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Our reverse auction is unique in that the starting bid price and purchase price are guaranteed to be below appraised market value. The value to the buyer will continue to grow during the course of the auction since each bid acts to reduce the final purchase price.
The auction will end at the first to occur: 1) no participant is willing to bid further, at which point the last bidder pays the current price of the item, 2) If during the course of bidding the price of the item has been reduced to zero, the bidder that submitted the final bid wins the auction, or 3) a Buy It Now (BIN) option occurred and was exercised at the current offered price.
Another compelling feature of our reverse auction, is that if you are not the winning bidder, all or a portion of your bids used during the auction can be redeemed and refunded to your account. The risk is low, and the reward is high. Also, the auction process is quick and efficient, so you won't be wasting your money, or your time on our site
Reverse
Auction (Dutch)
Typically, when people think of an auction, they think of a number of bidders all competing and raising the price until one
person wins and ends up paying the highest bid. The reality is that this is
just one type of auction. Dutch auctions are another variation on what is
considered a traditional auction. These Dutch auctions are so-named because they
have been used for centuries in Holland as ways for produce and flower vendors
to sell their goods. In more recent times, sellers of fish, credit, and a wide
variety of other items have used this auction version to sell their products.
In a Dutch auction, a seller offers up an item for bid at a very high price.
The initial price is much higher than the item's value usually and no seller
expects to get that price for the item. Because bidders must know the amount of
the bids, bids are not sealed as they are in some types of auctions. The price
is lowered in increments until a bidder chooses to accept the current price. He
pays that price for the item as the winner. For example, if a business is
auctioning off a used company car, the bidding may start at $15,000. The
bidders will wait as the price is lowered to $14,000 to $13,000 to $12,000 to
$11,000 and to $10,000. When the bidding reaches $10,000, Bidder A decided to
accept that price and he because he is the first bidder to do so, he is
considered the winner and has to pay $10,000 for the automobile.
While the above example may make it seem like the seller could be losing money
in a Dutch auction, the reality is that they generally make more than they
would with a more traditional ascending-price auction. With an ascending-price
auction, the bidders do raise the price but rarely will they raise above the
item's actual value. They have no reason to act fast because they know exactly
when the auction will end, and they can always sneak in at the last second with
a slightly higher bid. In a Dutch auction, however, bidders must act fast
because they have no idea when the auction may be over. So even though the
price is being lowered instead of increased, bidders will end up paying at or
even above the item's value.
Depending on what individuals have to sell and how much money they hope to earn
as a result of a successful auction, Dutch auctions can be an ideal alternative
to more traditionally used approaches. The descending-price structure of these
auctions increases competition among bidders and makes acting fast a necessity.
English
Auction
Most people who have ever attended or taken part in an
auction have experience with English auctions. For those in the United States,
these are the most common types of auctions and are generally the type that
third-party auction sites most often use. While this type of auction may seem
to be the most simplistic, it can be more complicated and may not always be the
best choice for sellers.
In an English auction, an item is placed up for bid and the seller generally
sets a reserve price. The reserve price is the minimum selling price for the
item and is generally not known to bidders. That does not mean that bidding
will begin at the reserve price. Sometimes these auctions begin below the
reserve price and if that reserve price is not met, then the item is not sold
and the transaction is not completed.
After the reserve price is set, bidding begins at a price determined by the
seller and increases in previously specified increments. With online auctions,
either the seller or the auction site will set the length of time the auction
will last. When the auction ends, the highest bidder is named the winner (if
his bid is higher than the reserve price) and he pays his the price he bid. For
example, a seller may have a used computer up for auction. He may set the
reserve price at $100 and may start bidding at $50. Additionally, he decided to
raise bids in $5 increments and to allow the auction to go on for 14 days.
Bidder A bids $100, Bidder B bids $105, and Bidder C bids $150. Bidder A then
places a second bid for $160 followed by a second bid from Bidder B for $175.
When the bidding ends fourteen days later, Bidder B is the winner and he pays
$175 for the used computer.
English online auctions can also be further complicated by sniping and by proxy
bidding. Sniping is the practice of waiting until an auction is almost over and
placing a higher bid. Generally, snipers have been watching the auction for a
number of days but refrain from placing a bid because they do not want to drive
up the price by expressing interest. Proxy bidding (Auto Bid) is the ability to set a
maximum bid amount in order to continue bidding even when not present or taking
an active part in the auction. For instance, Bidder A may place a maximum bid
of $125 and a current bid of $100. Technically, this Bidder A has bid $100. If
another Bidder B places a bid of $115, then the Bidder A remains the high bidder
but he his actual bid would go up to $120. If Bidder B placed a bid for $130,
then Bidder A would be outbid and would have to place a new bid in order to
continue participating in the auction. Sniping and proxy bidding add in the
need for further strategy. Bidders who get into the auction early must try to
determine the maximum price the item will reach and must keep in mind the
possibility of losing out to a last minute sniper.
