Types of Auctions
Ardis Myles
Auction sales are traditional ways for sellers to find buyers, and for buyers to find 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.
At an auction, groups of buyers bid on items offered for sale. An item is presented for sale and the bidding begins, sometimes at a set minimum amount. The selling price gradually rises as buyers increase their bid amounts and when the gavel drops, the highest bidder is declared winner of that item. Another item is then placed on the auction block, and the action starts over again. Auctions can be good ways to determine the true value of certain items, especially if collectors are involved. When people really want an item they're willing to pay the full 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 Auctions: Bargain hunters get an even bigger bargain at a vickey auction. The person who bids the highest amount will win the item, but is only required to pay the second highest bid 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 are perfect venues for buyers to find all sorts of affordable treasures. Antiques, artwork, cars, collectibles, real estate and countless other types of new and used commodities are put on the block and sold to the highest bidder. With crowds of interested buyers flocking to these types of sales, the auction action can quickly escalate. When more than one buyer is determined to win the prize, competition can be fast and furious. In the end, the final sale price can easily exceed the actual value of the item.
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.
Most American auctioneers are licensed by their state, following a series of oral and written examinations. Auctioneers must be reliable, with proven integrity and a good reputation. Running an auction is a big job that involves publicizing the event and resolving any disputes or conflicts that may arise during the sale.
When you're tired of mall walking, and rummage sales prove to be little more than rubbish sales, try scratching your bargain-hunting itch at an auction sale. It's an exciting experience, and you're bound to find a great deal on just about anything you're looking for.
Contributor Ardis Myles provides material for numerous web magazines, on http://sowbelly.com/ home business idea and http://drivers.biz) drivers subjects. This article is available as a http://www.uberarticles.com/?id=15932&b=79 unique content article with free reprint rights.
|
