When most people think of placing a bid online, they tend to think of eBay instead of live auctions. Our familiarity with eBay can make it difficult to understand the differences and benefits of online auctions. However, upon closer inspection, Internet live auctions give bidders more control in the auction process.
eBay and Proxy Bidding
eBay auctions generally work on a system of proxy bidding. This means that when you place a bid, you are stating the maximum amount you would like to pay for the item. eBay’s system then bids for you based on computer-defined increments.
What this means is that if you enter a maximum bid of $50 for a watch that is listed for 50 cents, eBay will automatically begin your bid at $1. If someone else bids $1.50, eBay will bump your bid to $2. All of this takes place without your input.
Although it is possible to update your bid, the common practice is to place your bid and walk away on the assumption that your maximum bid is what you think the item is worth.
Bidding at Live Auctions
In contrast, live bids must be placed by an individual. For example, the same watch at one of these auctions may also have a starting bid of 50 cents. The auctioneer will ask auction participants if anyone is willing to bid $1.
The auctioneer will continue asking for more bids until no one is willing to go beyond the highest bid. So for live auctions, there are really no maximum bids unless someone submits an absentee bid.
An absentee bid is a sealed bid that is submitted before the auction begins. In it, the bidder writes down his maximum amount. In some ways, this is similar to eBay, except that the bid cannot be changed once the auction begins.
The Best of Both Worlds – Internet Live Auctions
Real time auctions work almost like a combination of eBay and traditional online auctions. They are similar to eBay in that users can enjoy bidding from home without having to drive to an auction house. They are also similar because bidders have the option of submitting absentee bids.
The similarities end there. Instead of individuals selling their merchandise, Internet live auctions are presented by established auction houses. Auction houses act on behalf of individuals, estates, or companies to sell items as quickly as possible.
The real difference between eBay and online live auctions lies in the bidder’s control. Instead of placing a maximum bid and seeing what happens, people bidding on real time auctions interact with auctioneers as if they were on the auction floor.
Although computers are involved in the bidding process of live auctions, they are only there to facilitate communication between Internet bidders and the auctioneers. There is nothing mechanical about the process.
By mixing technology with tradition, online live auctions are powerful tools for helping buyers get what they want at a price that makes them happy.