Dutch Auctions

posted August 09, 2003 07:45 AM
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I used "search." This was posted by RhinoBoy on June 12, 2003:

"I don't usually snipe dutch auctions because the timing of the bid is so important. Dutch auctions are more like those who get in line first win. The people who bid early get to place lower bids because of the bid increment requirements.

"Here is what I mean:
* There are 10 items for sale.
* Current bid is 1.00
* I figure the value of the product to me is 10.00
* I want 6
* There currently are 8 bids for 1.00 each.
* I bid 10.01 for 6

"Now why would I do that? Everyone keeps bidding at the lower level with the bid increment increasing at minimum increment. Now two things can happen:

* Bidding stops way lower than my 10.01. This is great for me because I get all 6 for the winning lowest bid. If the lowest bid is $2.00, I get 6 for 2.00 each. I have the highest bid so I get my 6 even if the 2.00 bidder wanted all 10.

* Bidding gets to the 10.00 range. I have an advantage because my bid was at that range 1st. If someone else bids 10.01 and wants all 10, I still get my 6 because I bid first. The other advantage is the bid increment thing. One time I didn’t bid early and the bid increment stopped me from bidding. Say in this case, the next available bid would be 11.00 and it wasn’t worth it to me. Everyone got theirs for 10.00 and I would have been one of them if I had bid earlier.

"Sorry if this gets confusing, I’m trying to be brief here for the sake of those who aren’t really interested. This strategy has been so successful for me that I deliberately search for dutch auctions. I find I get a much better deal because it requires having so many people willing to pay top dollar. That usually doesn’t happen."

Rsmiller40, please note that it's possible to set up a single snipe for multiple items in a Dutch auction by using the "Qty." window on the main page. However, RhinoBoy's advice is to avoid sniping on Dutch auctions.

Hope this helps you!

star,

This might give you some help:
>>> CLICK HERE <<<

Also, at the top of this page is "search". You could do a search on "dutch" and find other discussions as well, but this seemed to be pretty good.

OOPS - sorry star. I see Mrs. M is on top of things. My link is a repeat. On my first cup of coffee.

[This message was edited by Rick on October 18, 2003 at 04:31 AM.]

The only thing that I keep forgetting with dutch auctions is that everyone can see what I bid, lol!

Thanks for the info, when it's all explained properly like that it makes more sense.

With this auction there were 2 bids already on it, and when I put my highest bid in I think I cancelled out everyone else as I'm the only one showing as the high bidder now. I didn't expect that to happen.

I think also what makes it confusing is the auction is for 6 lots of 5 items - each win is for a bundle of 5. Well, it was confusing for me, anyway

Thanks again for your help!

Don't feel alone. I bid ONCE on a dutch auction and have never nor will never again...I don't think!

It sounds like someone is confused about Dutch Auction.. I am not sure if it is me or the other poster..

The way I thought it worked..

If you bid on 6 out of 10 items, then the current bid amount would remain whatever the next increment over the lowest winning bidders high bid is. So if bidder 1 bid 5@$5, the second bidder bid 1@6.50 and you bid 6@$10, then the minimum bid amount would be $5.25. If someone then came in and bid $10.01 for all ten, they would win all of them. The second bidder would not get any of them because he the high bidder bid on all of them. In the same scenario, if the last bidder had bid 10@$20.01 instead of $10.01, he would have still payed the $20.01 each no matter what the underbidder had bid.

I accidently put an item up as a dutch auction a few weeks ago with a quantity of three. I noticed the error right away, but I had three of them so I let it ride. The starting bid was $2 each. I had one bidder bid $8 each on all three, so the minimum bid shot up to $8.25 each even though there was no other bidder. This makes me believe my theory may be right.

So what I am trying to say, is you better bid early and low so you do not bid too high if you are going to take all of them, or if anyone above you forces you to take the leftovers for your high bid amount..

LOL

Okay.. It was me that was a little confused.. I thought in the example above that she bid $10 even..

But do remember what I said if you are planning on bidding on all of one item.. Some times you may end up spending a lot more than you need to.