Bidding in the Dutch Auction

In Dutch auctions, the auctioneer sets an initial high price and then gradually decreases the price for the commodity until one of the bidders accepts the current price. Technically speaking the Dutch auction is a descending auction with a first-price mechanism, meaning that the buyer pays the price she actually bid for the good. The Dutch auction originally obtained its name from the flower market in Amsterdam, which is based on that specific auction mechanism. The Dutch auction is especially interesting due to its theoretically equivalence to the first-price sealed-bid auction, in which each of the participants submits exactly one sealed bid and the highest bidder gets the commodity for the price she has bid in the first place. Although the mechanisms are, independent of the participants’ risk attitude, theoretically equivalent, they systematically lead to different market outcomes in experiments

Types of Auction

Autobidder – As the name refers, this is an auction where automatic bidders are allowed to be used for all users. You can use Autobidder when you don’t have the time to follow the auction live all the time but still don’t want to waste your chance to win the item. You can set autobidder to make a bid for you some seconds before the countdown ends to increase your chance of winning. You can adjust all settings as you please – set item price floor and price ceiling within which you want the autobidder to make bids for you. Also, set the maximum number of bids that you are willing to make for the auction. You can change the Autobidder settings as you wish at any time you want.

For a coming auction Autobidder can be activated at any time before the auction starts. For a live ongoing auction Autobidder can be activated latest 3 seconds before countdown reaches zero. If you wish to make a bid within the last 3 seconds of the countdown you need to place it manually (i.e. without Autobidder function). *Please be attentive that when you are buying new bids, your Autobidder settings will not change. If you want to extend Autobidder with newly bought bids, you also need to refresh your set Autobidder(s).

Once you have activated the autobidder, you can log out and close your browser if you wish, your autobidder settings will be saved in our server.

Please note that for example if you set your autobidder to start bidding from RM5.00, it will make the 1st bid once current price reaches RM5.00, not on RM4.99

    Cashback – if the auction has a cashback icon, then the last 1-3 bidders can get back either all or some of the bids that they used for this auction, depending on the specific auction. Click on individual auctions to see the details how much can you get back if you end up among the last 1-3 bidders.

   24h Auction – these auctions do not pause at 12am (like regular auctions) but continue also after midnight as long as a winner is found.  When taking part in these auctions using your online account please make sure to have enough bids in your account because according to current legislation, Malaysian e-banking only operates from 7am to 11.59pm. Alternatively you can top up your account using a credit card/PayPal or use your mobile phone to make bids via text message 24 hours a day.

   Fast Auction – Just as a regular auction except that the countdown time is significantly shorter

   Fixed Price Auction – Auction has a fixed price for the item. Regardless of the number of bids made the one who makes the last bid will win the item on the initial set price.

   Zero Auction – Regardless of the number of bids made the winner of the auction will not have to pay for the item  end price at which the auction ended except it’s delivery cost.

   Bonus Auction – Just as a regular auction except that it has a bonus item attached if bids exceed the number set in the „bonus auction“ box.

Credited to : PennyAuction.

http://www.pennyauction.com.my/howitworks/

This week Poll Analysis

We did poll voting with a question " Which is your most favorite auction site? "

By giving some sites to votes which is ebay, Bitz.com, Penny auction, uBid as our second poll analysis. We also created a pie chart which is related to our topic to show the vote results specifically.

Podcast : Get to know about electronic auction (Tamil)

Electronic Auction by Kumaran Rajoo




குமாரன் : வணக்கம்

                    : நான் குமாரன்

அருள்   : நான் அருள்செல்வன் செல்வான்

ஜனா    : நான் ஜனா

                : நாங்கள் உங்களை "Electronic Auction" இணையத்திற்கு வரவேற்கிறோம்.

குமாரன் : "Electronic Auction" என்றாள் என்ன?

அருள்   : "Electronic Auction" என்றாள், ஒரு பொருளை ஏலத்தில் மூலம்  

                     வாங்குவதாகவும்                                 

ஜனா    : அதுமட்டுமல்லாமல், நாம்  நம் பொருல்லை ஏலத்தில் விற்று             

                அதிகமான பணத்தை பெறலாம். 

