This article provides basic information related to auctions and the auction industry.
This article contains the following sections:
What is an Auction?
As described by Investopedia:
"An auction is a sales event wherein potential buyers (bidders) place competitive bids on assets or services either in an open or closed format."
- The auction industry consists of third-party dealers that organize auctions for items, which are often considered to be rare or highly sought after.
- Products sold can include artwork, cultural artifacts, jewelry, cars or other items that generate demand from the industry’s client base.
- Industry operators (auction companies) often act as a broker of these goods, selling items on behalf of the current owner (consignor).
- Industry operators (auction companies) add value by being able to match bidders to sellers, handling payments, and certifying the authenticity of items sold at auctions.
Proxibid provides a platform for buyers to purchase items directly from reputable auction companies and dealers to create a trusted Marketplace. For more information regarding sellers on Proxibid, see Proxibid Sellers.
Types of Auctions
This auction method type is run by a computer set on predefined automated closings. In Timed auctions, bidder place pre-bids on items in the catalog and then the auction closes automatically at a pre-designated time. Timed auctions are generally online and accepting pre-bids for a least a few weeks.
Timed auctions must have a set opening and closing dates, and bid increments in place prior to accepting bids. Bidders enter their bids against other competing bidders on the internet for the same item.
For more information, see Timed Auctions.
The auction method type where the auctioneer has control of the inventory being sold in real time. These auctions may be live only, or can be live while also being webcast, or simulcast, online.
Some live auctions allow pre-bidding, while others do not.
Live auctions are clerked in real time. The clerk's role is to use software to mark items as sold as they are being auctioned by the auctioneer. The clerk will take note of the selling price and who the item was sold to.
For more information, see Live Auctions.
Common Auction Terms
Bid: The price offered for an item available for auction. A prospective buyer's indication or offer of a price he or she will pay to purchase property [goods] at auction. Bids are usually in standardized increments established by the auctioneer. Placing any kind of bid in an event is a commitment to purchase the item from the auction house in the event that you have the highest bid. For more information about bidding, see Bidding on Proxibid.
Bidder: A person who engages in the act of competitive bidding at auction. or more information about bidding, see Bidding on Proxibid.
Buyer: A bidder (winning bidder) whom is awarded the high bid at the close of bidding on an item at auction.
Onsite Bidder: An individual in attendance at the live auction who has been approved to participate in the event.
Internet Bidder: An individual who has registered and been approved to bid on items online at auction through an online bidding platform, such as Proxibid.
Consignor: Entity that has legal possession (ownership) of any interests, benefits or rights inherent to the real or personal property.
Reserve (Ask Price): The minimum price that a seller is willing to accept for an item in order to sell it at auction. Also known as the Reserve Price, or Ask Price.
Bid Increment: The dollar amount by which the bidding is advanced. The bidding increments are set by the auction company.
High Bid: The highest current accepted price for an item at auction. For more information about bidding, see Bidding on Proxibid.
Deposit: A dollar amount that must be paid by the bidder in order to participate in an event. For more information, see Deposits.
Buyer's Premium: A fee sellers may charge a buyer that applies to the final purchase price of an item. The Buyer's Premium may be a percentage of the high bid or a flat fee added to the high bid. Either way, the Buyer's Premium, taxes, shipping, and additional fees may be added to the purchase price to generate the total owed by the winning bidder. The fees an auction company charges should be listed in the event's Terms of Sale.
Pre-Bids: Pre-bids are bids made in a Timed auction or before a Live auction has gone live. Pre-bids can be instant bids or maximum bids, and are simply bids made in advance. Some sellers may refer to pre-bids as "absentee bids". Pre-bids are automatically represented for a bidder during an auction, up to their maximum bid. For more information, see Pre-Bids. For more information about bidding, see Bidding on Proxibid.
Maximum Bid: A maximum bid is a pre-determined amount that a bidder is willing to bid up to. When a bidder enters a maximum bid, they are telling the Proxibid application to place bids on their behalf, not exceeding the maximum amount. For more information, see Maximum Bids. For more information about bidding, see Bidding on Proxibid.
Group Lots: Single items can be sold in groups, either for one price or by having the highest bid multiplied by the quantity of items. For more information about bidding, see Bidding on Proxibid.
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