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What is an Auction?

An auction is a system of buying and selling goods or services by offering them for bidding—allowing people to bid and selling to the highest bidder. The bidders compete against each other, with each subsequent bid being higher than the previous bid. Once an item is placed for sale, the auctioneer will start at a relatively low price to attract many bidders. The price increases each time someone makes a new, higher bid until finally, no other bidders are willing to offer more than the most recent bid, and the highest bidder takes the item. An auction is considered complete when the vendor accepts the highest bid offered and the buyer pays for the goods or services and takes possession of them.

Although auctions are often considered synonymous with the sale of antiques, rare collectibles, and paintings, they are also used in investment banking. Investment bankers use auctions to attract the highest possible price when selling a company. The process starts by inviting multiple buyers to the auction. More prospective buyers usually translate to competitive bidding that pushes the price higher, enabling the bank to maximize its profit from the sale. In contrast, most buyers prefer proprietary sales over an auction because they can usually exercise more control over the purchase price.

History of Auctions

The origin of auctions can be traced back to approximately 500 B.C. in ancient Greece when women were auctioned off for marriage. During this period, it was illegal for women to get married without going through the auction process. The auctioneer started the sale with the woman who was the most beautiful among all the women being auctioned that day. The auction followed a descending pricing method, beginning with the highest price and going lower until the lowest bid was found, as long the bid price was more than, or equal to, the reserve price set by the seller. If the buyers could not get along with their new wives, they were allowed to recover their money.

In the United States, early auctions were used to sell farm produce, estates, and slaves. In the American Civil War, soldiers returning from war frequently sold their war plunder through auctions. However, the only soldiers who were allowed to sell the spoils of war were those holding a rank of colonel or higher. The business of auctioneering grew rapidly during the Great Depression when many people became bankrupt and, therefore, were forced to liquidate their assets. Auctions helped the individuals and businesses affected by the crisis to sell their assets quickly.

The need for qualified auctioneers prompted auctioneer Carey Jones to establish the first auctioneering school in early 1900. The school, located in Davenport, Iowa, was known as the Jones’ National School of Auctioneering and Oratory.

With the growth of technology in the 1990s, auctioneers started using computers, cell phones, and fax machines to increase the efficiency of their trade. Some auctioneers would take photographs of their items and project them onto big screens so that potential buyers could get a clear view of the items on sale. In 1995, eBay, the first online bidding site, opened in the United States, setting a new stage for the auctioneering business. Online auctions are popular with sellers because the huge number of potential bidders makes it easier for them to get a good price for virtually any item they have to sell. Buyers like having a wide range of products to choose from and being able to find just about anything they’re searching for to buy.

The Auction Process

Before the start of an auction, potential buyers are usually allowed a preview period to check the items on sale and examine their condition. The preview period may be announced as being on the evening before the day of the auction or a few hours before it starts. Once potential buyers are done viewing all the items and are interested in placing their bids, they must register with the auctioneer. The registration process requires the buyer’s details like phone number, address, and identification such as a passport or driver’s license number. Each registered bidder is given a bidder card with a number that is used to identify all participants.

The sound of a bell traditionally marks the beginning of an auction. The auctioneer gives a brief description of the item for sale and starts the bidding with a price that he/she considers a reasonable opening price. Alternatively, the seller may have set a minimum bid price that they will accept, and the bidding starts there. The bidders then call out their bids, with each bid being higher than the subsequent bid. The bidders lift up their bidder card to announce their bid price so the auctioneer can identify who is making the bid. The process ends when there are no more bids, and the buyer making the highest bid gets the item. The highest bidder takes ownership of the item immediately after paying their bid price.


The English auction is also known as an open outcry auction and is the most used type today. It is an open ascending price auction where participants bid against each other, with each subsequent bid being higher than the previous bid. The auctioneer announces the prices, and the bidders call out their bids until no participant is willing to bid higher. The process ends when the auctioneer accepts the highest final bid. This type of auction is commonly used for selling wine, antiques, tobacco, and art.

Dutch Auction

This is an open descending price auction where the auctioneer starts with a high asking price and lowers the bid until one of the bidders is willing to accept the auctioneer’s price, or when the seller’s reserve price is achieved. The goods for sale are allocated based on the bid order, where the first highest bidder picks their items, followed by the second-highest bidder, and so on until the order has been exhausted. Dutch auctions are used for perishable commodities such as flowers, fish, tobacco, and occasionally for investment securities.

In the first price sealed-bid auction, also known as a blind auction, all bidders submit sealed bids simultaneously so that no bidder gets to know the bid of their competitors. Each bidder can only submit a single bid and does not get an opportunity to change their bid price. In a buyer-bid auction, the highest bidder takes ownership of the item at their bid price, whereas in a seller-bid auction, the lowest “bidder” wins the right to sell their goods for the highest bid price accepted by a buyer. The first price sealed-bid type of auction is often used in government contract tendering, mining leases, military procurement, refinancing credit, and foreign exchange.

