Auction Types
Every auction on this site will either be a "standard auction", a "dutch auction", or a "reverse auction". When the seller only has one item to list in the auction, it will be a "standard auction". Typically, when the seller has two or more of an identical item, it will be a "dutch auction". If the auction is for a job that needs to be done, and bidders would be for the amount they would charge to do that job, it will be a "reverse auction". These auction types are described below:
Standard Auction
In a standard auction all bidders bid against each other, and the highest bidder at the end of the auction is the winner of the item, assuming the winning bid has surpassed the "reserve amount" as specified by the seller when the seller listed the auction. In a standard auction there is only ONE winning bidder.
Dutch Auction
In a dutch auction the seller is offering two or more of an identical item for auction. Unlike a standard auction, a dutch auction MAY HAVE MORE THAN ONE winning bidder.
Each bidder bids on either all, or a desired number of the auction items, and indicates the price that he/she is willing to pay for each of item. At the end of the auction, all winning bidders will pay the same price for each of their items, which is the lowest qualifying (successful) bid. If there are more successful bids than items available, priority goes to the bidders who submitted their bids first.
In order to beat another bidder, a bid must simply have a higher total bid price per item than the other bids, regardless on the number of items that are being bid on.
Here is an example of how this might work:
The seller listed a dutch auction with 5 identical items.
The outcome of this auction would be:
The $20 price is because the lowest successful bid was $20. The total items were awarded based upon Bidder B's willingness to bid a higher dollar amount than Bidder A.
Since Bidder "A" was only awarded "1" item, and his original bid was for "2" items, he has the right to refuse the purchase of that partial order.
So, as a winning bidder, you have the right to refuse paying if you are only awarded a partial number of the items you were bidding on.
Reverse Auction
In a reverse auction all bidders bid against each other and the lowest bidder wins the auction. The bidder in a reverse auction is usually bidding to provide a service or fulfill a contract so in this case they win to provide the service or fulfill the contract. You as the one posting the reverse auction has the ability to place a reserve price on the auction. This forces the winner to beat your reserve price (bid at or below it) to win the auction. If the reserve price is not beat the auction will not close successfully and there will be no winner. You also can determine the starting price (maximum price) at which bidding will start. The first bid must be less than or equal to the maximum price set for the auction.