Online auctions and their types
With the process of digitalization, auctions have become more and more popular and easy to access. Sites like eBay and Yahoo make it possible for everyone to create an online auction or bid in one. Most popular bidding sites use the more traditional online auction format, though there are still some other online auction options that leverage the competitive nature of buyers.
What are the types of online auctions?
Depending on the types of items being auctioned and bidders, you can choose the following options:
- English auction
- Dutch auction
- Reverse auction
- First-price sealed-bid auction
- Penny auction
This is the most traditional and widespread type of auctions on the Internet. A sale item is put up for auction with a previously specified minimum bid, and potential buyers bid until no one wants to offer a higher bid. The winner is a person who offers the highest bid. This is the format that is used by eBay, Yahoo Japan Auctions and many other popular online auctioning platforms.
Dutch auctions are the reverse form of English auctions. Items are original auctioned at a high price, and the price is gradually reduced until a bidder agrees with the price and offers to buy an item.
A reverse auction takes place when a buyer requests a certain good or services and sellers bid for the right to make the sale. This type of auctions is quite common among business-to-business online transactions.
First-price sealed-bid auctions
In case of first-price sealed-bid auctions, bidders submit a single, sealed bid to the auctioneer, who then chooses the highest bid. The participants do not receive any information about other bidders.
This type of auctions may be held only online where a bidder buys the right to participate in the auction before it begins. So, participant purchases a certain number of bids prior to entering the auction.
With the rapidly developing e-commerce market, online auctions and online auction sites should not be overlooked, as they are a great way to make sure that buyers pay a fair price for a service as well as generate excitement around a product.