Online Auction Basics
In any type of online auction, an item is listed for sale with a starting price (reserved), or with no starting price (unreserved), and a deadline for bidding. Potential buyers can then view the item and place bids on it through the auction website.
Bidders can often see the current highest bid and may choose to bid higher in order to win the lot. Some auction sites allow for automatic bidding, where bidders can set a maximum bid and the website will automatically bid for them until the maximum is reached.
In this article we discuss:
- Timed online auctions
- Live virtual auctions
- Online auction advantages
Find out if an online-type auction is the right approach to selling your used equipment.
Timed online auctions
A timed online auction takes place entirely over the internet. Participants place bids on lots during a specific period of time, and the highest bidder at the end of the auction wins the item.
How a timed online auction typically works:
- Before the auction, interested buyers must register and provide payment information.
- The asset(s) for sale are listed in an online catalog. Interested buyers can view all the listings and decide whether or not to bid.
- There is generally a specific timeframe for bidding. Timed online auctions can last anywhere from a few hours to several days – depending on the number of lots listed for sale.
- During the bidding period, buyers can place bids on the asset(s) they are interested in. Bids are made in set increments, and each bid raises the price of the item by that incremental value.
- As buyers place bids, the online auction platform automatically updates the current bid, allowing buyers to increase their bids if they choose to do so.
- When the bidding window for an item ends the highest bidder wins the lot and it is marked as SOLD. The winner is contacted and is expected to make payment. Transportation or pickup of the item needs to be arranged once funds have cleared.
A timed online auction provides buyers with the flexibility to bid on items at their own pace from their own location using a computer or mobile device. Timed online auctions also provide sellers with a way to reach a large audience and potentially get a higher price for their assets.
Black Star regularly conducts timed auctions.
Live virtual auctions
A live virtual auction is an online version of a traditional auction that is called by an Auctioneer. Participants can bid on equipment in real-time using a computer or mobile device. The auction is hosted on a dedicated platform or website and allows bidders to watch the auction in progress and submit their bids.
The real-time bidding process allows for the excitement and competition of a live auction, while also providing the convenience and accessibility of an online auction.
How a live virtual auction typically works:
- Pre-Auction Registration: Before the auction, interested buyers must register to bid and provide payment information.
- Item Listing: All assets for sale are listed on the online auction platform and include a detailed description of the asset(s), photos, and any other relevant details.
- Pre-Auction: Prior to the auction, bidders can view the listings and may be able to ask questions. In some cases, in-person inspections can be arranged.
- Start of Auction: At the designated time, the auctioneer begins the live virtual auction. Bidders can watch the auction in real-time through a live video stream and place their bids through the auction platform.
- Bidding: During the auction, the auctioneer announces the current highest bid, and bidders can place their own bids in real-time.
- Auctioneer's Call: When the bidding slows, the auctioneer will give a countdown to the closing of the bidding for that item, often calling out "Going once, going twice, sold!" Once this takes place, the item is deemed sold to the highest bidder.
- Payment and Item Transportation: After the auction, winning bidders will receive an invoice and payment instructions. Transportation or pickup of the items bought then needs to be coordinated once funds have cleared.
Black Star regularly conducts live virtual auctions.
Online auction advantages
Online auctions offer advantages over traditional in-person auctions such as convenience, a wider audience of potential buyers, increased transparency in the bidding process, and the ability to monitor and bid on auctions from any device - anywhere - with an internet connection.
The Black Star Difference
When we list a seller’s equipment in one of our auctions, we have performed full due diligence on each asset being sold. We have checked for liens, we have conducted a full inspection, and we have taken multiple pictures and videos. We ensure transparency in all our descriptions – giving a buyer the full disclosure of the equipment’s condition.
We can also arrange an inspection schedule with our sellers so that potential buyers can view equipment prior to the auction. After the auction has closed, we will manage all documentation, the payment processing, and coordinate the loadout. Find out about all the services we offer.
Sellers…did you know we will do a dedicated auction for your equipment? Complete dispersals are a specialty and we often conduct dedicated auctions when there is a large number of units involved for one seller. Or, we can include your listings inside any of our upcoming auctions.
Whether you are a seller or a buyer with interest in one of our auctions, feel free to contact us for more information.
This article is our representation of useful information and is not intended to be a complete guide for making the right decision for your company. Ask our experts - or your own - for specific advice based on your unique circumstances.