Different Types of Auctions
When most people think about auctions, they often think of live auctions. This is the type of auction where everyone is standing, gathered together, bidding against each other until the auctioneer slams the gavel and declares the winner. This isn’t the way all auctions are. Some auctions have a time limit, some are silent, and some are online. There are several types of auctions. All types of auctions present buyers and sellers with a unique opportunity to buy/sell stuff for a fair price. At auctions, regardless of the type, the price of the item is going to be what the buyers are willing to pay, not a penny more or a penny less. This shows us what the market is willing to pay for an item. That is why the good folks on the show “Pawn Stars” always inquire what the most recent selling price for a particular item was at auction. Auctions are always a good way to get a fair value for both the buyer and the seller. Especially considering the seller can set a minimum price for the item, and below this price, the item or property will not be sold. This is called setting a reserve. This is a good tactic for sellers if they don’t want to sell their items for less than a certain amount.
These various auction types (silent auctions, online auctions, live auctions, etc) are used at different times. Auction companies decide which structure is the best depending on the characteristics of the bidders and the nature of the items that are selected for auction. One auction structure may be more efficient and more profitable to the seller than others. That is why it is essential to hire a good company, like ours, to evaluate which type of auction will benefit everyone the most.
Let’s take an in depth look at some of the auction types:
Live auctions are a type of auction that is in-person and hands on. Everything takes place live and the auctioneers are present ready to auction off selected items. In a live auction, bidders gather in a specific location to bid for the different items available. Live auctions involve announcing the highest bid and continuing until there is no more bids within a reasonable time limit. Bidders can bid again until the highest bidder is announced and the item is “SOLD”. In live auctions like this, the different items from donors are displayed in lot numbers. Each number represents a certain item. These items can include goods, services, or any other items. The bidders are informed of all the information of every item. The auctioneer goes over its description, condition, appraised value, donor, lot numbers, etc. This information varies between item to item. Bidders are also given a number to use during the bidding process. The auctioneer will pick each of the lot numbers systematically and announce it starting with the lowest bid. The bidders who are interested will then hold up the paddle and bid for the item. After announcing a 1-2-3 countdown, the item will be given to the highest bidder.
Silent auctions are basically an event where items that are for sale are organized for bidders to assess, place bids on and purchase. But in a silent auction, there is no auctioneer present and participants place their bids silently and anonymously. They use a bid sheet and use a bid number for the guests where they can write down their bids. They can write down the highest amount they are willing to pay for each item they are interested in. As bidders have their own bid sheets, they don’t know the bids of other guests. Guests can bid on as many items as they want. Once the auction is closed, the item goes to the bidder who has placed the highest bid. These types of silent auctions are sometimes organized by charities as a way to raise money. A silent auction can be more orderly and gentle than a live auction where a room of bidders and auctioneers yell out bids on auction items.
Online auctions are held… you guessed it, online! Some companies host their online auctions on their website, some have an app, and some companies use third party websites. Just like auctions in general, online auctions also have different types of auctions. Some online auction types include: ascending English auctions, descending Dutch auctions, first-price sealed-bid, vickrey auctions and many more. Online auctions have already made it to where people can check out goods, buy, sell, and trade without having to leave their house. These online marketplaces are very effective. These were especially effective during the Corona virus pandemic.
Regardless of the type, auctions are awesome! They are all good options for liquidating property but some types can be used to achieve better results in certain circumstances. It is fun to learn about all of the different types of auctions and ponder how different each of them are. They are so much fun in different ways. If you are a buyer and you want to have an amazing time out with your son you may want to go to a live auction. If you want to relax and enjoy yourself on a cold and snowy day then an online auction may suit you well. It all depends on the circumstances of both the buyer and the seller that shapes which type of auction is utilized. There are a lot of choices for what type of auction to host or attend! Auctions are a very important and amazing part of selling and buying across the world.
If you need to liquidate your belongings please keep Busy Beever Auctions and Estate Sales in mind. We have some of the best auctioneers in Kansas and Missouri. Our staff is ready to help!
Fun Fact: During auctions there is a time to preview the items before bidding begins. This inspection period allows buyers to evaluate various lots, compare grades and qualities, and come up with a reasonable offer for what they are interested in.