Tuning Into Types of eBay Auctions

An auction is an auction is an auction, right? Wrong! eBay has five types of auctions for your selling pleasure. Most of the time you'll run traditional auctions, but other auctions have their place, too. After you've been selling on eBay for a while, you may find that one of the other types of auctions better suits your needs.

Traditional auctions

Traditional auctions are the bread and butter of eBay. You can run a traditional auction for 1, 3, 5, 7, or 10 days, and when the auction closes, the highest bidder wins. You begin the auction with an opening bid, and bidders will bid up your opening price into a healthy profit for you.

Dutch auctions

When you've purchased an odd lot of 500 kitchen knife sets or managed (legally, of course) to get your hands on a truckload of televisions that you want to sell as expeditiously as possible, the Dutch (multiple item) auction is what you'll want to use. In the Dutch auction, which can run for 1, 3, 5, 7, or 10 days, you list as many items as you'd like, and bidders can bid on as many items as they'd like. The final item price is set by the lowest successful bid at the time the auction closes.

For example, suppose you want to sell five dolls on eBay in a Dutch auction. Your starting bid is $5 each. If five bidders each bid $5 for one doll, they each get a doll for $5. But, if the final bidding reveals that two people bid $5, one person bid $7.50, and another bid $8, all five bidders win the doll for the lowest final bid of $5.

Here are some details about Dutch auctions:

The listing fee is based on your opening bid price (just like in a traditional auction), but it's multiplied by the number of items in your auction to a maximum listing fee of $4.80.

The final auction value fees are on the same scale as in a traditional auction, but they're based on the total dollar amount of your completed auctions.

When bidders bid on your Dutch auction, they can bid on one or more items at one bid price. (The bid is multiplied by the number of items.)

If the bidding gets hot and heavy, rebids must be in a higher total dollar amount than the total of that bidder's past bids.

Bidders may reduce the quantity of the items for which they're bidding in your auction, but the dollar amount of the total bid price must be higher.

All winning bidders pay the same price for their items, no matter how much they bid.

The lowest successful bid when the auction closes is the price for which your items in that auction will be sold.

If your item gets more bids than you have items, the lowest bidders are knocked out one by one, with the earliest bidders remaining on board the longest in the case of tie bids.

The earliest (by date and time) successful high bidders when the auction closes win their items.

Higher bidders get the quantities they've asked for, and bidders can refuse partial quantities of the number of items in their bids.

Reserve price auctions

In a reserve price auction, you're able to set an undisclosed minimum price for which your item will sell,thereby giving yourself a safety net. Using a reserve price auction protects the investment you have in an item. If, at the end of the auction, no bidder has met your undisclosed reserve price, you aren't obligated to sell the item and the high bidder isn't required to purchase the item.

For example, if you have a rare coin to auction, you can start the bidding at a low price to attract bidders to click your auction and read your infomercial-like description. If you start your bidding at too high a price, you might dissuade prospective bidders from even looking at your auction, and you won't tempt them to even bid. They may feel that the final selling price will be too high for their budgets.

Everyone on eBay is looking for a bargain or a truly rare item. If you can combine the mystical force of both of these needs in one auction, you have something special. The reserve price auction enables you to attempt — and perhaps achieve — this feat.

The fees for a reserve price auction are the same as those for a traditional auction with one exception. eBay charges between $2.00 and $100.00 for the privilege of running a reserve price auction. If the reserve price is $200.00 or more, the reserve price fee is 1% of the reserve price (with a maximum of $100.00). When your item sells, you get that money back.

The reserve price auction is a safety net for the seller but often an uncomfortable guessing game for the prospective bidder. To alleviate buyer anxiety, many sellers put reserve prices in the item description, allowing bidders to decide whether the item will fit into their bidding budgets.

You can't use the reserve price option in a Dutch auction.

Restricted access auctions

eBay won't allow certain items to be sold in nonrestricted categories, so you must list them in the Adult Only area of eBay. eBay makes it easy for the user to find or avoid these types of auctions by making this area accessible only after the user enters a password and agrees to the terms and conditions of the area.

Items in the Adult Only area are not accessible through the regular eBay title search, nor are they listed in Newly Listed Items.

Anyone who participates in Adult Only auctions on eBay, whether as a bidder or a seller, must have a credit card on file on eBay for verification.

Do not attempt to slip an adult only auction into a nonrestricted category. eBay doesn't have a sense of humor when it comes to this violation of policy and may relocate or end your auction. eBay might even suspend you from its site.

Private auctions

Bidders' names are often kept private when dealing in the expensive fine art world. Likewise, to protect the innocent, eBay private auctions don't place bidders' names on the auction listing. No one needs to know just how much you choose to pay for something, especially if the item is rare and you really want it.

As a seller, you have the option (at no extra charge) of listing your auction as a private auction.

The private auction is a useful tool for sellers who are selling bulk lots to other sellers. It maintains the privacy of the bidders, and customers can't do a bidder search to find out what sellers are paying for the loot they then plan to re-sell on eBay.

A great option for sales of items that are a bit racy or perhaps for purchases of items that may reveal something about the bidder, the private auction can save you the potential embarrassment associated with buying a girdle or buying the tie that flips over to reveal a racy half-nude female on the back.

Although the private auction is a useful tool, it may intimidate the novice user. If your customer base comes from experienced eBay users and you're selling an item that may benefit by being auctioned in secret, you might want to try this option.