குமாரன் : அப்படி என்றாள் இதன் மூலம் நாம் சுலபமாக பொருளை விற்று

                       பணத்தை பெறலாம்     என்கிறீர்கள்?

அருள்   : ஆமாம் குமாரன்  

ஜனா    : ஆனால் அதில் சில விதிமுறைகள் உண்டு.

குமாரன் : ஓ அப்படியா!!? அது என்ன?

அருள்   : முதலாவதாக, நீங்கள் ஏலமிடும் நிறுவனத்தில்  பதிவு செய்துகொள்ள          

                    வேண்டும். இது நீங்கள் வாங்கும் பொருளை தேர்வு செய்யவும்

                    விட்கவும் உதவும்.

ஜணா  : இதில் ஆர்வம் இருந்தால்,உங்களுக்கு சில மணி நேரம்  

                 கொடுக்கப்படும்.அதில் யார்  அதிகமான ஏலத்திற்கு வாங்குகிறார்களோ        

                 பொருள் சொந்தமாகும்.  

குமாரன் : அந்த ஏலத்தில் வெள்லவில்லையென்றாள்?

அருள்  : அப்படி என்றாள், நீங்கள் மற்ற பொறுக்களை ஏலத்தில் வாங்க முயற்சி      

                   செய்ய வேண்டும்

குமாரன் : ஓ இப்பொழுது தான் எனக்கு புரிகிறது, ஆனால் எப்படி அந்த    

                      காட்டாணத்தை செலுத்  வேண்டும்?

அருள் : அதற்கு சில வழிமுறைகள் உள்லந உதாரணத்திற்கு "credit card" மற்றும்   

                 "debit card".

ஜனா : அது மட்டும் அல்ல, "chaque" மூலமாகவும் செலுத்தலாம்

குமாரன் : ரொக்கமாக செலுத்த முடியுமா?

ஜான    :  கண்டிப்பாக முடியும்! இதுதான் ஏலம் நடத்தப்படும் சில முறையாகும்.

அருள் : இதனை பற்றி மேலும் தகவல்கள் வேண்டும்மென்றாள் எங்களின்

                   இணைய தளத்திற்கு  சென்று தெரிந்து கொள்ளலாம். ஏதேனும்     

                   கேள்விகள் இருந்தல் எங்கலை மின்அஞ்சல்

                  மூலம் தொடர்பு கொள்ளலாம்.

ஜனா, அருள், குமாரன்   : நன்றி.

  

Translation :


Kumaran : Hi everyone, I'm Kumaran.
Arul         : I'mArul.
Jana         : I'm Jana. Welcome to our blog. We are here to discuss a topic related on Electronic Auction.
Kumaran : What is Electronic Auction?
Arul         : Electronic Auction is a place to buy things,depend on your bid.
Jana         : It is also a place to sell things, where other people can bid and you can earn the money.
Kumaran : Oh,so electronic auction is a place where we can buy and sell things at same time we could      
                   earn money right?
Arul         : Ya...You're right bro...
Jana         : but there are some procedure to follow.
Kumaran : Oh really..., What are the procedures?
Arul         : First of all, you need to have ab account or register before you can buy or sell an item. This
                   is required to track the items you bid on or sell.
Jana         : If you are interested in a product that you are required, you are given a 3 hours time limit,  
                   who ever has the highest bid they win. So the seller will sell the product to the highest

                   bidder.

Kumaran : What if we never win the bid?

Arul         : In that case, you lose, unfortunately you must bid another item.

Kumaran : Oh...now i understand, So how does the payment are made?

Arul         : For the payment, buyers may have several payments which is, credit card and debit card.

Jana         : Not only that, payments can also be made through cash cheque and personal cheque as 

                   well.

Kumaran : Oh okay, so for sure there is cash on delivery right?

Jana         : Yes of course,there is. Where is, this are the basics on now online auction works.

Arul         : Okay that's all for now. To get more information regarding electronic auction, please do visit 

                   our blog. For assistance, please do personally email us.

Jana         : Thank you. 

