After the release of the Shopping Cart&Bidding plugin that allows turning any classifieds website into eBay like online auction, we decided to dig more and find how to make money with internet auctions.
Let’s start with general meanings. What’s an auction?! Auction is one of widespread ways of trading. This kind of trade is based on competition when selling any things from fashionable clothes to real estate, used and new cars. The word “auction” takes place from the Latin word “auctio” that means “raise”, however not all auctions are passed with obligatory price raise.
The sense of an auction is that a seller wants to get more money for his good, and vice versa when a buyer wants to pay less money for that good. So these two auction participants negotiate the terms of the trade and bargain the most appropriate price. The main and important thing of auctions is that an auction owner does not participate in the trade personally, in other words an auction is an intermediary between sellers and buyers.
Nowadays common auctions are not as famous as before the Internet era, but today online auctions gain more popularity. Now it’s easy to sell or buy almost everything online, from small knickknacks like lighters or cell phones up to large cars auctions and boats auctions, even buy luxury villas at real estate auctions, or find artworks.
Also it is necessary to note that normally online auctions are carried out within a long period of time from 2 to 15 days. This lapse of time allows involving more people who take part in the auction thus may bring more money to sellers, because buyers will compete with each other and raise the price.
Types of auctions
Let’s move to types of auctions. Curiously enough but there are different types of auctions. Someone can say that’s simple to show goods, set prices and sell things. Well it is not as simple as it may seem.
Direct auction also known as English auction. This is the most simple and widespread type of auctions all over the world. It is carried out publicly, when buyers may raise the price just by saying it or showing a tablet with price. During this auction it is possible to sell or buy almost any things or services which are not prohibited by law. Each auction participant hucksters over the good and raise the price. He who says the highest price will win the auction and get the good. Sometimes goods are not sold because the offered price was less than the reserved price that was set by the good owner. Nevertheless hot-tempered buyers raise the price for goods rather high and all goods are getting sold making sellers and auction owners happy. Most of online auctions work in the same way as direct auctions.
Another type of auctions is reverse auction or so called buyers’ auction. Reverse auction is a complete antithesis to English auction. Buyers express what they want to buy and sellers make offers. Here only sellers compete with each other thus the winner becomes who make an offer with less price. However this type of auctions especially internet auctions is not so popular.
Another type of auctions is Holland auction. This type of auctions differs from others that a seller may set for an auction several items of his goods. Buyers raise the price like in English auction, but all winners of the auction will pay the lowest price. For instance there were 10 items under sale where the highest price was $100 and the lowest price was $80, then all 10 buyers will pay $80 for the goods. There is one more thing that makes it differ from other auctions like you can’t set the reserved price.
And one more type of auctions is American auction. The main sense of this auction is to offer closed trades where buyers pay the prices they offered for goods. Usually each participant submits only one claim with wanted price. After opening all claims a winner is selected.
Of course there are a lot of other auctions available in the world, but they are not so popular. At the moment as we said above the more popularity get internet auctions or online auctions. Someone may ask how to set up or create an online auction that will provide sellers and buyers with all necessary and convenient tools thus help them to sell and buy online with no hassle and sometimes without additional fees?! Well the answer is to find the reliable, professional but at the same time affordable classifieds software or script for running an online auction with all up-to-date features and auction plugin.