Education, Tech

How do online auctions work?

No, this is not just an older person thing.

words by: Natasha Marsh
Aug 31, 2022

I used to think silent and online auctions were for the elderly. They were the audience who were attending them and selling stuff to them. I mainly thought this because at the time as a young person, I believed they were the only ones that could afford such lavish furniture, art, decor, and antiques. However, I recently discovered a close friend of mine, my same age, has been online shopping at auctions for years. 


Buyers and sellers will host a wide variety of goods to trade and she finds these massive estate sales where she gets items at drastically low prices. It’s like a virtual flea market, sure it might take some time to dig through the lot, but in my friends experience it is worth it. It got me thinking, how do online auctions even work? With an endless range of products – sports memorabilia, computer systems, antique record players, furniture, celebrity-owned goods – how do people decide on their excess inventory or services and how does the receiving end decide what’s worth it and for how much?


My research shows that sellers can offer one item at a time, multiples of the same item, or a whole assortment of different items. Because you never see or touch the product, you have to rely on the collectional data the system is telling you. There will be winners and losers and you are expected to pay what you bid at the end of the auction. For online auctions, you are required to register for the series before you buy or sell something. This allows the organization to keep track of what you bid on or sell, determine who won, and build a database of feedback. Most bidders and sellers have separate email accounts for online auctions so they can keep track of everything in one place.


There are two types of online auctions: business-to-person and person-to-person. Business-to-person gives sellers the full control of physical merchandise and the ability to accept payment of goods or service. At person-to-person, sellers and small businesses offer items directly to consumers. Similarly, the seller is the one here who has physical possession of the merchandise. However, the main difference is the seller must deal directly with the highest bidder to arrange payment and delivery. Essentially, bidding happens at a scheduled time and the candidate with the highest bid is required to buy the items at the end. Once the winner is selected the buyer and seller will communicate via email to set up payment and delivery of goods or service. You can purchase items via debit or credit card, individual check or cashier’s check, money order, or hard cash.  In the event that no one bids the auction will close without a winner. Aka, there are no hand outs.  

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