Some would even confuse auction as bidding. What then is the difference between these two? Simply stated, the two are different in a way that an auction arouses the curiosity of the people with regard to a certain product, allowing them to participate in an auction and place their bids to own the a certain item. You may also see business proposal examples.
What then is bidding? Bidding is the act of placing the bids to get hold on a certain item. Normally, the person with the highest bid can own the product. However, there are certain cases, such as in a construction, where the lowest bidder can get the project. You may also like service proposal examples.
To know more about bidding, detailed discussions are presented in the succeeding sections.
Before anything else, let us first know what an auction is. Normally, people would go to an auction and, when they badly want to get hold of a certain item, they would compete with other bidders in terms of the amount for a certain item to be the highest bidder. So what then is an auction? An auction is selling and buying goods or services by offering them up for bid, and the highest bidder can have the item. You may also see business proposal letter examples.
The most common form of auction used as of today is the open ascending price auction where the participants bid openly against one another, requiring the subsequent bid to be higher than the previous bid. Other types can still be seen in our society, and these will be discussed later on. You may also like professional proposal examples.
Most auctions are associated with the sale of antiques, paintings, collections. However, auctions can also be used for commodities and livestock as it can also be defined as a mechanism or set of trading rules. You may also check out how do you write a proposal?
Auctions are indeed an efficient means of raising funds as the price of the item is not determined by the market price or the price of other related suppliers but by competitive bidding process.
There are several types of auction that you can see in the different market, and they are as follows:
English auction – also known as an open ascending price auction, this is the most common form of auction today where participants bid openly against one another requiring the next bid to be higher than the previous bid. You may also see partnership proposal examples.
Dutch auction – also known as an open descending price auction, this is a type of bidding where the auctioneer begins with a high asking price for an item and will be lowered when no one will buy the first price asked.
Blind auction or sealed first-price auction – also known as the first-price sealed-bid auction, this is a type of bidding where all bidders simultaneously submit sealed bids so that the other bidder will never know the amount, and the highest bidder pays the price they submitted. You may also like project proposal examples.
Vickrey auction – also known as a sealed-bid second-price auction, this is similar to sealed first-price auction only that the winning bidder pays the second-highest bid rather than his or her own.
Multi-unit auctions – in this auction, more than one identical item at the same time is offered for bidding rather than having separate auctions for each. You may also check out short proposal examples.
All-pay actions – in this type of auction, all bidders must pay their bids regardless of whether they win.
Auction by the candle – in this auction, the highest bid goes to the person whose candle goes out last.
Bidding fee auction – also known as a penny auction, this auction requires the participant to pay a fixed price to place each bid higher than the current bid. You might be interested in proposal memo examples.
Combinatorial auction – this refers to any auction for the simultaneous sale of more than one item in which the bidders can place bids on packages or set of items rather than just individual items.
Generalized first-price auction – this is a non-truthful auction mechanism for sponsored search also known as position auctions.
Unique bid auctions – this is a type of strategy game related to traditional auctions where the winner of the bidding is the person with the lowest unique bid. You may also see fundraising proposal examples.
Japanese auction – in this type of bidding, when the bidding starts, no new bidders can join the bidding, and each bidder must continue to bid each round or drop out.
Mystery auction – this is a type of auction where bidders bid for boxes or envelopes containing unspecified or underspecified items
No-reserve auction – also known as an absolute auction, this is a type of auction in which the item for sale will be sold regardless of the price of that item. You may also check out budget proposal examples.
Reserve auction – this is an auction where the item for sale may not be sold if the final bid is not high enough to satisfy the seller.
Reverse auction – this is a type of auction where the roles of the buyer and the seller are reversed, with the objective to drive purchase prices downward.
Senior auction – in this auction, the top two bidders must pay their full final bid amounts and the highest bidder wins the auction. You might be interested in security proposal examples.
Silent action – this is an auction in which the bids are written on a sheet of paper, and at end of the auction, the highest listed bidder wins the item.
Top-up auction – the winning bidder for this auction pays the amount bid for the item, without top-up and the losing bidders must pay the difference between their bid and the next lowest bid. You may also see non-profit proposal examples.
Walrasian auction – the auctioneer takes bids from both buyers and sellers in a market of different goods, raising or dropping the price depending on the bids of sellers and buyers.
Government, bankruptcy and general auctions – this is an auction held on behalf of a government body or bodies, for example, HM Customs and Excise, the Official Receiver, the Ministry of Defence, local councils and authorities, and liquidators. You may also see research proposal examples.
Motor vehicle and car auctions – a wide range of cars can be purchased in this type of auction, from an accident-damaged car to a brand new top-of-the-range model and from a run-of-the-mill family saloon to a rare collector’s item.
Police auctions – this is an auction of the items that have been confiscated by the police that cannot be returned to their original owners. This may also include those surplus and retired police equipment such as used police cars. You may also like investment proposal examples.
Land and property auctions – evident in its name, land and property are being sold in this auction where one can buy anything from an ancient castle to a new commercial space.
Antiques and collectibles auctions – a huge array of antique materials and other valuable collectibles can be sold and bought in this auction.
Internet auctions – the Internet auction is regarded as one of the most exciting part of the auction world in this digital age. You may also check out grant proposal examples.
Insurance policies – these are auctions held for the sale of second-hand endowment policies in which the price of setting up the policy has already been paid by someone else.
On-site auctions – these are auctions usually held by bankrupt companies in their own premises, selling stocks or huge and bulky assets or those assets that cannot be transported to an auction house.
Private treaty sales – this is the sale of goods to a trader or dealer on a private basis instead of selling it in an auction.
Charity auctions – this auction is usually used by nonprofit, education, or religious institutions as a method to raise funds for a cause through bidding encouraging participants to support the cause and are commonly linked with another charity such as a concert for a cause or charity concert. You might be interested in freelance proposal examples.
16. Timber allocation auctions, with companies purchasing timber from the government forest auctions
17. Electricity auctions, which are usually participated by large-scale generators and consumers of electricity
18. Environmental auctions, bidding for licenses to avoid being required to decrease their environmental impact such as auctions in emissions trading schemes. You might be interested in concept proposal examples.
19. Spectrum auctions, bidding to purchase licenses to use portions of the electromagnetic spectrum for communications
20. Private electronic markets with the use of combinatorial auction techniques to sell commodities such as coal, iron ore, grain, and water
21. Produce auctions, where produce growers will sell their produce to localized wholesale buyers who are interested in acquiring large quantities of produce. You may also see dissertation proposal examples.
22. Debt auctions, where the government sell debt instruments to investors
23. Timber auctions, where licenses to log on government land were purchased by bidders
24. Auto auctions, where used vehicles were sold in retail to the public
Now that you already know the different types of auction as previously discussed above and you already have an idea on the content of an auction bid form and how to fill it out through the examples and templates presented in the previous section, we believe you are now ready to take part in an auction. You may also see proposal examples.