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Article By: ArdisMyles
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Types of Auctions
Auction sales are traditional ways for sellers to find buyers, and for buyers to find bargains.
Auctions come in all types, from rural auctions featuring livestock and equipment, to free-wheeling automotive auctions where the rich and famous bid on rare and classic cars, to Internet auctions where bargain hunters can shop right at home. Every type of auction is fun and exciting, whether you're an active bidder or a quiet spectator.
At an auction, groups of buyers bid on items offered for sale. An item is presented for sale and the bidding begins, sometimes at a set minimum amount. The selling price gradually rises as buyers increase their bid amounts and when the gavel drops, the highest bidder is declared winner of that item. Another item is then placed on the auction block, and the action starts over again. Auctions can be good ways to determine the true value of certain items, especially if collectors are involved. When people really want an item they're willing to pay the full price that reflects the value.
This basic premise is true of all auction types. There are, however, certain variations, rules and regulations for each unique auction style:
* English Auctions: The granddaddy of all auction sales, this is the basic style that pits bidders against each other in an open forum. The item goes to the person who bids the highest amount.
* The Dutch Auction: Basically the opposite of an English auction, this kind of sale has the auctioneer offering each item at a premium price, and then lowering the price incrementally until someone agrees to pay that amount. It can be a stressful game of chance, causing buyers to jump in and pay too much, rather than lose the item to someone else at the next lower price. It only takes one bid to end the sale, so Dutch auctions can be practical ways to sell items quickly.
* Sealed First Price: Similar to a "silent" auction, this type of sale involves a simultaneous bidding by all potential buyers. However, no one knows the other participants' bid amounts. Whoever bids the highest amount gets the item at his or her suggested price.
* Vickey Auction: In a vickey auction, a bargain hunter gets a little more of a bargain. The person who bids the highest price wins the item, but only has to pay the second highest amount.
* Buy-out Auction: Similar to an English auction, a buy-out features items offered for sale at predetermined prices to anyone who wishes to pay full price. These are also referred to as "buy now" prices. If no one in the group wants the item at full price, bidding will begin and the highest bidder wins the auction.
* The Open Outcry Auction: This is the type of auction usually seen in the stock and commodities markets. An open outcry auction involves lively trading at every corner of the arena. With the ever-increasing popularity of the Internet and modern communications, this type of auction is being replaced by electronic trading platforms operating over the worldwide web.
Auction sales are perfect venues for buyers to find all sorts of affordable treasures. Antiques, artwork, cars, collectibles, real estate and countless other types of new and used commodities are put on the block and sold to the highest bidder. With crowds of interested buyers flocking to these types of sales, the auction action can quickly escalate. When more than one buyer is determined to win the prize, competition can be fast and furious. In the end, the final sale price can easily exceed the actual value of the item.
Qualified auctioneers are hired for a flat fee or a predetermined percentage of the proceeds. These professionals know about the community and its buying preferences, and can provide hints and advice to obtain the highest price for one's property.
In the United States, most auctioneers are licensed by the state after completing a series of oral and written examinations. Auctioneers must be reliable, practice integrity and have a good reputation. In addition to leading the sale, auctioneers are also responsible for publicizing the events and resolving disputes or conflicts that may arise during the sale.
When mall walking gets a little dull flea markets fall a little flat, try searching for treasures at an auction sale. The excitement can run high, and you just might bag a real bargain on a true treasure.
Article Source: ArticleZones.com
About the Author
Author Ardis Myles contributes to numerous Internet sites, on start home business and device drivers subjects. This article is available as a unique content article with free reprint rights.
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