An auction bid website is a site that carry out auctions through online means. The auctions come in different single ways or even a combination of multiple auctions. The internet propels the reach and scope of those auctions to higher levels which the initial purveyors anticipate. This is primarily because the auction bid website remove the physical traditional auctions limitations to reach a broader market.
Discussed below are the common types of auction bid website:
- English auctions
In English auctions, bids are announced by either the bidders or the auctioneer in charge. These auctions are assumed to be the most popular used third-party auctions done online. Here, the standard operational method is that bids are open for all the participants to see. The participant who gets the highest bid wins the race. The popularity of this method is based on the fact that it uses a familiar intuitive and thus the transaction costs are lower.
- Dutch auctions
This is the opposite of English auctions. In Dutch auctions, prices usually start at very high points. The prices, however, continue to get lower as the participants continue to bid. The prices for Dutch auctions, therefore, descend until they reach a level where the bidder can purchase. This is not the best bidding type for impatient buyers.
- The first price sealed bid
This is an internet auction method where the highest bidder goes home with the item. The main difference between this bidding method and the English bids is that the bids are not viewed or announced public like in English bids. In first price sealed bid, no bidder knows what the other bidder has placed for sale. From a game theoretic view, this bid auction method is similar to the Dutch auction; where on both cases players use similar bidding strategies.
- Reverse auction
In reverse auction bid website, the roles of the sellers and the buyer are reversed. Many sellers compete to acquire the buyers business, and this typically means that the prices keep on going down. Reverse auctions are predominantly used in the procurement business context. The auctions bring the buyers and sellers together in a transparent market. The method follows a similar price reduction as the unique bid auctions; only that the lowest unique bid wins the auction.
- Bidding fee auction
Commonly known as the penny auction, a bidding fee internet auction requires the participants to pay for the bids. The buyers increase the auctions prices for one unit currency at a time. The bidding fee auction method is not used in many auction bid website and has also been criticized for being similar to gambling. This is because the bidders can sometimes spend large sums of money without receiving any product in return.
As you can see, auction bid website has advanced. We now have many methods of auctions. The number of reliable auction businesses such as Prime Auctions has also increased. With the variety, bidders can now comfortably choose the technique which they are comfortable with, as well as the auction house of their choice. One should, however, make sure that they know the way preferred by your specific internet auction before bidding.