Bid Online Auctions Verses Traditional Auction- A Brief History.
Before appreciating bid online auctions of businesses, it’s good to know the traditional version of it. Auctions trace back all the way to 500 B.C, at this time auctions were for selling wives to Babylonians. Thankfully with time, auction has greatly undergone major evolutions.
Types of auctions
There are possibly 5 types of traditional auctions; these traditional auctions are capable of being converted to bid online auctions.
- English auction
This consist of bids that are taking place openly, each bid tends to be higher than the previous bid. The bidding ends by attaining the buyout amount or when there are no individuals willing to bid higher. The highest bidder will get items from the auction.
- Dutch auction
This auction is different as auctioneers start the bidding with a high asking price. In case there are no bidders willing to join in the bidding, the price lowers until there’s a bidder joining the bid, or until attainment of its prearranged price. The bidder pays off the bidding price for an item in the end.
- Sealed-bid first-price auction
This method requires you to enter the sealed bid auction; here there’s submission of bids simultaneously using a sealed fashion. Opening of the sealed bids at the same time follows, where the bid goes to the highest bidder if they pay the amount they submitted.
- Sealed bid second-price auction
This method works the same way as sealed-bid first-price works with only one exception. On opening the sealed bids, the bid goes to the highest bidder who ought to pay the price of the second highest bidder.
- All-pay auction
In this type of bidding, the bidders are to pay for the price they bid whether or not they win the bid. Here the highest bidder will win again; this method isn’t utilized for commercial purposes.
Advantages of bid online auctions over traditional auctions
- It has no geographical limitations
- The sales and auction last for 24hours in a day for seven days in a week
- They have a lower transaction cost, as the items can only be moved when the sale is made
- Presence of large numbers of buyers with diverse interests.