Trading of goods and services has been an important factor in sustaining the social structure system called human society. As long as there are different members in a system, there will always be interactions, and one of the many ways humans interact with each other is through trade. Even before creating a generally acceptable means of exchange, money, trading has existed in an ancient form known as trade by barter. Now, several means exist which people use to trade their goods and services. Auction is a not-so-common means of organized trading, it is a selling system plus buying goods and services by putting them up for bidding. That is, interested buyers are allowed to bid for these goods or services, plus this commodity is usually sold to the highest bidder.
An Auction system consists of three groups of participants, a seller who wants to auction their valuable, buyers who want to purchase this auctioned item, and a referee or auctioneer who serves as the middleman between the other two parties. This seller usually initiates the whole process, but before approaching any auction house, a seller must have a fair idea of what their possession worth. Valuation of an item to be auctioned, especially by a certified appraiser, puts a number on its worth. Although it is not a compulsory step to take, it is rather important in determining the appropriate value for the commodity.
The auction house should explain to an intending seller their conditions of sale, commission structure and discuss any ‘reserves’ that should be set. A reserve is the barest minimum confidential price below which an auctioned item will not be sold. The auction house normally announces an auction date, and a catalog that contains items that will be auctioned on that day is also made available to the public. Upon seeing a commodity on the catalog that piqued their interest, interested buyers should inquire when they are available for public examination. Before sitting for any bidding process, a buyer should make sure they know the value of these auctioned items. To take part in the live auction, buyers must register, which involves a record of some of the buyer’s personal information.
Customarily, the buyers are provided with a paddle that they can use to indicate if they want to bid during the auction processing. The auctioneer usually starts the auction by ringing a bell, and they go on to state a starting price which is usually relatively low. This is done to attract many bidders, the price will continue to increase progressively until there is the highest bidder. An auction is declared successful when the vendor accepts the highest bid offered, plus the bidder pays for the item and takes possession of it.
Usually, this highest bid is nullified if it is lower than the item’s reserve price. Auctioning is by far the most exciting and yet intimidating way to purchase something you desire at a fair market price. Although its process may seem a bit extravagant plus complex, it is worth the stress.