Picking a Type of Auction and Key Features for Your Online Auction Website
Developing an online auction store requires understanding the critical aspects and nuances of creating a product in such a niche. Understanding the auction mechanism, monetization models of such sites, and user behavior is important. But before that, you should all decide which type of auction to choose based on your business theme.
English Auction. It’s one of the most popular online auctions, both online and offline. The English auction is also often called open or direct. This type of auction involves setting a starting minimum price and subsequent bidding. The price increases with each step, and bids are visible to all participants during the bidding process. The winner is the participant who offered the highest amount during the auction, which becomes the final one.
This type of auction is best suited for the sale of real estate, antiques, collectibles, cars.
Dutch Auction. Unlike English auctions, where participants gradually increase the price of their offer, Dutch auctions work with lower prices. During the auction, the price is automatically reduced until one of the participants stops this reduction. This will mean that he is ready to buy the lot for this amount.
The Dutch auction is not better or worse than other auction models. It is simply more efficient for a certain type of asset. First, it is difficult to determine the market price — the participants determine this price. Therefore, Dutch Auction is best for B2B wholesale auctions. This type of auction is also suitable for the sale of real estate.
First price auction. An auction where bidders can only place one bid and cannot see the prices offered by competitors. Their strategy is to try to predict the rates of other participants. The quoted prices must not be lower than the planned minimum, including creating the product. Typically, the first-price auction sells government contracts and properties, including companies.
Building quality and profitable online auction marketplace will take time and money. To justify your efforts, choose the right auction type from among the many options to suit your business and ensure that all the features you need are in place; we recommend the help of professional e-commerce developers.