Auctions work best when the assets are specified in greater detail. However, it is not always possible to provide detailed specifications for commodity items. One example is paper clips, which can be purchased in bulk via e-auction. This way, competition among suppliers can drive the price down. A good auction technique can improve your odds of winning.
A well-designed auction should strike a balance between discouraging collusion and cheating while maximizing revenues. The seller can make many changes in the way the auction is run, including the number of bidders, lot sizes, and bidding increment rules. While determining these details, you should be aware that each variation can have an impact on the outcome.
The more bidders in an auction, the greater the chance of a high price. However, the value of an incremental bidder decreases with each additional bidder. For example, a product with ten bidders will produce 85% of the revenue generated by 50 bidders. By contrast, an item with fifteen bidders will only generate about 15% of the revenue. This means that a bidder with more than fifteen bidders has a much smaller chance of winning and setting a higher price.
Modern auctions are often conducted online, and take place over several days. Estate agents and leading portals list properties for auction online. This option eliminates the stress of attending live auctions and gives prospective buyers a longer period to make their decision. Online auctions also enable maximum bidding and incremental bidding, which increase the sale price.