Auctions are a way of purchasing or selling goods or services. In a sense, auctions are a way of life in America and are something that can be enjoyed by thousands of people every month. You may be one of many who enjoy sharing the special bargain items you purchased at an auction with your family and friends. Here is a guide to the more popular types of auctions and how they work.
The English auction is the most well-known type of auction, and it is also called an open ascending bid auction. An item is put up for sale and if you like it, you can begin to bid openly against others who would also like to buy it. In a sense, it becomes a competition between you and the others to see who will obtain the item in the end.
The sale item goes to the highest bidder, and bidding stops when no one else increases the bid. If the owner has set a minimum price for the sale item, it will not be sold unless the participants are willing to go that high in their bidding. If they aren't, then the seller will take the item home.
First price sealed bid auction
This type of auction is a silent auction, because no one says anything. You will be shown the item to be auctioned, and then everyone who is interested in purchasing the object will write their bid on a piece of paper and hand it to the auctioneer. The bids will then be opened, and the person who submitted the highest bid will win the item and pay the price he submitted.
Second price sealed bid auction
This auction is very similar to the first price sealed bid auction. You will again write down your bid on a piece of paper and give it to the auctioneer. If your bid is the highest, you win the item, but you only pay the price of the second highest bidder. This type of auction is often more fun, because you never know how much you will actually pay for the item, and it will always be less than you bid.
In a buyout auction, there is a price set before the auction begins that is called the "buyout" price. This price can be temporary or permanent. If it is temporary, you must buy the item for that price before the bidding begins. If you don't, the "buyout" price is no longer available to any of the bidders.
If the "buyout" price is permanent, you can use it at any moment during the auction. This can be one of the most fun and most interesting types of auctions. For example, if there is a lot of bidding on an item and you really want it, or if you think the item is going to go higher than the "buyout" price, you can tell the auctioneer you want it for the "buyout" price and it becomes yours immediately.
Have you ever wanted to go to an auction? Are you unsure about how they work?
Auction previews are a great opportunity to handle the merchandise, count your pennies and strategize. Don't let a moment go to waste.