Deciphering the Four Kinds of eBay Auctions
There are four main types of auctions offered by eBay. While traditional auctions are the most popular of the four, there may be times where one of the other three options may be a better match for your needs. To determine which auction will work best for you, it is important to understand the basics of all four auction types.
The most widely used auction is referred to as the traditional auction. This auction requires that the seller set a starting price and then potential buyers place their bids. The bids increase in increments of at least ten cents. A traditional auction can run for one, three, five, seven, or ten days. When the auction is closed, the highest bidder will have secured the purchase.
The second type of eBay auction is a reserved price auction. This method is very similar to the traditional auction except the seller will set an undisclosed price, below which they will not sell the item. This option provides the seller with a safety net for their product. If at the end of the auction no one has bid up to your reserve price, you are not obligated to sell and the highest bidder does not have to make the purchase.
While reserve price auctions greatly benefit the seller, they often make potential buyers nervous. This is because the buyer does not know what the reserve price is. This may lead them to feel like they are playing a guessing game and may be more reserved in their bidding. Buyers will often seek out other listings of similar products without a reserve price. In addition, eBay does charge a minimal fee for adding a reserve price to your auction.
The third eBay auction type is the Dutch, or multiple item auctions. This auction is used to sell multiple units of the same item. The items can be sold to a single bidder or multiple people. This type is popular with the buying and selling of collectibles. It allows sellers to list as many items as they want in one listing. Buyers specify how many items they are bidding on and the per unit price they are willing to pay. Then the group of bidders that win the auction will pay the lowest winning price.
If you do not have enough products to cover all of the bids then purchasers will be eliminated starting with the lowest bidder. Amongst the lowest bidders are the ones who placed their bids most recently will be knocked off first.
The last type of eBay auction is called the “buy it now” auction. This fixed price option allows sellers to set a price will end the auction. The seller determines a price that will stop the bidding. If a buyer chooses to make the purchase at that price, they do not have to wait for the auction to end, or watch other bidders. They simply click the buy it now button, make the payment and the item will be shipped. This type of auction can be used for Dutch auctions as well.
This option eliminates the normal pressures that are associated with other auctions. Buyers do not have to compete with other members or dedicate a lot of time to the auction It also allows sellers to sell faster and ship sooner, while helping eBay to clear their inventory faster.
Deciphering the differences between the four main types of eBay auctions will help you better determine which one is right for you. Experts suggest that beginners start off with the traditional auction and then move on to another type once they have more experience.
Don Guindon |