Example of electronic auction site

Knowing how to bid is the trick to getting the best deal.

There are basically three types of bidders on Ebay.

Those looking for the lowest price.

Those looking for an item and willing to pay anything reasonable to get it.

Those on a budget but who really want the item they are bidding on.

Once you've decided which type of bidder you are, you can set up your strategy in a way that works with your buying goals.

Lowest Price Strategy

People who are looking for the lowest price on an item will find holding off to bid until the last moment will work best for them. This may not be the most popular practice but it is done regularly as a way to keep the price of an item down until the last minute than snatching it at a good price.

Willing to Pay Strategy

Those looking for an item and willing to pay any reasonable amount for it will do best if they start off with a relatively high bid and maintain that position throughout the auction.

Pre-determined Limit Stragety

People will determine how much they are willing to spend for something and not exceed it regardless if it means losing the auction. A good strategy here is to go in with a bid on the high side and continue to counterbid until you reach your limit.

Deceptive Bidding to Watch Out For

Shill bidding is when a seller sets up fraudulent bidding. This is done using an alternative registration themselves or having an associate working with them, bidding on the item to inflate the price. This is also known as bid rigging and collusion. Usually the bidder that has not set a predetermined limit to what they are willing to pay will be most likely to fall victim to shilling.

How To Place Your Bid Proxy Bidding

Okay, you've found what you want and you have decided the maximum amount you are willing to pay for it. Let's say you are willing to pay $30.00 and the current bid price is at $3.00. You enter your maximum bid (the most you are willing to pay for the item) and eBay will automatically place your bids for you through out the auction.

This is done through preset automatic increments which will increase as the highest bid on the item increases.

Basic Example of the Bidding Process

You've found an item you want to bid on.

You've determined you are willing to pay $30.00 for it.

The mininum bid on that item is $15.00

You enter your maximum of $30.00

If there are no other bids on the item the proxy server will enter your bid at the minimum of $15.00.

If someone bids $20.00 on it, the proxy server will automatically increase your bid to $21.00. That is what it is currently bidding for plus the minimum increment.

eBay then informs the other bidder that they have been outbid.

This bidding process continues throughout the duration of the auction, or until your maximum is met whichever comes first.

If someone joins the auction with a maximum bid of $35.00, you will be informed that you have been outbid.

Bidding Tip

Your maximum bid has nothing to do with the minimum bid increment. That only applies to the current high bid.

Example -

Your maximum bid is $30.00

The minimum increment bid is $1.00

The current high bid is $16.00

To beat the current bid another bidder would have to bid at least $17.00.

Now here is where it gets tricky. Let's say that bidder decided to put his maximum bid $30.01.What happens? You lose the auction by a penny!

That is why it is a good idea not to put your maximum bid in at a predictable amount. If your maximum bid is $30 you would want to put it in as $30.63 or some off number. Many eBay auctions have been lost by a dime, nickle or penny.

Source : www.about.com

URL : http://couponing.about.com/od/onlineauctions/a/ebay2.htm

Selling an item on eBay

A typical eBay auction takes just a few minutes to set up. A basic auction page includes a text description of the item being offered, with extras such as photos, bold text, and premium placement available for small fees. The seller also sets a flat shipping rate that’s added on top of the winning bid, and can be accompanied by specific shipping instructions. eBay profits from each auction in two parts: the seller pays a listing fee that’s anywhere from a few cents to a few dollars (depending on what options they select for their auction), and then must give eBay a small percentage of the winning bid.The seller has a few options for how long their auction may last, with the most common choice is seven days.

Reserve & “Buy It Now” prices

There are two features of an auction that let the seller influence price they receive for their item: Reserve Price and Buy It Now.

A Reserve Price is the minimum amount of money that a seller is willing to accept for their item. The reserve price is hidden from all bidders; no bidder may win the auction without meeting the serve price. A reserve price is an optional auction feature, available for an extra fee.

An auction with a Buy It Now price can end before the bidding even starts. If an auction with a Buy It Now price has not yet received any bids, any eBay member may purchase that item immediately for the Buy It Now price. Once the first bid is placed though, the item is no longer available for the Buy It Now price.

