Online Auction Terms You Need To Know
Most of the time, first-time bidders for online auction get confused with various online auction terms. Read the article so that you can be crystal clear with all the online auction terms.
Most often when people participate in the online auction for the first time, get confused with the terms used by other experienced bidders. Experienced bidders are well versed with all the phrases, so they keep using it without any issues. But this is not the same with beginners. In order to make yourself feel comfortable with the terminology of the online auctions, we bring you a comprehensive list. The list comprises of all the important terms that are usually used in the online auction.
Bid – An offer or a price value placed by the bidder in order to buy the product. As the online auction progresses, different bidders place their bid until the end of the auction.
Absentee bid – When you place a bid in advance and allow the bidder to be the part of the online auction with being actually present is called Absentee Bid. It is one of the strategies that bidders employ in order to win the online auction.
Bid Increment: It is actually the interval pace when an auctioneer increases the bidding price. The bidding price would be usually incremented by 10 or 15%.
Block Bidder: The term is used to refer to the action that prevents a particular bidder from actively participating in online auctions. This request is generally raised by the sellers who are not comfortable with the bidder.
Backup Bidder: When the winner is unable to complete the transaction due to some or other issues, then the product goes to the second-highest bidder. Therefore, they are called backup bidders. The opportunity goes to the backup bidders.
Bidder Number: It is the specific or unique identification number that is provided to all the participating bidders on registration. It is helpful in identifying the bidder throughout the auction.
Buyer’s Fee / Buyer’s Premium: In order to determine the final price of the products, a percentage of the highest bid is added to the actual bid amount of the product. The percentage added as a buyer’s premium can vary. Different online auction sites have different rules for buyer’s premiums.
Bid History: As the name suggests, you can get a list of all the bids that are being made during a particular auction. It helps in maintaining a record of each and every bid that is placed by different bidders.
Escrow: It is basically a legal arrangement provided by the online auction authorities to securely hold all the deposits of the bidders (people who have registered to the website in order to participate in various online auctions).
Commission: It is referred to as an amount paid by the consignor to an online auction website or auction house or gallery in the form of a deposit. It would be deducted from the price of a product or commodity sold. Generally, the online auction would deduct the commission on the basis of the final bid price of the product.
Conditions of sale – The Condition Of Sale term is used to refer to the terms and conditions provided by the online auction sites. These conditions govern the entire online auction process and the final sale. The conditions of sale are generally published well in advance of the sale so that the bidders are aware of it.
Fair Market Value – It refers to the price or rate of the product at which sellers and buyers agree to exchange commodities. The most important point to note is that the Fair market value is based on the buyers’ willingness to purchase, not the sellers’ expectations.
Opening Bid: Among all the bidders participating in the online auction, the very first bid offered by one of them for the product is called the opening bid.
Sealed Bid: It is basically a method of conducting online auctions where the participating bidders submit confidential bids that would be opened at a predetermined time.
Grading: Grading refers to the procedure that helps in determining the physical condition of a product or commodity. Different products employ different grading systems.
Tie bids – Tie bid refers to the scenario where two bidders bid the same amount. In such cases, the entire credit for the bid would be given to the bidder who had placed the bid first (online auctions records can be checked). Generally, the situation of a tie bid and the conditional related to it are always mentioned in the online auction “terms and conditions”.
This is a comprehensive list of all the important as well as common terms of the online auction. By understanding these terms, you would find it easy to participate in the online auction.
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