Fox and Sons Auctions, Southampton
An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder. In economic theory, an auction may refer to any mechanism or set of trading rules for exchange.
There are several variations on the basic auction form, including time limits, minimum or maximum limits on bid prices, and special rules for determining the winning bidder(s) and sale price(s). Participants in an auction may or may not know the identities or actions of other participants. Depending on the auction, bidders may participate in person or remotely through a variety of means, including telephone and the internet. The seller usually pays a commission to the auctioneer or auction company based on a percentage of the final sale price.
English auction, also known as an open ascending price auction. This type of auction is arguably the most common form of auction in use today. Participants bid openly against one another, with each subsequent bid higher than the previous bid. An auctioneer may announce prices, bidders may call out their bids themselves (or have a proxy call out a bid on their behalf), or bids may be submitted electronically with the highest current bid publicly displayed. In some cases a maximum bid might be left with the auctioneer, who may bid on behalf of the bidder according to the bidder's instructions. The auction ends when no participant is willing to bid further, at which point the highest bidder pays their bid. Alternatively, if the seller has set a minimum sale price in advance (the 'reserve' price) and the final bid does not reach that price the item remains unsold. Sometimes the auctioneer sets a minimum amount by which the next bid must exceed the current highest bid. The most significant distinguishing factor of this auction type is that the current highest bid is always available to potential bidders. The English auction is commonly used for selling goods, most prominently antiques and artwork, but also secondhand goods and real estate. At least two bidders are required.
Uses for Auctions
Auctions are publicly and privately seen in several contexts and almost anything can be sold at auction. Some typical auction arenas include the following:
* The antique business, where besides being an opportunity for trade they also serve as social occasions and entertainment
* In the sale of collectibles such as stamps, coins, classic cars, fine art and luxury real estate
* The wine auction business, where serious collectors can gain access to rare bottles and mature vintages, not typically available through retail channels
* In the sale of all types of real property including residential and commercial real estate, farms, vacant lots and land.
* For the sale of consumer second-hand goods of all kinds, particularly farm (equipment) and house clearances and online auctions.
* Sale of industrial machinery, both surplus or through insolvency.
* In commodities auctions, like the fish wholesale auctions
* In livestock auctions where sheep, cattle, pigs and other livestock are sold. Sometimes very large numbers of stock are auctioned, such as the regular sales of 50,000 or more sheep during a day in New South Wales.
* In wool auctions where international agents purchase lots of wool
* Thoroughbred horses, where yearling horses and other bloodstock are auctioned.
* In legal contexts where forced auctions occur, as when one's farm or house is sold at auction on the courthouse steps.
* Travel tickets. One example is SJ AB in Sweden auctioning surplus at Tradera (Swedish eBay).