Auction Types and Auction Terms
Auction Formats:
There are several types of auctions online. It is important to know how they differ and how auctioneers function within them.
Dutch Auction:
This is an auction in which the seller lists multiple quantities of an identical item. With multiple items up for sale, multiple bidders can win. Also, one bidder can try to buy more than one quantity. All winning bidders pay only the lowest successful winning bid amount.
Yankee auction:
Each winning bidder pays his or her exact high bid.
Reserve Auction:
This is an auction in which the item for sale has a reserve price. The reserve price is the lowest price at which a seller is willing to sell an item. Although the reserve price is not listed per se (the auction posting will be marked as "reserve met"), it can be extrapolated when a bidder bids at or above the reserve price. The high bid will automatically be elevated to the reserve price, providing the current high bidder with what the seller would agree to sell at.
Straight Auction:
Also referred to as an absolute auction, this is an auction in which there is only one item up for sale, and there is no reserve price. The seller sets the opening bid and must respect the final price at the end of the auction.
Auction Terminology:
"As Is": Also known as "as is, where is" and "in its present condition." Typically, this is a sign that no return privileges will be granted.
Bid Cancellation: The cancellation of a bid by a seller. During online auctions, sellers can cancel a bid if they feel uncomfortable about completing a transaction with a particular bidder.
Bid History: A historical list of all the bids made on a particular auction during or after the auction.
Bid Increment: The standardized amount an item increases in price after each new bid. The auction service sets the increment, which rises according to the present high bid value of an item.
Bid Retraction: The legitimate cancellation of a bid on an item by a bidder during an online auction.
Bid Rigging: Fraudulent bidding by an associate of the seller in order to inflate the price of an item. Also known as shilling and collusion.
Bid Shielding: Posting extremely high bids to protect the lower bid of an earlier bidder, usually in cahoots with the bidder who placed the shielding bid.
Bid Siphoning: The practice of contacting bidders and offering to sell them the same item they are currently bidding on, thus drawing bidders away from the legitimate seller's auction.
Bulk Loading: Listing a group of different items in separate lots all at once using an online auction site's bulk loading tool.
Caveat Emptor: The Latin phrase meaning "let the buyer beware."
Deadbeats: High bidders who fail to pay for the item they won.
Escrow: Money held in trust by a third party until the seller makes delivery of merchandise to the buyer.
Feedback. One user's public comments about another user in regard to their auction dealings. Feedback comments cannot be removed or changed once submitted to an auction service.
Featured Auctions: Auction listings placed prominently on the home page and category pages of an auction service. Sellers pay for this prime placement.
Final Value Fee: The commission charge the seller pays to the auction service after his or her item sells.
Grading: The process for determining the physical condition of an item. Different items have different grading systems.
Market Value: The highest price a property will bring in the open market.
Maximum Bid: The highest price a buyer will pay for an item, submitted in confidence to an online auction service's automated bidding system to facilitate proxy bidding.
Minimum Opening Bid: The mandatory starting bid for a given auction, set by the seller at the time of listing.
NR: Short for "no reserve." This indicates in the item description line that the auction has no reserve price specified.
Opening Bid: The seller's opening bid, which sets the opening price.
Outbid: To submit a maximum bid that is higher than another buyer's maximum bid.
Registered User: A person who has registered as a member of an online auction service. All online auction services require registration prior to buying and selling.
Relisting: The relisting of an item by a seller after it has not received any bids or met its reserve price. Typically, the first relisting is free.
Reserve Price: The minimum price a seller will accept for an item to be sold at auction. This amount is never formally disclosed.
S&H Charges: Shipping and handling charges.
Secondary Market: The buyer market for secondhand goods. Online auctions serve the secondary market.
Shilling: Fraudulent bidding by the seller (using an alternate registration) or an associate of the seller in order to inflate the price of an item. Also known as bid rigging and collusion.
Sniping: Outbidding other buyers in the closing minutes or seconds of an auction.
Starting Price: The mandatory starting bid for a given auction, set by the seller at the time of listing.
Terms of Service: TOS A legally binding agreement that outlines an auction site's operating policies. All registered users must agree to a site's terms before using the service.
User Info Request: A request for a user's background information, which provides personal information, such as a phone number.
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