16
Oct
2018
0
Auction_Types

Auction Types

We all have one, really good idea of what an auction is. But the truth is, there are several different auction types. 

When you imagine it, there’s an auctioneer standing in front of a room, he’s probably auctioning off a piece of equipment and talking really fast. People flash cards, the price up. And it all stops when you hear, “going once, going twice — sold!” the price of the item is driven up by the audience participating in the auction.

That’s just one type of auction.There are plenty of different auctions but they’re all pretty similar. All of them involve bids and competing.

 

Major Auction Types

English Auction:

This is the auction we’re familiar with, it’s the most commonly used. In an English auction, the price ascends. This means that participants bid against each other and every bid has to be higher than the last.

There are a variety of ways that an English auction can be run. Some auctions have reserves, some don’t. Some English auctions have a starting bid some start at zero and some are online and some require auctioneers.

This type of auction is commonly used in antiques, artwork, cars and real estate.

Dutch Auction:

A Dutch Auction is the opposite of an English auction. The price descends until the participant reaches the amount they want to pay or until the reserve is met.

The Auctioneer start with a high asking price and drops it. The first to bid gets the item. Originally this form of auction was used to sell commodities like fish and meat but it can be found online to quickly sell home-goods and other non-perishable items.

Auction Variations

All of these common auctions are a variation on the Dutch or English auction.

Live Auction:

That’s the auction you were thinking of. A licensed auctioneer stands at the front of the room and calls out bidders. Their energy drives the auction and encourages competition. Live auctions can be either Dutch or English, but most are English style with the highest bid being the winner.

Silent Auction:

This is a variant of an English auction and typically used for charity events. There is no auctioneer, bids are written on a piece of paper and the auction closes at a predetermined time. The highest bidder wins the item.

Penny Auction:

A Penny Auction requires the participant to pay per bid. These are usually small dollar auctions and the items usually sell at lower than their value. These auctions are timed and in the English style so the highest bidder wins the item. Despite paying per bid, the winner must also pay the final bid price of the item and the seller will receive value from all of the bids placed.

Online Auction:

This is an auction that takes place exclusively online. Every online auction is different, some are variations of an English auction and some are variations of a Dutch Auction. At Auction Nation we predominantly run English style online auctions.

candlelight_auction
Candlelight Auction:

This is an old type of English auction that used to be used to auction off ships. Basically, the auctioneer lights a candle and whoever makes the highest bid before the candle goes out gets the ship. No one runs candlelight auctions auctions anymore but it would be cool.

No-reserve Auction:

This means that there is no minimum or maximum on the items in the auction. Everything sells for what it sells for. This form of English Auction is common in certain liquidations. This is the auction with the highest possibility of a bargain. However, depending on how much competition there is, a no-reserve auction also comes with the risk of items going for higher price than their value.

Mystery Auction:

These auctions have taken off on Ebay. The seller puts together a mystery box or pallet then auctions it off in an English Auction. The bidder might be able to get more information or a brief preview of the mystery container but in these auctions the bidder doesn’t know what they’re bidding on until they win it. Mystery auctions can be disappointing but they can also come with big wins.

Japanese Auction:

This auction is similar to an English auction with an ascending price, but more like a game. As soon as the bidding starts, no new bidders can join and every bidder but continue to bid or drop out. This means no one can swoop in at the last second, if you don’t bid — you don’t win.

Learn more about the specific types of auctions we host and how to bid with us.