Second-price Sealed-bid Auction

The second price sealed-bid auction is similar to the first-price sealed-bid, except the highest bidder gets the item at the price of the second-highest bidder. For example, if the highest bidder won an auction with a bid of $500, and the previous high bid was $480, then the winning bidder only has to pay $480 for the item being sold.

In a seller-bid auction of this type, the lowest bidder sells the item at the second-lowest bid. This kind of auction is used in automated contexts such as real-time bidding for online advertising.


Bidder Bill of Rights

  • The right to view the item that is up for auction by actual pictures and descriptions online or in person or both. Actual Representation of any auction and/or service item is your right.
  • Understand what the payment terms are, their refund policy, the pickup policy, where the item/s are located for pick, can an item be shipped and what are the shipping charges, what are the pickup times, when will the item be forfeit on non-pickup and/or nonpayment and what is their bidder ban policy.
  • The auction company must notify you within your registered contact information of any type of change or removal of any listed item or service. This would include the right of the bidder to rescind their bid and rebid if the bidder chooses too.
  • Clear concise terms and conditions of the auction company and auctioneer with clear instructions on every procedure of their auction with an excellent contact detail including days and time for any bidder to be able to contact for any questions they may have.
  • Use our Forum to reach out to the Bid Safely community and express any and all concerns and get responses to the questions you may have.
  • Understand the Auction company and auctioneer Privacy Policy.
  • Know your rights regarding any auction house you bid at and should there be a perceived discrepancy know how to reach out to the auction company and then other solutions that will assure you that you have been treated in a fair and ethical manner.
  • The auctioneer and/or auction company must answer any questions a bidder may have within a reasonable amount of time and in a professional business-like manner.
  • As a bidder when you see the authorized and valid Auction Certified Seal on any auction website or their advertising materials where you are bidder you have the right to ensure that you are safely bidding. Auction Certified will on your behalf, the bidder will be represented by the company and reach out to and/or refer to external legal and consumer protection agencies to help you resolve any bidding issues you may have. Please follow the correct protocol procedures. Note that winner’s remorse, frivolous, unfounded, non-attempt to contact the auction company first with potential issues; and bidders who have not followed the procedures of the auction company within their terms and conditions as listed where bid/s have been placed cannot be represented in arbitration or referral to any other legal entities, law enforcement or consumer protection agencies. Bidders have solid enforceable rights as well as an obligation bidder responsibility.


This certifies that Every single Auction Company you’ll see here has gone through a vetting process. This proudly displays the AUCTION CERTIFIED SEAL and has gone through strict evaluation standards, so any bidder bids know that their bids are safe and secure. These certified Auction Companies have current valid business licenses, follow through business practices, accurate item photographs and descriptions with above average customer support.

  • Build Trust
  • Advertise Honestly
  • Held to a Higher Standard
  • Pass a 30 Point Selected Vetted Business Inspection
  • Excellent Bidder History
  • Maintain the Highest Business Standards
  • Quickly Respond to Bidder concerns
  • Solve to their best ability any issues that might arise
  • Tell the Truth
  • Be Transparent
  • List and Follow Their Terms and Conditions / Privacy Policy
  • Honor Promises
  • Be Responsive
  • Safeguard Privacy
  • Protect all financial transactions to their best ability
  • Integrity
  • Added Bidder Benefits because the Auction Company is an Auction Certified Auction
  • Pass Certification Every Year
  • Agree to third-party Arbiter who is empowered to judge or make determinations

Auction Certified Code
of Conduct

As a leader in advancing marketplace trust, Auction Certified sets high reasonable standards for business conduct. This code of helps ensure that all Auction Businesses share a commitment to an ethical marketplace.

For this to be successful and to accomplish its mission, this must include the employees, agents and contractors of the accredited auction house. An appropriate, expectation will be given to all Auction Certified members that they will demonstrate commitment to this code and ethical standards generally.


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ABSOLUTELY LOVE AUCTIONS CERTIFIED AUCTIONS. I bought my daughters first prom dress from an auction that had the AUCTION CERTIFIED seal. The dress was lovely, the size and description were accurate. I was not disappointed. Shipping was secure, packaged well and on time. Overall, my experience has been WONDERFUL!

Jan J. – Las Vegas, Nevada


I recently participated in an Auction Certified Auction selling firearms. The descriptions were accurate and the staff at that Auction were so friendly and helpful. The bidding goes fast. Know what you want and your max bid. It's easy to get caught up in the action. Also, bid as soon as possible. I missed one lot due to not being fast enough, my fault, not theirs. Shipping was a breeze FFL to FFL… All in all, great experience.

Leonard B. - Torrington, Wyoming

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