Learn About Auctions

New to auctions? No problem… we’ll get you up to speed in a snap!

This online store allow Vendors to publish any of their products either as a Shop Product or as an Auction Product.

Everybody knows how a normal online shop or store works. So, let’s discuss how an Auction Product works here on ISD. An auction is a system of buying and selling goods or services by offering them for bidding – allowing buyers to bid on the auction product and then selling it to the highest bidder. Bidders compete against each other, with each subsequent bid being higher than the previous bid. Once an item is placed for sale, the Vendor (in this case the auctioneer) will start at a relatively low price to attract a large number of bidders. The price increases each time someone makes a new bid, until finally, no other bidders are willing to offer more than the most recent bid, or the auction’s time runs out and closes, then the highest bidder wins the auction and purchase the item. The final bid must be equal or higher than the Vendor’s set reserve price (if he/she had set a reserve price), else the Vendor is at liberty not to accept the highest bid. An auction is considered complete when the vendor accepts the highest bid offered and the buyer pays for the goods or services and takes possession of the goods.

It sounds simple enough, however, there are different ways a seller can set up an auction and how a bidder can place a bid. Let’s familiarise ourselves with some terms used for it and explain how things work here on I Supply Direct.

Auction Types Explained

PUBLIC auction

Everybody can participate. The bidders can see the bids and usernames of other bidders. Bidders can also see the messages between the auctioneer (seller) and other bidders. With this type of auction, the seller can still decide if he/she wants this information to display or not. Even though a Public Auction is not a dedicated BIN auction, the seller can still add a BIN (Buy It Now) price and/or a reserve price. The seller can then set the auction to “Automatic” to automatically accept the BIN price when it is reached. Or, instead of bidding, a bidder can just accept the BIN price and thus become the auction winner (and the auction ends).

PRIVATE auction

Bids are hidden from all other bidders. Only the auctioneer can see the bids and each respective bidder can see his/her own bids. The bidder’s usernames are also hidden from other users, only the auctioneer can see who is bidding. Messages are hidden; the auctioneer can see all messages whereas each bidder can only see his/her own messages. Sellers can change the type of auction with each auction they list.  The normal settings for BIN and Reserve prices also apply to Private Auctions.

BIN ONLY auction (Buy It Now)

With a BIN Only auction, the auctioneer sets a desired selling price. With this auction, buyers can only pay the price asked – no bidding. When a user/bidder accepts the BIN price, the auction ends immediately, and the bidder that offered the BIN price wins. In this case the auctioneer can set the auction to REPUBLISH after every time a buyer accepts the BIN price. This is the same as offering a product at a fixed selling price in an online shop.

AUTOMATIC auction

The default setting for BIN Only auctions are set at “automatic” – this means that when a bidder accepts the Bin price, he/she becomes the winner and the auction close automatically. With a normal BIN auction, bidding continues until it reaches the sellers BIN price, the auction will then stop automatically and the last bidder will be the winner. Nonetheless, the seller can override this default setting while listing an auction, which means that bidding can continue past the BIN price for an auction with a BIN price, but not for a BIN Only auction.

PROXY auction

A Proxy Auction enabled is when the bidders have the option to set a maximum price that they would be willing to pay for an item and then allow the system to bid for them by the bid increment (pre-set by the seller) until someone places a higher bid than their maximum. The Seller has the option to allow/not allow proxy bidding on his/her auction. It is, however, recommended to make bidding easier for bidders. The system will place a new bid following the bid increment every time someone else places a higher bid than the proxy bidder and will continue to do so until the auction is over and the proxy bidder wins, or the price goes over the proxy bidder’s set maximum. Proxy bidders are typically notified when their maximum has been outbid and have the option to set a new maximum to continue participating in the auction.

SELLERS (Auctioneers)

Auction Options

I Supply Direct offers sellers to choose from three possible auctioning types when listing their auction:
(see “Auction Types & Settings” here above)

  • Public: Everybody can participate and see most of the information.
  • Private: The bids are hidden from all others, except the auctioneer and the respective bidders. The bidders on the auction are hidden from others users, only the auctioneer having the option to see them. Messages are also hidden, the auctioneer can see all the messages and each bidder can only see his own messages.
  • BIN only: If the BIN price is met, the auction ends immediately, and the bidder that offered the BIN price wins.

Auction Dates

The seller sets the dates the auction will run – a starting date and an end date. The default period setting for auctions on I Supply Direct is 4 days – which is overridden by the seller’s date setting.

Reserve Price

Auctioneers can set a reserve price for their auction, which is the minimum price the seller will accept. This means that if the reserve price is not met by the end date of the auction, the seller (auctioneer) does not have to accept any offers and the auction ends automatically.

Price Details & Settings

The seller can set the following price settings while listing an auction:

  • Starting bid: This is the minimum bid the first bidder can start bidding.
  • Reserve price (Show/Hide): The minimum price the seller will accept.
  • Minimum Increment: This is the minimum increase a bidder can bid on a previous bid.
  • Current bid: show/hide
  • Number of bidders: show/hide

Auto Extend

Sellers (auctioneers) can choose to automatically extend an auction’s end time/date when:

  • No bids were received before the end. In this instance the auction will be extended with 48 hours.
  • Bids was received only in the last hour before the end time. In this instance the auction will be extended with 24 hours.
  • Sellers cannot choose the duration for auto extension – these are default auction settings.

Minimum Order Quantity (MOQ) Settings

The seller MUST also indicate/specify the following information (these are COMPULSORY):

  • Quantity Available: The seller specifies the total quantity of items/product available.
  • Minimum Order Quantity (MOQ): This specify the Minimum Quantity of item(s) the Buyer is allowed to purchase. This can be as low as one (1) item.
  • Compulsory Purchase Quantity: Using a radio button, the seller can specify one of two options: Whether the buyer can purchase the MOQ or MUST PURCHASE the total quantity of items available (the LOT).

NOTE: The purchase payment is not calculated by the system for these quantities. (See Payments)

About Bidding

Register To Bid

Although all auctions are visible to everybody, whether they are registered/logged in or not, a user must first register and logged in to bid (or sell) on any auction.

Normal Bidding

Normal bidding is when you place a bid on a product in any auction. When any other bidder outbids you, you will receive an email notification that you had been outbid. If you are willing to still pay more, you can revisit the auction and place a higher bid. This process will continue until the auction closes (end time and date) and the last highest bidder wins the auction. The winner will be notified by email with the seller’s details.

Automatic Bidding

On any auction a bidder can choose to place a proxy bid. Proxy bidding means that the I Supply Direct Auction’s automatic-bid feature will automatically place bids for you so that your bid rises incrementally in response to other bidders’ bids. You specify your maximum bid on the bidding form, so that your bid will always be one increment higher than other bidder’s bids – until your automatic bidding reaches the maximum you specified, after which the auction will continue for other bidders.

Success!

"The only limit to our realization of tomorrow will be our doubts of today."
-- Franklin D. Roosevelt

Benefits Of An Online Auction

Convenience: The primary benefit of using an online auction is convenience; buying or selling from your armchair.
Open 24/7: The secondary benefit of using an online auction is that you can sell or buy at all hours of the day – seven days a week.
Instant: You get instant feedback by email when somebody outbid you or when a sale is made.
Saving: An online auction is effortless and saves you precious Time and Money.
Choice: Choices, Choices, Choices!