Types of Auctions

Posted on May 25, 2008
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by Ardis Myles

Looking for a really unique item? Want it at a really good price? Search out an auction sale and start bidding for bargains.

Auctions come in all types, from rural auctions featuring livestock and equipment, to free-wheeling automotive auctions where the rich and famous bid on rare and classic cars, to Internet auctions where bargain hunters can shop right at home. Every type of auction is fun and exciting, whether you’re an active bidder or a quiet spectator.

The basic premise of an auction is to have a group of buyers bidding on sale items. Each item is presented for sale and the bidding begins, often with a set minimum amount. Gradually, the selling price goes up as potential buyers increase their bid amounts. When the gavel drops, the highest bidder is declared “winner” of that item. Then, another item is placed on the auction block and the action begins again. An auction sale can be a good way of determining the true value of certain items, especially when collectors are involved. People who really want particular items are willing to pay a top price that reflects the value.

There are many types of auctions, and the basic premise is the same. There are, however, specific rules and regulations in place for each type of auction:

* English Auction: This is the granddaddy of all auction sales. It’s the basic style of bidders going up against each other in an open forum. The person who bids the highest amount gets the item.

* Dutch Auction: Basically opposite of the English auction, a Dutch auction begins with the auctioneer offering the item at premium price, and then lowering his offer in increments until someone agrees to pay that amount. This is almost a game of chance, as buyers will jump in and pay a little more for fear of losing the item at the next lower price to someone else. Dutch auctions are practical ways to auction items quickly, as it only takes one bid to end the sale.

* The Sealed First Price Auction: With this type of auction, all bids are made simultaneously. However, no one knows how much other participants have bid. Of course, the person who bids the highest amount will get the item at his or her suggested price.

* Vickey Auction: In a vickey auction, a bargain hunter gets a little more of a bargain. The person who bids the highest price wins the item, but only has to pay the second highest amount.

* Buy-out Auction: Similar to an English auction, a buy-out features items offered for sale at predetermined prices to anyone who wishes to pay full price. These are also referred to as “buy now” prices. If no one in the group wants the item at full price, bidding will begin and the highest bidder wins the auction.

* Open Outcry Auction: This is the kind of auction most often seen at commodities and stock markets. At an open outcry auction, trading happens simultaneously in all corners of the arena. With the advent of the Internet and modern communications technology, these auctions are being replaced by electronic trading platforms that operate over the worldwide web.

Auction sales can offer buyers a quick and easy avenue to pick up all kinds of items. Collectibles, real estate, antiques, cars, artwork and countless other commodities, both new and used, are put on the block and available to the highest bidder. These types of sales draw crowds of interested buyers, and the auction action can quickly heat up when more than one buyer is determined to win the prize. The competition can be fierce, and final sale prices can easily exceed the actual values.

Most auctions are led by qualified auctioneers who are hired for a flat fee or a predetermined percentage of the proceeds. These professionals can provide information about the community and its buying preferences, as well as hints on obtaining the highest price for one’s property.

In the United States, most auctioneers are licensed by the state after completing a series of oral and written examinations. Auctioneers must be reliable, practice integrity and have a good reputation. In addition to leading the sale, auctioneers are also responsible for publicizing the events and resolving disputes or conflicts that may arise during the sale.

If you get tired of mall walking, and find that rummage sales are little more than rubbish sales, scratch your bargain-hunting itch at an auction sale. It’s an exciting experience, and you can bag a real bargain on just about anything you’re looking for.

About the Author:
Freelancer Ardis Myles enjoys writing articles for several popular Internet sites, on home business idea and device drivers topics.

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