An online auction is the digital version of a live auction. Similar to its more traditional counterpart, an online auction involves sellers, items up for auction, and bidders. But unlike live auctions where you must be physically present to bid on items, online auctions only require your virtual presence through your computer or smartphone and internet connection. All bidding takes place on the virtual platform of the online auction website.
Online auctions offer you the convenience of bidding on items wherever you may be, 24/7. It also saves you precious time, effort and money otherwise spent on going to live auction houses, beating the traffic and looking for parking space.
These benefits all sound good, indeed. But if you’re still wondering exactly how online auctions work, we’ve got you covered. This article will give you a more in-depth understanding of this innovative type of auction and how they work.
Online auctions come with their own set of requirements
And we don’t just mean having a computer or smartphone and stable internet connection.
To participate in online auctions, you must first register or create an account on their website. Your basic information – name, address, contact information, email address, username and password – will be required to activate your account. Some require your credit card information details. Registration is usually free.
Once you have an active account, you can start bidding on any item on their website. It’s that easy!
Being the highest bidder does not automatically mean you will win in online auctions
Online auction sites also show the item’s “reserve amount”, a minimum price that must be met in order to win the bid. For example: if you placed a bid amount of $1,000 for a luxury bag but the reserve price indicated is $1,500, you will not win the bid for that bag, even if your $1,000 bid is the highest bid. But if you increase your bid amount to $1,500 and no other buyer places a higher bid than yours within the bidding period, you will win the bid for that luxury bag.
Online auctions can end without any winner
If not a single bidder placed a bid that met the reserve price of the item within its designated auction period, the auction for that item will close without any winner. The seller may have the option to put it up again for auction, depending on the rules of the online auction site.
Online auction winners have different ways of knowing they’ve won
Should you win the auction, expect to receive a notification, usually through email, about your triumphant bid, so make sure you input your correct email address. And check your spam folder too!
You can also log in to your account to check the status of your bid anytime, anywhere!
Online auctions are still competitive in nature
Just because you don’t see the other bidders doesn’t mean online auctions are far less competitive and exciting than traditional, live auctions. The opposite is actually true. Since anyone all over the world with access to a computer and internet connection can bid against you, online auctions offer a thrilling experience to any bidder!
Online auctions can last from a week to a month
Patience is a virtue that online auctions will demand from you. Unlike live auctions where everything goes fast from the auctioneer’s almost unintelligible chant to the actual bidding period of items, online auctions can stretch from days to a month. Bidders are guided by a countdown feature indicating the number of days, hours, minutes and sometimes even seconds left before the bidding for a particular item comes to a close.
If you are in a rush to own the item you saw in an online auction website, instead of bidding you can usually opt to buy the item immediately. You may place a high bid amount to get a higher chance of winning the bid but you will still risk losing the item if a higher bid is made. There could be another bidder who wishes to own the same item as much, or more, than you, and always override your bid amount, no matter how high it is.
Online auctions offer multiple modes of payment
As with other forms of e-commerce, online auctions offer bidders the convenience of having multiple payment options. The acceptable modes of payment depend on the online auction site you subscribed to, or the seller. Common payment methods utilised by online auction sites and sellers include credit cards, debit cards and perhaps a third-party processor such as Paypal or Stripe.
To minimise the risk of running into problems regarding your payment, we recommend reading the terms and conditions of the online auction site you’re using before placing a bid.