How to Bid in a Dutch Auction

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:

• Auction Catalogs
• Calculators
• Credit Cards
• Notebooks
• Pens

Dutch Auction

1. Check the rules for the Dutch auction in which you wish to bid. Variations do exist!
2. 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.
3. Place your bid, giving the number of items you wish and the price you're willing to pay.
4. 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.
5. 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

6. 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.
7. Choose the item you wish to own and check the time it will go on the auction block, if relevant.
8. Read the rules of the auction - such as how much it will decrease in price and how often.
9. Determine the amount of money you wish to pay for this object.
10. 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.
11. 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.
12. 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.