Auctions are live events where various items, ranging from furniture to real estate, can be purchased through a bidding process. When the item is first presented at the auction, the auctioneer (person responsible for leading and managing the bidding process), will pitch a starting bid to the audience.
Once bidding begins, interested persons will offer competing bids until no one is willing to go any higher with their bid price. Once the auctioneer recognizes the final bid, that person will be declared the highest bidder. The auction concludes with the highest bidder paying for and claiming the item. A sizable number of potential buyers is usually desired, as this may result in the bids being driven up to higher values for an optimal sale.
Auctions have evolved over the years, but the basic guiding principles remain the same. The process can begin with a preview session where potential buyers are able to identify the items that interest them the most. Usually, there is a formal registration process to participate in the auction. Upon registering, each bidder will be given their bidding card, which will hold a specific identifier assigned to them during registration.
While most auctions are based on ascending bids, the so-called Dutch auctions go in the opposite direction. They start with a high asking price, which gets lower and lower until someone accepts the auctioneer’s offer and close the deal. In some cases, a Dutch auction will have a predefined limit price, which represents the minimum price possible for the product or service. This limit price is also referred to as reservation or reserve price.
Technological advances have helped to expand the landscape for auctions, as is evident with online bidding websites. These websites facilitate the offering and trading of items. Users can upload pictures of their products and other individuals are able to enter bids in an attempt to acquire the item. Just as with a regular, live auction, once the time period ends for the item on the website, the highest bidder is notified, so they can finalize payment and shipping arrangements.