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By Christian Stoddart

This post is part of our ‘auction strategy’ series in which our in-house auction mastermind, Christian Stoddart, will reveal some of magical secrets and tips.

Hi guys!

It’s Christian here- CF’s managed events specialist. Over the next few months I will be writing a series of blog posts about auction strategy and how to make the best use of CF technology to bring you benefits. This week’s post is going to be just a basic introduction to each of the different types of auctions, in later weeks we will go into greater detail about some of the subtleties of each of the auction types and when best to use them but for now a brief description feels more appropriate.

There are essentially three auction archetypes – The English Auction, The Japanese Auction and The Dutch Auction – variations occur throughout the world but at the most basic level their core reverts to one of these:

The English auction – this is the most widely known type of auction, made famous the world over by the auction houses like Sotheby’s and Christie’s. In this auction bidders submit their own prices against each other in an attempt to take the lead with the participant in the lead at the end of the auction winning the business. The auction is flexible allowing for rule changes to take place over the course of the auction, it is also well known and the concept is simple to grasp. The English auction enables the participants to name their own price and increase or decrease this as their needs require – this makes the auction very participant friendly as it gives the participant control over how the event runs and what prices they wish to submit. However as an English auction is driven entirely by inter-bidder competition the final price for the auction is only ever the second best bidder’s final price and does not reflect the price that the winner would have been prepared to pay.

The Japanese auction – this auction type has its basis in the Japanese fish markets, here an auctioneer gives a group of participants a price which the participants are asked to agree to, those that accept the price enter the next round where the auctioneer offers them another raised/lowered price which the remaining participants are asked to accept and so on. If the price offered reaches a point that the participant is no longer comfortable with then participant does not accept the offered price and drops out of the auction. At the point where no participants are willing to accept the price offered the auction ends. This auction can be a great way to determine what the actual best price for a product is, especially when competition between bidders would not have produced the desired results.

The Dutch auction – this auction type has its roots in the Dutch flower market and the sale of tulips in the 17th century, in this auction the auctioneer starts by offering the product at an exceedingly high/low price and gradually brings it to a more reasonable amount until one participant is happy to accept the price offered, at this point the auction ends and the bidder gains the product. This auction type only allows one participant to win and will end as soon as the first participant accepts the price offered, it is the most limited auction type but can be extremely effective in certain circumstances.

So there they are- the three auctions that are at your disposal as a CF user. In later weeks I will explain to you the strategies for maximising their effectiveness and how to create some really potent managed events.

Christian Stoddart
About Christian Stoddart
I’m a bit of a magpie really – I like all shinny things. I have green fingers and I’m rarely happier than out in the garden on a sunny day. I’m also passionate about cats, films, games and pretty much anything trivial, useless or nerdy.