Many people know the terms “auction”, “bid”, “bidding”, “bidder”, “highest bidder”, “winning bidder”, and of course the best word “sold”. But did you know that there are different types of auctions? You may have been auctioning in one kind of auctions or you may not even know it, but playing in another kind. No wonder things are getting confusing from time to time.
The different kinds of auctions have their own rules—they have their own system that they follow. Almost all of the auctions are set up to be able to raise funds. This event involves selling items at the same price which includes a competition between the bidders. Here are some (five) types of auctions:
1. Absolute Auction
Also called auction without reserve. That is because there is no minimum bid. The auctioneer gives the item to the winning bidder, the one who bid the highest no matter the price. This auction type is able to attract more buyers, which means they are sure the item will be sold. A disadvantage, however, is that there is a safety net for the seller of the item.
2. Minimum-Bid Auction
Also called a minimum published bid auction. In this one, there is already a predetermined acceptable price—the lowest price that is acceptable to start the bidding. The minimum price is then blasted out in all marketing materials. This type of auction is good for when an item that has yet to be sold has become weary. The advantages of this are that the seller already allows the buyers to know the price they are willing to sell it for, and that there is a safety net for the seller. However, an inexperienced auctioneer may sell the item at a higher price and bidders would not be willing to buy it.
3. Reserve Auction
For this auction, the seller has the right to whether they will accept or reject the highest bid. The advantage of this is that there is a safety net for the seller. On the other hand, some buyers would not want to even try bidding knowing that there is only a 50/50 chance of being considered.
4. Sealed Bid Auction
The biddings in this type of auctions are kept confidential. They are given to the seller and can be opened a rant time, allowing them to predetermine the bid. The advantage of this is that other bidders do not have to compete with strong personality bidders in public. But at the same time, buyers could question the legitimacy of competing with others.
5. Multi-Parcel Auction
This auction type is best for selling small parcels that were one large parcel. The bidders are allowed to bid just one parcel or a combination. The advantage would be that buyers can only buy the parcel they want or a collection. While the disadvantage is that those who want to complete the set have to wait until the end.
There are many types of auctions but those are the most common. If you ever decide to bid online for industrial equipment, Hilco APAC is the one for you. You will be assured of the quality and your money with be worth it.