How Do Auctions Work?

Sell to the highest bidder, place competing bids to win items.

Auctioning is a system of buying and selling products through a process of bidding. While auctions are often considered to be reserved for the sale of high value items such as antiques, paintings, collectibles, etc., in recent times, the genre has expanded to include the sale of a wide and eclectic variety of goods and services, ranging from houses and vehicles to air travel and memorabilia and everything in-between.

How it all began

The earliest auctions date back as far as 500 BC, and were used to sell products ranging from farm produce and estates to war plunder and slaves, with one of the most historically significant auctions occurring in 193 AD, when the Roman Empire was auctioned to and briefly owned by Emperor Didius Julianus. The system gained greater traction during the Great Depression when thousands of companies and individuals went bankrupt overnight and needed to liquidate their assets in a fast and efficient manner. Over time, auctioning has evolved as a tried and tested method to dispose of assets and liquidate inventory, offering several benefits over regular sales channels.

Brick & mortar to online

Auctions tend to draw large crowds, ranging from investors to bargain hunters and everyone in-between. Larger crowds translate to more robust bidding, pushing prices higher and enabling sellers to obtain higher prices while bidders pay what they choose to for the items they desire. While auctions were for many decades confined to the physical space, in recent years auctioning has climbed on the e-commerce bandwagon, becoming increasingly popular due to the myriad advantages it offers.

Speed

Reliability

Convenience

Traditional Auctions

Traditionally, prior to an auction commencing, potential buyers are offered a preview period, during which time they can view and inspect the items they wish to purchase. Buyers register with the auctioneer, providing details such as their name, phone number, address and identification, and receive a bidder card with a unique number. Once the auction begins, the auctioneer gives a brief description of the item for sale, and kicks off the bidding, generally at a reasonable minimum bid price stipulated by the seller. Bidders then call out their bid, lifting their paddle so the auctioneer can identify them. Bidding continues with the price increasing until buyers are not willing to offer more than the most recent bid. Provided the reserve price (minimum price the seller is willing to sell at), if one is stipulated is met, the item goes to the highest bidder. Once the winning bidder pays for and takes possession of the item, and the seller pays the auctioneer’s commission, the auction is considered complete. These auctions often go on for hours, and can be a long and tiresome process.

Online Auctions

In contrast, auctioning in the online space is far more seamless and less time-consuming, ensuring a seamless end-to-end online process offering greater convenience to both buyers and sellers. These include cost and time savings, as bidders don’t have to travel to and spend large amounts of time at lengthy auctions, the reduction of overhead costs including the security, manpower and space required to hold physical auctions, and the elimination of the need to carry bulk cash as well as being unable to buy additional items that may catch the eye due to the non-availability of hard cash.

Ceylon Auctions

With Ceylon Auctions, buyers and sellers simply register FREE online at www.ceylonauctions.com. Registered users can then browse, list and sell items at their convenience. Bidders competing for products can place a maximum bid indicating the price they are willing to bid up to, and the system automatically generates bids on their behalf up to the maximum bid. Bids can be revised any number of times, and items that don’t sell can be re-auctioned. An unlimited number of items can be listed and bid on. The auction is complete once successful bidders pay for and collect the item and sellers pay the auction commission.

Online auctions are the future of the industry, Ceylon Auctions is trailblazing a bigger and better space for auctioneering in Sri Lanka and beyond.