Buying an item on eBay

The basic bidding process is equally simple: each bidder sets the maximum price they’re willing to pay for the item, and eBay continually updates the highest bid according to a preset incremental amount as the auction progresses. For example, if you tell eBay that you’re willing to pay at most $100 to win an auction, eBay will keep bidding on the auction for you until it hits that $100 ceiling. If the maximum bid then exceeds your own $100, you’ll have to increase that $100 amount in order to stay in the bidding.

When you bid on an eBay auction, you are entering into a legal contractual agreement with the seller. If you win the auction, you are obligated to purchase the item from the seller.

The most important moments of an auction are usually the last few minutes. As closing time approaches, many bidders will increase their maximum bid at the last possible moment in an effort to win the auction at a moment when the other bidders do not have adequate time to respond with higher bids. This process is referred to as Auction Sniping.

When you win an auction on eBay, you must pay the seller according to the payment methods they have outlined in the auction (but remember: never give any sensitive information such as your bank account or credit card number to someone). The most common method of delivering payment to a seller is through PayPal, a service that lets you send payments to a person via e-mail address. PayPal is owned by eBay.

Keeping track of your eBay activity

All eBay members have their own “My eBay” page. My eBay aggregates all of your eBay activity – items you’re bidding on, items you’re selling, your feedback, and more.

The eBay feedback system

Buyers and sellers can evaluate each other through eBay’s feedback system. The seller and winning bidder of an auction are both given the chance to rate each other on their experience with the transaction. Recipients of negative feedback may respond with their side of the story. While some say this system leaves a bit to be desired, it does give a fair amount of insight into the history of a member’s dealings with the eBay community.

Risks to buyers and sellers on eBay

While most people have pleasurable experiences on eBay, there will always be some members who are looking to exploit the system or defraud the community. The eBay page at Wikipedia is an excellent source of information on both questionable and fraudulent eBay practices that you should be on the lookout for.

Source : http://www.ofzenandcomputing.com/zanswers/236/

Poll Results Analysis

 We did poll voting with a question " Does electronic auction is better way to sell things?".We also created a pie chart which is related to our topic to show the vote results specifically. 

It shows there are 7 voters participate in the voting and most of them voted "Yes" as their opinion. Therefore 6 (85%) voted as "Yes" and only 1 (14%) voted as "No".


In conclusion, most of the voters are said "Yes" to sell thing via electronic auction is a better way. If you disagree with this results, please drop a comment so that we can discuss about it.

Online Auction System

The Accelix online auction system is a flexible solution for supporting online auctions. The system has been designed to be highly-scalable and capable of supporting large numbers of bidders in an active auction. The Accelix auction system is oriented toward lot-based block auctions where a catalog of items is prepared for entry into the system in advance, and the auction takes place for all the items in the catalog over a fixed period of time. An example of a high profile client that uses this product is Huggins and Scott Auctions.
Unlike the commodity auction programs that cost a few hundred dollars, run on Windows servers, and can handle a few hundred people before they break under load, the Accelix auction system is an enterprise-based system that runs on several servers in order to distribute database I/O and web transactions. While it is possible to run the system on a single server, we generally recommend a minimum of three database servers and three web servers. These servers should have multi-core processors, large amounts of memory, and substantial Internet bandwidth. The base cost for the software is $50,000 USD, plus any modifications required by the buyer. We provide contract-based support to maintain the system and handle any technical support issues. It is not unusual for a site running the Accelix auction system to spend in excess of $100,000 in hardware and software when bringing up a new auction system.

source: http://www.accelix.com/auction.htm

Electronic Multidimensional Auctions and the Role of Information Feedback

Traditionally, companies aiming to achieve competition among suppliers have used sealed bidding procedures in their sourcing processes. The advance in information technology and in particular the Internet now allow these companies to use different and more complex auction mechanisms. In particular multidimensional auctions are a natural extension of the standard sealed-bid auction, but these auctions raise a whole host of issues that have been little investigated. In this article we focus on one of these issues, namely the role of information feedback given during the auction process. We describe various feedback policies and analyze the expected impact on the performance of the auction mechanisms using the criteria of speed of convergence, allocative efficiency and Pareto optimality. This can help both researchers and practitioners in a more detailed and through analysis of electronic auction.

