Over the years, eBay has introduced several diverse auction types, with the objective of giving people more options when they buy and sell their goods on eBay. For every merchant who doesn't like the idea that their product might be sold too cheap, there are several others who wants to distribute hundreds of the aforementioned item quickly. eBay tries to satisfy all these requirements. This article gives you a brief overview of the several kinds of auctions and their characteristics and advantages.
These are the base auctions of eBay, the auctions everyone knows: buyers place an offer, other buyers outbid them, the cycle repeats, and the winner gets the object. It's as easy as that, yet it's very effective.
Fixed Price (Buy It Now) and Best Offer
Buy It Now Option can be used in two ways:
- You can add a "Buy it Now" button to a Normal Auction. This means that buyers can either choose to bid normally or to just pay the asking price and get the item immediately. Note that, if a bid is placed and it reaches the Reserve Price (if specified), then the Buy It Now option disappears from the auction.
- Some sellers recently started to skip the auction option altogether and just list all their goods at fixed price. This allows them to avoid all the complications of the Normal Auctions, effectively turning eBay into a virtual version of a real shop.
eBay also added a further option to Fixed Price Auctions, called "Best Offer". This feature allows buyers to contact the seller to negotiate a price for the item, which is a convenient way sell extra stock at a discount.
Reserve Auctions are for traders who don't want their to sell their items for less than a certain price. A concept you'll know if you're familiar with real auctions. They work just like normal auctions on eBay, except that the client will be told if their bid does not meet the reserve price set by the merchant. In this case, buyers will need to bid again if they want to buy the item. If no-one is meeting the minimum sale price, then the auction is cancelled, and the seller keeps the goods.
The flexibility given by Reserve Price and Fixed Price Auctions comes with the downside of an extra fee associated with them. As a rule of thumb, it's recommended to use Reserve Auctions for higher-priced items and Fixed Price for lower-priced ones. However, in case of need, the two options can be used together.
Multiple Item Auctions, or "Dutch Auctions"
These are listings where a merchant can sell several units of a certain item at the same time. Buyers place an offer and declare how many items they want to purchase; when the auction is over, every buyer pays the lowest price that was offered by one of the winning bidders. Don't worry if you find this mechanism complicated; it's not very intuitive and requires some experience to master it. However, this type of auctions are uncommon, and, as a beginner, you can safely ignore them.
A more common option, when a merchant has many identical items to sell, is to list them using a Multiple Items, Fixed Price Auction. In this case, seller just states how many items they have, and list at a fixed price per unit. Buyers indicate how many items they want to buy and just buy them straight away.