How to Bid in a Dutch Auction

By eHow Hobbies, Games & Toys Editor

Rate: (3 Ratings)

The Dutch auction is all about supply and demand. When a person has a number of identical items to sell, he can set a minimum price and possibly sell the whole lot using the Dutch auction. The buyer can benefit, too. He might end up paying less than his bid price!

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

Dutch Auction

Step1
Check the rules for the Dutch auction in which you wish to bid. Variations do exist!
Step2
Select the item you want, and look at the minimum bid, the bidding history and the closing time of the auction if you're bidding in an online auction.
Step3
Place your bid, giving the number of items you wish and the price you're willing to pay.
Step4
Raise your bid if others have already bid for the total number of items for sale or if others have bid more than you for all the items that are available for sale.
Step5
Wait until the closing bid is announced. The highest bidders will have purchased the items but will pay the lowest price bid for the number of items available.

A Variation

Step1
Check to see whether this is a Dutch auction in which the price will drop a specific amount at a specific time (determined by the seller) until it is sold.
Step2
Choose the item you wish to own and check the time it will go on the auction block, if relevant.
Step3
Read the rules of the auction - such as how much it will decrease in price and how often.
Step4
Determine the amount of money you wish to pay for this object.
Step5
Keep track of the item. Some auctions only offer a small quantity of an item for a period of time. Some auctions are as quick as two minutes per item, though some lower the price by a percent each day.
Step6
Purchase the object when it reaches the price you wish to pay, or wait for a better price, but remember, the first person to pay the asking price will own the object.
Step7
Make a note of the amount you paid for the object, shipping charges, date purchased, and auction house or Web site where you purchased it.

Tips & Warnings

  • Suppose a seller has three coin sets for sale. The third bidder (who bid more than the first and second bidders) bids $11 per set and asks for three sets. A fourth (and final) bidder bids $12 for one set. The fourth bidder gets a set for $11. The third bidder only gets two sets and also pays $11 per set.
  • Suppose that five people each bid $11 and each wanted one of the three coin sets. The three earliest bidders will each get a set.
  • If you want a specific number of items - for example, five - and do not win the right to buy all five (say, only four), you do not have to purchase the four. If you don't, then a person (or persons) who thought he had lost out can purchase the items.
  • Of course, the seller will not sell any for less than his minimum asking price.
  • This type of Dutch auction originated in the Netherlands and is an auction in reverse. How low will it go? This is the question you must ask yourself before you whip out your credit card and say charge it! You're counting on no one else buying the item before you place your bid.

Comments

| View All Comments
Flag This Comment

on 2/15/2008 I am trying to get my head around the Dutch auction of just two identical items.

What is to stop me from waiting till the end of the auction and then bid, say $100 for an item that is currently at, say $10?

Would I not then be able to buy the two items at the $10 amount?

View All

Post a Comment

POST A COMMENT

Request a New How-To Article

Looking for more How To information? Chances are there’s an eHow member who knows how to do what you’re looking to do. Submit an article request now!

eHow Article:  How to Bid in a Dutch Auction

eHow Hobbies, Games & Toys Editor

Related Ads

Hobbies, Games & Toys

Sentigen
Meet Nate Chang, eHow Expert eHow’s Hobbies, Games & Toys Expert.