Types of Auctions

There are several types of auctions, each with its motives and procedures. The two major types of auctions:

1) Forward Auctions: The sellers use as a selling channel to many potential buyers. Usually, items are placed at sites for auction, and buyers will bid continuously for the items. The highest_bidder wins the items. Sellers and. buyers can be individuals or businesses. For example, the popular auction site eBay.com is a forward auction.

2) Reverse Auctions: In reverse auctions, there is one buyer, usually an organization, which wants to buy a product or a service. Suppliers are invited to submit bids. Online bidding is much faster than conventional bidding, and it usually attracts many more bidders. The reverse auction is the most common auction model for large purchases (in terms of either quantities or price). Governments and large corporations frequently mandate this approach, which may provide considerable savings.

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