There Are So Many Types of Auctions - Which One Best Fits My Company?
Navigating Every Auction Type
If you are new to the auction world it might be difficult to understand the industry vocabulary, the types of auctions, and how they differ. After all, when most people think ‘auction’ their minds jump to the charity event they attended or a shot of a room of people with paddles from a movie or TV show. While some auctions do include bidders with paddles, many auctions can look a lot different than that. We have created this guide of different auction types with examples so that you can determine what type of auction your company should hold!
Live Auctions
The Classic Live Auction
Of all the auction types, this is the one you are probably the most familiar with. Live auctions were the start of it all. A live auction typically has an auctioneer at the front of the room or auction space conducting the auction. Along with keeping track of the bidding, they may act as the MC of the event, keeping bidders updated as the auction progresses. To be able to participate in a live auction a bidder must be physically at the auction and will have a paddle or a bidder number in order to participate.
Holding a live auction is best when you can easily have all the items for sale in the same place. Whether it be antiques, cars, experience packages, or livestock, bidders will like to have the chance to inspect the items they want to bid on and decide how much they want to offer. Live auctions can take place anywhere an auctioneer will go – whether that be an auction house, a farm, or an event hall.
People will be excited about the experience surrounding the live auction, not just the auction itself. Many live auctions are conducted as charity events, where an organization will host a formal dinner to raise money for their organization. Regardless of where it is hosted, the fact that the bidders are all present and can see each other adds to the anticipation, driving the bidding price up as people get wrapped up in the excitement of it all. You really can’t go wrong with a live auction!
Online Auctions
On The Go Bidders
An online auction gives bidders the convenience of bidding on items anywhere in the world. Online auctions occur when an auction company sets up all the items to be auctioned off in different lots on their website. Traditionally the lots include pictures from all angles and sections of the products as well as information about the items so that bidders can learn more about what they might purchase. There will also be contact information if a potential bidder has a question or would like to conduct an on-site visit to inspect the items. The terms and conditions, privacy, and shipping information are available for all bidders as well. Last but not least there are live updates and notifications to sign up for that will keep bidders informed of the starting bid, bid increments, the current high bidder, and the amount of time left before the auction closes, giving them a better auction experience.
There are many advantages to conducting an online auction. To start, bidders can access the auction wherever they are and can bid freely as long as the auction is open. This broadens the pool of bidders that you can have looking at your auction. Since they don’t have to be onsite, you could have people from across the country bidding on your items, increasing the number of bidders and thus the final bidding price. Online auctions are also beneficial if you only have a few items to sell, or if you don’t have the funds to host an event. They are also great for auctioning off large machinery or commercial assets that would be expensive to move to a different auction location.
Simulcast Auctions
The Combiner
Ever wanted to pair the benefits of an online auction with a live auction? Let us introduce you to a Live/Simulcast auction! Simulcast software allows you to stream a live auction online so that bidders at home can watch from their computers and bid online alongside those who are physically at the auction. This gives your auction the advantage typically reserved for online auctions – an increased bidder pool of people from all over the country or the world that increases the final bidding price. Conducting a Live/Simulcast auction truly gives you the best of both worlds.
Multi-Parcel Real Estate Auctions
The Divider
Are you selling real estate? If so, this type of auction might be right up your alley. Multi-parcel (or multipar) auctions allow you to break up the land that you are selling into different lots so that you can get the maximum profit for your real estate. For example, say that the home you are trying to sell sits on a decent amount of acreage. You might choose to auction off the home and the land separately to bring in more bidders who may be interested in one part of your real estate not the other. Or, maybe you are a farmer looking to sell a large quantity of land. In a multi-parcel real estate auction your property will be divided into multiple parcels of land to be bid on by multiple farmers who could use some extra land, but don’t need or are not able to afford your whole property. Again, this increases your final profits as you might get more from a group of multiple bidders than just one. Multi-parcel auctions can be conducted both live and online depending on your preferences.
So there you have it, four of the most common auction types. We hope that this guide has made it easier to determine what type of auction is best for your company, and hope that as you move forward in this process your auction will be successful! As a provider of software for all of the above auctions, contact us if you are interested in purchasing auction software.