subject: Online Auctions Versus Traditional - A Little History [print this page] Online Auctions Versus Traditional - A Little History
Some History
In order to really appreciate the online version of this business, you should know a little about the traditional version. My research has shown that auctions can be traced back in history around 500 BC Obviously, the time had an annoying habit of selling off their wives a year in Babylon. Fortunately, the auctions (and the rights of women) have undergone a significant process of evolution.
Five types
There are probably about five kinds of traditional auctions, and I suppose that, theoretically, all or some of them could be converted to electronic auctions.
English auction consists of the open offer made to each bid is higher than the previous one. In this type, the offer ends when nobody is willing to bid higher or when the "buy-out amount has been reached. At this point, the position was awarded to the bidder. This is the method preferred by the famous British brands auctioneers Sotheby, Christie and Phillips.
Dutch auction is a bit different compared to the auctioneer starts the bid with the highest asking price. If no bidders are willing to participate, the price decreases until a bidder is willing to accept the price or up to a predetermined minimum price is reached. The winning bidder pays the last announced price for the item. The Dutch tulip auctions of the 17th century as the most famous examples of this type of auction.
Sealed bid first price auction: Enter the sealed bid auction. In this type, all bids be submitted in a sealed fashion. The sealed bids are opened simultaneously and the position was awarded to the bidder who pays the price he or she submitted.
Sealed bid second price auction: This method works similar to the first price sealed bid method with one exception. At the opening of sealed bids, the award goes to the highest bidder, but he or she pays the price for the second highest bid.
All pay auction: In this type, all candidates must pay the price if the bid wins the prize or not. Again, the biggest winning bid. As you can imagine, this method of auction is not commonly used for commercial purposes.
Advantages of on-line auctions compared to traditional auction houses
Online auctions business models have some advantages over the traditional style auction houses.
* The auction and sales 24 hours a day, seven days a week
* No geographical restrictions
* A large number of buyers who have different interests
* Lower transaction costs - the point should only be moved after the sale
Care to dabble in some online auctions? What bargain can you engineer?
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