Types of Auctions

What Are the Types of Auctions?

When you hear the word auction, just like most people, you would think of an item being sold at a suggested or starting price that’s set by the seller. There’s the bid caller, also known as an auctioneer who calls or auctions the property in an ascending-bid manner. This auction is the English type, the most common form of auction, but it is just one of the many types of auction you can do.

An auction is the process of selling goods through a process known as bidding. An item is offered to the bidders at a starting price and sold to the highest bidder. The word auction, which came from the Latin word augeō, means “I increase.” This was used as early as 500 BC. During the Roman Empire, soldiers would auction off their spoils of battle after a military victory, with their proceeds going toward the war effort.

With the increasing use of charity auction or a fundraiser auction as a way of raising funds for many organisations, wouldn’t it be good to know the different types of auction? Here’s an article that covers the different types of auction and which one you should host for your organisation. This will surely help you in your auction planning.

Types of Auctions

According to the order in which the auctioneer quotes prices and the way bidders offer their bids, here are some types of auction.

  • Ascending-bid auction

Also called English auction, ascending-bid auction is the most common type. It is most often used to sell wine, antiques and art.

As the name implies, this auction is where potential buyers bid against each other, until run times out or the bidding is exhausted. The auctioneer starts the bidding at the lowest price he is willing to accept for the item at auction or a reserved price which may be zero. Whenever a bidder has expressed interest at that price, the auctioneer calls out and solicits further bids. The price is usually increased at a predetermined bid increment. The bidding continues until no one is willing to increase the bid any further, and the final bidder wins the item at their bid price. This type of auction is also known as a first-price auction because the winner pays the bid.

  • Descending-bid auction

This type is also a first-price auction and known as Dutch auction. It differs from an English auction in that the auctioneer starts at a high price that’s higher than what the item may fetch. The price decreases until a bidder is willing to take the offered amount. This is why it’s called a descending-bid auction. The winning bidder pays the item at the price at which they made the call.

A descending-bid auction is commonly used in flower markets in Holland, hence the name “Dutch.” An advantage of using this type of auction is its speed as the process takes relatively little time.

  • Sealed-bid auction or Ballot Bidding®️

While bidders are aware of how much other bidders bid for an item in English and Dutch auctions, this is not the case in a sealed-bid auction. In this type, the bidders submit their individual bids in a sealed envelope, a piece of paper or in Ballot Bidding® forms if you’re going to work with us. When all of the envelopes are opened or the forms are checked, the highest bidder is announced. That winning bidder receives the item at the bid price made. 

  • Silent auction

In silent auctions, items are displayed for the guests to assess, place bids on and buy. They are called silent auctions because there’s no auctioneer calling out or crying out for bids. What happens is that the guests place their bids silently and anonymously on a bid sheet or through their mobile devices. 

In addition to these types of auction based on the order in which the auctioneer quotes prices and the way bidders tender their bids, other types of auction based on how they’re being done are live or online auctions.

A live or ballroom auction is an onsite auction that’s commonly done on premises, such as a sale yard, auction house or related property. An auctioneer or bid caller is present to call for bids on items being sold. In this type of auction, bidders openly compete to buy, and they can observe the behaviour of other bidders. 

An online auction enables bidders to participate or bid on a certain item by submitting their bids by computer or mobile device over the Internet. In this flexible and convenient type of charity auction, all bidders see the same information within a specific duration. Online auctions can also come as an ascending-bid auction, descending-bid auction and silent auction.

What Type of Auction Should You Host?

There are so many forms of auctions, and you should host what best suits your goal or fundraiser auction plan, the one that will give you the most results or revenue. The type of auction you should host may also depend on the nature of items you will auction.

Lending You a Helping Hand 

Are you trying to set up a charity auction? Or do you need help with auction planning?

Whether it’s a silent auction or a traditional one, Helping Hand Group can assist you with no upfront costs to you. We can help you with every aspect of your charity auction event. We can provide you with rare and exciting auction items, event planning staff and even a professional auctioneer, and you don’t need to pay us. We only get a profit when the auction items are purchased at your event.

Let’s start planning for your charity auction today. For more details about this partnership, contact us.