Know your auctions: 5 different types of auction explained
If you are new to the world of auctions, you might be confused about some of the terminology being thrown around. In particular, you are likely wondering what you can expect from the various different types of auction being run in the UK.
This quick guide is here to help. Here, we give a rundown on five of the most popular and what they offer.
What are liquidation auctions?
This very common form of auction refers to a company that is about to enter liquidation selling off its key assets. You can expect anything and everything to be up for grabs, from unsold stock to furniture and property. If you are about to launch a new start-up, looking out for liquidation auctions in your industry can be a great way to pick up essential business items.
What is a reverse auction?
While most auctions consist of buyers attempting to outbid each other on items offered by a seller or sellers, the reverse auction works the other way around. Here, a number of sellers will attempt to outbid each other in order to attract a buyer, which will generally mean undercutting prices or adding more to the service or product they are offering.
What are police auctions?
As they go about their business investigating crimes and arresting criminals, the police department will confiscate a huge quantity of items. If nobody can legally claim this property, it ends up being auctioned off to the highest bidding member of the public. The cash raised will generally go back to the police force.
What are online auctions?
Right now, online auctions are probably the most popular form of auction in the world. On sites such as eBay, anybody with an account can act as a buyer or seller. The upside is simplicity and convenience. The downside is that some online buyers and sellers may abuse the accessibility of the system.
What is a salvage auction?
Insurance companies will regularly take possession of cars, bikes and other vehicles that, after suffering an accident or being misused, require repairs that cost more than their actual value. Rather than fix it, they will sell the vehicle off at a salvage auction. The main buyers here are scrapyards, though many car enthusiasts and hobbyists also look out for bargains on potentially interesting fix-up models at these events.
If you are keen to start buying and selling, it is essential you understand where the right place to go is for what you are after. Be sure you choose the auction that best suits your needs.