The example of a unique auction "Sharky Bids"

While at first glance the site may seem "too good to be true",we will find that with their unique auction concept in place,it all fits together.The way the site works is that they allow their users to raise the price by maximum of 0.01 with each bid they place on a auction.There is small fee for every bid placed,currently between 0.40-0.60 USD depending on the Bid Package Purchased.They able to provide their members with some of the most incredible bargains online,run the site and provide free shipping.They also keep the amount of total outbids low,as there is clear,strong incentive to not bid pointlessly over other users,like what we may see on other traditional online auction sites.

Since their launch,they have sold much over 3200 ridiculous bargains and receive thousand of  new members on the sites.

For those reading this,which is not yet familiar with their auction work,here is a quick guide :

1. You purchase bids (this service fee gives you the right to bid and support the site.You buy them in packs.The bids are then loaded onto account.)
2. You bid on a item (once your bid is placed,the price of the item goes up by 0.01 and the auction timer resets to a predetermined time of  for example 15 seconds)
3. You wait for the time to run out (if nobody else outbids you within the time countdown,usually around 15 seconds then you win the auction)
4. You confirm your win.No need to pay the final price. (the item will be delivered to you  via courier internationally on from local retailers.

Credit to : http://www.sharkybids.info/

Quick Facts

Thinking of bidding in an online auction, or selling some of your stuff?Internet auctions are a great resources for shoppers and sellers, but you need to watch out for some pitfalls.Here's how :

• Evaluate how soon you need to receive the item you're bidding on, and whether you can tolerate it being delivered late, or even not delivered.Many complaints about internet auction fraud involve late shipments, no shipments, or shipments of products that aren't the same quality as advertised.
• Whether you're a buyer or a seller, read each auction site's Terms of Use before using it for the first time — sites may charge fees, follow different rules, or offer different protections.
• Carefully consider your method of payment. Learn what recourse you have if something goes wrong. Don't send cash, and don't use a money wiring service.
• Don't reply to "phishing" emails: messages that look like they've been sent by an auction website or payment service and ask for your password or other personal information.
• Know who you're dealing with. Avoid doing business with sellers you can't identify, especially those who try to lure you off the auction site with promises of a better deal. Confirm the seller's telephone number in case you have questions or problems.
• Know exactly what you're bidding on. Read and print a copy of the seller's description of the product closely, especially the fine print. Save copies of all emails you send and receive from the auction site or seller, too.

Rules of the Marketplace

How Internet Auctions Work

Role of the Auction Site. Most internet auction sites specialize in person-to-person activity where individual sellers or small businesses sell their items directly to consumers. In these auctions, the seller — not the site — has the merchandise, and often, the site will not take responsibility for any problems that may arise between buyers and sellers. Before using an internet auction site for the first time, buyers and sellers should read the Terms of Use, and review any information the site offers.

Registration. Most internet auction sites require buyers and sellers to register and obtain a "user account name" (or "screen name") and password before they can make bids or place items for bid. Keep your password to yourself. If you share it, another person could access your account and buy or sell items without your knowledge. That could damage your online reputation — and eventually, your bank account.

Fees. Some sites require sellers to agree to pay a fee every time they conduct an auction, whether the item is sold or not. Other sites charge a fee only when an item is sold.

The Auction. Many sellers set a time limit on bidding and, in some cases, a "reserve price" — the lowest price they will accept for an item. When the bidding closes at the scheduled time, the item is sold to the highest bidder. If no one bids at or above the reserve price, the auction closes without the item being sold.

Some auction sites allow sellers to set a price at which a buyer can purchase the item without competing with other bidders. A buyer can choose to purchase the item for the price the seller has set, without bidding.

After the Auction: Arranging to Pay and Deliver Merchandise. At the end of a successful auction, the buyer and seller communicate usually by email to arrange for payment and delivery.

source

http://www.onguardonline.gov/topics/Internet-auction.aspx#auctions