Besides these complications, English auctions are not always the best bet for
sellers. The price for the item is usually increasing in small increments and
the bidding is open so that everyone involved can see the current bids (not the
maximum proxy bids, which are kept sealed). Consequently, bidders generally try
to work hard to keep the prices lower so that they can purchase the item below
its value. When this happens, the seller ends up earning less on the item than
they may have realized if another type of auction logic was employed.
On the other hand, English auctions have often caused bidders to become overly
enthused by the activities and to bid even more than the value of the item.
Paying more for an item than its value is known as the Winner's Curse. The
bidder’s desire to win the auction and/or to beat the competition is such a
motivating factor in these instances that many bidders do go far beyond an
item's value. The end result, of course, is a greater profit for the seller.
However, sellers do not always benefit from the Winner's Curse and other
related phenomenon. In many cases they can receive better results by opting for
a traditional Dutch auction, which uses a descending-price structure along with
open bidding.
Seated Auction
To
participate in a seated auction an individual must buy/reserve a seat. Seated
auctions are configured to contain a number of chairs or seats set out by the
Auctioneer. Limiting the number of available seats increases the
possibility of winning the auction for the participant.
A
seat is purchased by using existing bids or credits you have in your
account or, in some cases, using cash (credit card). Purchased seat
reservations are non-refundable
The auction may
start automatically when all the seats are filled or it may start at
a specified time.
Auction
Strategies
Auctions are not much different than most areas of
business: strategy is critical for success. In the case of all types of
auctions – Reverse, Dutch, English, etc. -- both bidders and sellers need to
have a firm concept of their strategy if they hope to have the auction go in
their favor. Sellers want to select a strategy that will allow them to get the
maximum price for their item while bidders want to select a strategy that will
allow them to be the winner but at a price that is under their perceived value
of the product. Even though it may not seem like it, both bidders and sellers
can simultaneously apply their strategies successfully.
Understanding and determining appropriate strategies for bidders and sellers
for all of the auction types has been the work of economists for many years. In
fact, economists use something called game theory to help them understand these
concepts. Game theory is an area of mathematics that looks at interactions
between independent and intelligent agents as they make choices that affect the
outcome of their interactions. Using game theory, economists were able to
determine some primary strategies for bidders and sellers to use for online and
brick and mortar auctions.
In order to understand these strategies, one must first understand the idea of
valuation when it comes to auctions. Generally, two types of bidders
participate in auctions. One type of bidder wants to win the item for the
bidder’s own use. In these cases, the person sets a specific private valuation
on the item, which means essentially how much winning the item is worth to
them. The second type of bidder wants to purchase the items in order to resell
them and to earn a profit. These types of bidders have an estimated common
value for the item. The common value is basically how much the average person
would think the item is worth. Even bidders who have a private value for an
item can be influenced by common value, particularly external standards of
value. For example, if a seller is auctioning off a diamond ring, the bidder may
have a specific private value on that ring but if that bidder sees an appraisal
of how much the ring is worth that information may cause his concept of the
ring's value either to increase or decrease.
As the example above indicates, sellers can often benefit from revealing more
information to bidders. The more that is known about an item, the higher the
common value generally goes. Additionally, the consensus among most auction
bidders is that any information that is not revealed is being deliberately
concealed because it will have a negative impact on the auction results. Sellers
must also be strategic about the type of auction they select. Private values
alone do not affect the amount a bidder is willing to pay for an item, so for
those bidders there is no difference between the types of auctions. When common
value is figured into the formula, however, English auctions generally bring in
the highest revenues according to economists because of the competition. Of
course, auction strategy is not that simple for the seller who must also factor
in whether the bidders will be risk averse or risk neutral.
For bidders, other strategies must be taken into consideration. Regardless of
the type of auction they are participating in, bidders must determine their
maximum value for the item. If they do not, then they are guaranteed to fall victim
to the Winner's Curse, which occurs when a buyer pays more for an item than
what it is worth. Once they know that maximum value, they must bid slowly and
cautiously. Beginning with a high bid does not ensure success, but it does
ensure that the price for the item will be driven up even further and may
quickly become unaffordable for the initial bidder. The reason for this
behavior is that high bids give other bidders the impression that the common
value for the object is possibly more than they might have imagined. As a
result, they are willing to spend more. Slow increases in the bidding keep the
prices lower. Then, when the bidder reaches his highest value, he should stop bidding. Regardless of their role in the auction, all participants must understand the
rules of the specific auction or their strategies simply won't work.
Reserve Price
Reserve Price means the unpublished minimum price set by the Seller for an item or property that must be satisfied before the auction can close. The Seller may or may not choose to disclose the Reserve Price on the item or property description page. Even if the Reserve Price is met, the auction may continue until a random Buy It Now price is also met for the item or property.
Extended Time
Extended Time or Repeat Timer is the number of seconds that the system will auto repeat as long as there are bidders. This timer will quit after all time expired and there is only one bidder left (highest bidder is the winner). Each auction has a small round white circle with an "s" after it. This is the number of extended seconds that will be applicable to that auction.
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