We all can picture what an auction is! When I say auction, I bet you can see that fast talking man in the front of the room rattling off prices as fast as he can. He has people scanning the room to see the slightest of flinches in the room that are acknowledging that they like the price for the item. As the flinching stops, the auctioneer gives people 3 chances for them to accept the price or raise the price of an item.
Now, a silent auction is similar, they allow people to How does Silent Auction work place their bids on a sheet of paper and someone can come behind and raise the price of the item. When the auctioneer declares the auctions are over, the highest price is the winner.
A third type of auctions is a blind silent auction. No one knows what the bids are for the item and if you are lucky enough, you can get some steals here. All bids are places on slips of paper and when the item closes, the largest bid wins.
Now, another type of auction is a reverse auctions and these are the type I absolutely love. The item starts at the highest price that the item will be sold at. Now, if you bid on the item, each bid costs you a nominal fee. The nominal fee will reduce the current price of the item, so if it is something everyone likes, the price can go down very rapidly. Normally, these types of auctions are on items everyone participating sees a value in. Now, if I said I had a Flat Screen LCD TV which was 50 Inch screen, everyone starts to see the value in it and if it was brand new. Now, the thing is, if I list the item in an auction and it is not a deal, no one will bid on it. But, what if I listed the item at the lowest price anyone could find the item, you would see a flurry of people wanting to see how much the item is. Now, on a reverse auction, you do not know what the current price is until you ask to see it with a bid. Now, this auction is appealing to me, because I know that the prices are always going down and I can make some choices and if I win, I truly win and not buy an item that is over priced for its value. Now, the seller also wins, because they get the item off of their inventory fast. The people conducting the auctions can make a lot of money too, buy getting more bids. This is a large incentive to get the one conducting the auctions to be the best of the best.
Now, let me share with you 3 types of reverse auctions:
1) It is an express reverse auction. When you bid and see the price, you can then buy the item for that price if you like it. Now, during the auctions, you do not know if others are looking at the price or not. You only know when someone liked it and buys it, the item is taken off the auction.
2) The Second type of reverse auction is the Zero Auction. This is a fun auction and someone who is lucky can win the item for a bid. The last person to bid where the price goes to zero will get the item FREE, except for the bid they made to see if they won. Even in the Express Auctions, you can win for Free, but this one is specifically set to that.
3) The last type of reverse auction is the lowest Unique Bid Auction. You get to bid what ever you want on the item just like the traditional auctions, but there is a twist. You are not going to win it if you bid the most, you win the item when you are the one that bids the lowest unique price. So lets say the item is worth $2000. Now people are bidding and they bid every price up to 99.99 and two or more are at each of the prices. You put in a bid for $100 and there are bids up to $500, but you were the only one that chose $100. Now, even though people bid lower, but were not unique and some bid higher and some may have been unique, you would have won the item.