What does Auction mean?
An Auction Process is a system used to buy or sell goods and services by offering them for bidding. Bidding means allowing people to sell the item.
The bidders in an auction are completely against each other, with each subsequent bid being higher than the previous one. When an item is placed for sale in the auction, the auctioneer will start at a relatively low price to attract a huge number of bidders.
The price of the item placed for bid increases whenever someone makes a new high bid. Finally, no more bidders take the item. The auction is considered to be complete when the vendor of a specific item accepts the highest bid offered in the auction. And the buyer pays for the item or service and takes possession of them.
The Prospective buyers usually translate to competitive bidding which pushes the price higher, that enables the bank to maximize its profit from the sale. In Contrast, most buyers prefer proprietary sales over auctions because they can usually exercise more control over their purchased price.
History of the Auctions:
The Centre’s origin of the auction can be traced back to 500 B.C. in ancient Greece times when women were auctioned off for their marriage. In this period, it was illegal for women to get married without going through the process of auction.
The Auctioneer will start the scale with the woman who was considered to be the most beautiful of all other women that were being auctioned.
The Auction process always uses descending method for pricing, beginning with the highest price and going to the lower until the lowest bid was found. If the buyer is unable to get their new wife. They were allowed to get their money to recover.
In the US, the auction Process in the early stages was used to sell farm produce, estates, and slaves. In the American civil war, the soldiers returning from the war sold their plunders through auction. The business of auctioneering grew rapidly during the great depression when a lot of people become bankrupt. Therefore, they were forced to liquidate their all assets. The auction helped the individuals and businesses affected by the crises to sell their assets quickly.
Need of Qualified Auctioneers:
The need for qualified auctioneers elicits auctioneers Carey Jones to establish the very first auctioneering school in the early 1900s. the school was located in Davenport, Lowa, and was well known by the name of Carey Jones Nation School of Auctioneering.
With the growth of technology in the 1900s, the new auctioneers who has some knowledge started using computers, mobile phones, and fax machines which increases the efficiency of their trade. Even some of the auctioneers were so clever that they take photographs of their items and project them on a big screen. The purpose is to get the attention of potential buyers so they could get a clear view of the items which are on sale.
In the year 1995, the platform eBay launched the first online bidding site.
Online Auctions:
The online auction process becomes so popular with sellers because a huge number of potential bidders make it easier and safer for them to get a good price virtually for any item. On the other hand, the buyers get a wide range of products to choose from. They were being able to find about anything they are searching for to buy.
The Auction Process:
Before the Start of bidding on the auction, the buyers are mostly allowed to preview and check the items on sale and they can examine the condition of the product. The preview period for the auction may be announced on the evening before the day of the auction or a few hours before the auction starts.
Once the buyers are done viewing all the items available in the auction Process and they are interested in placing their bids. They must have to register themselves with the auctioneer.
Registration Process in Auction:
The registration process of the auction requires the buyer’s details which include their phone number, Email address, home address, and even their identification card or driving license number. in terms of a car auction the seller must have to bring an auction sheet of the car with them.
Each registered bidder in the auction house has its bidder card with the number that is used to identify all the participants.
The sound of the auction bell traditionally means the auction starts now. The Auctioneer gives a brief introduction about the item for sale and the bidders with a price that he/she considers as reasonable price.
The process ends when there are no more bids left, no one is rising the price of the bid, and the buyer making the highest bid gets the item. The highest bidder in the auction house takes ownership of the item right after paying its bid price.
Auction of a used Car:
An auction sheet report of used car is a document that provides detailed information about the car that is up for auction in Japan. The report contains information on the condition of the car, including any accident history, repairs made, and maintenance records. It also includes a grading system that rates the overall condition of the car, with higher grades indicating better condition.
Types of Auctions:
The following are main four types of Auctions are mentioned below:
The person William Vickrey modeled four types of auctions which are single-unit.
English Auction:
The English Auction is also well known as an open outcry auction and it is a commonly used type of auction today. The English auction is an open ascending price auction where participants bid against each other as rivals. With each subsequent, the bid continuously gets higher than the previous bid.
The auctioneer announces the price of the item, and the bidders call out for their bids until no other participant is willing to further take the bid higher. The auctioning of a single item process ends when the auctioneer accepts the highest final bid. This kind of auction is very commonly used for antiques, wine, and tobacco.
Dutch Auction:
The Dutch auction is an open descending price auction that is based on the bid order, where the first highest bidder picks items he wants or needs, and the process is followed by the second bidder. And on until the order has been exhausted so well. The Dutch auctions are used for the auction of Flowers, fish, and investment securities.
First-price Sealed-bid Auction:
In the first-price Sealed-bid auction which is also well known as a blind auction, all the bidders have to submit their bids. So, that no bidder gets to know the bid of other competitors.
If the bid of the buyer in the auction is the highest then the highest bidder takes ownership of the item. On the other hand, the seller auction bid, where the lowest bidder wins the right to sell his items and the product price accepted by the buyer. This auction is often used in government tenders, military procurement, and refinancing credit.
Second- price Sealed-bid auction:
The second price-sealed bid auction is much similar to the first one. Expect the highest bidder gets his bid item at the price of the second highest bidder. In this auction, the seller gets the lowest bidder and sells the item at the second lowest rate/bid. This kind of auction is used in automated contexts that include real-time bidding for online advertising.
