Auction Formats Offered by Strategic Auction Alliance
To attract as many buyers to your auction, Strategic Auction Alliance offers the following types of auctions. Many of these methods can occur live, on line or a combination of both. We hope this guide acquaints our clients and customers with these methods.
Traditional or “English Auction”
(Also known as an open ascending price auction. )
This type of auction is arguably the most common form of auction in use today. Participants bid openly against one another, with each subsequent bid higher than the previous bid. An auctioneer may announce prices, bidders may call out their bids themselves (or have a proxy call out a bid on their behalf), or bids may be submitted electronically with the highest current bid publicly displayed. In some cases a maximum bid might be left with the auctioneer, who may bid on behalf of the bidder according to the bidder’s instructions. The auction ends when no participant is willing to bid further, at which point the highest bidder pays their bid.
Live Webcast Auction
(Also known as a simulcast auction.)
This is a live auction that allows off site bidders to participate remotely through a computer. The auction is broadcast on the internet in real time; on site bidders place their bids with gestures traditionally while internet bidders compete with a click of a mouse. This type of computer assisted auction often offers proxy absentee bidding where a remote bidder may leave a maximum bid which is then administered by the program incrementally and competitively with the other bidders at live auction.
This is a variation of a live webcast auction where all bidders participate in real time remotely via the internet. The auctioneer may be calling and receiving bids from a studio which may not necessarily be on location of the assets being sold. In this type of auction there are no on-site bidders.
Online Only Auction
(Also known as a timed auction.)
This is the type of auction that is most often associated with the eBay style of marketing.
Online Auction with Dynamic Ending
This is also a timed auction however it differs from an eBay type event in the respect that the ending time may adjust depending on the circumstances. Typically this type of on line auction extends the ending time when a participant places a bid in the final minutes of the event giving other bidders time to react if they wish to increase their bid. This type of auction prevents what is become commonly known as “sniping” when a final bid is placed in the final seconds of an auction.
(Also known as an open descending price auction, or “reverse Dutch auction”.)
In the traditional Dutch auction the auctioneer begins with a high asking price which is lowered incrementally until some participant is willing to accept the auctioneer’s current price and bids at that level. This type auction allows only one bid. The winning participant pays the last announced price. There is no further ascending bidding. The Dutch auction is named for its best known example, the Dutch tulip auctions where perishable goods were sold quickly in this efficient method. Dutch reverse auctions can occur live, webcast or on line only.
Sealed Bid Auction
(Also known as a first-price sealed-bid auction (FPSB). )
In this type of auction all bidders submit sealed bids so that no bidder knows the bid of any other participant. The highest bidder pays the price they submitted. This type of auction is distinct from the English auction, in that bidders can only submit one bid each. Furthermore, as bidders cannot see the bids of other participants they cannot adjust their own bids accordingly. This kind of bid produces the same outcome as Dutch auction except that it is a completely blind process. Sealed bid auctions can occur via traditional paper methods or on-line.
“Top 3” Sealed Bid Subsequent Auction Qualifier
This method begins with a sealed bid process where the top 3 sealed bidders are subsequently invited to a closed private second round of bidding. The second round of bidding may utilize any type of auction method then determined by the type of asset and circumstances involved.