid does not satisfy the seller’s reserve price. The seller’s reserve price may or may not be disclosed to the participants. In reverse auction, the role of the bidder and the seller is reversed. Sellers will compete to make a lower bid until no supplier will make a lower bid. In silent auction, the bids are written on a piece of paper and then placed near the item. The highest bidder will win the item. The Walsarian auction is an auction in which the auctioneer takes bids from both buyers and sellers for their goods.
Now, Because of the Internet, auctioning has broadened its reach. An item can now be sold without boundaries. Almost all online auctions use the English auction method.
Not only is it readily accessible, it is very popular nowadays. Online auctioning offers different items up for different people. You can expect to find antique items to apparels.
There are site that offer wide arrays of items while some sites offer specialized items only. An example of this specialized site is online jewelry auctions. These sites will offer wide varieties of jewelries to bidders to choose from. online jewelry auctions are the best option when buying jewelry at wholesale prices. These sites offer participants from rings, bracelets, pendants and charms to necklaces.
If you know what you want, you must know what you want. Visit jewelry stores near you. Examine the prices and also check the internet if there are similar characteristics of that item you would like. Knowing the price of your item beforehand gives you an idea of how much you should be bidding. Being practical and knowledgeable helps you get a bargain price for the items compared to these items sold at stores.
You might still be hesitant at first in joining online auctions, which is normal. But if you do decide to join in bidding, be sure to know what you want and at what price you are willing to bid. Every item up for bidding will naturally attract potential buyers. So if you intend to win, consider your factors in bidding for it so that you will get a bargain price.
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Filed under Jewelry supply