What is an Online Auction?

Malcolm Tatum
Malcolm Tatum

Online auctions are auctions that are conducted via the Internet. The most common structure for holding an online auction involves registering as a seller with one of the several Internet-based auction web sites currently in operation. With most applications, all aspects of a traditional auction are replicated in the procedure used by these online sites, including the winning bidder submitting a payment.

The online auction process normally begins with registering a particular item for auction.
The online auction process normally begins with registering a particular item for auction.

As with any type of auction, the online auction process normally begins with registering a particular item for auction. The seller sets a minimum bid that must be met in order for anyone to win the item up for auction. Bidding begins when a bidder logs at least this minimum bid, and continues until the auction closes. At the end of the online auction, the winning bidder submits payment using any of the options previously authorized by the seller, and the auctioned item is delivered to the winner, usually by post or a courier service.

Bidders can often rate sellers after winning an online auction.
Bidders can often rate sellers after winning an online auction.

Online auction sites today are sophisticated enough to allow sellers to promote their auctions to best advantage. Many sites offer the ability to include multiple electronic images of the featured item, with some also offering audio as well as visual descriptions that allow potential bidders to thoroughly investigate the item before placing a bid. Bidders can also view comments and ratings submitted by others who have won auctions held by the seller. This makes it possible to determine in advance how reliable the seller is in terms of responding to queries, correctly describing the items he or she offers for auction, and how quickly items are shipped to winning bidders.

Sellers can often set a specific duration for the online auction, with many set to run for a total of seven days. This usually gives registered bidders the opportunity to search through all the currently active auctions and find those they are interested in. However, there are several online auction websites that allow sellers to schedule a given auction for as little as forty-eight hours.

In addition to live online auctions that anyone can attend, there are also closed web sites that provide private auction services. Participation in these types of live online auctions is by invitation only, and includes a limited number of bidders.

The range of items that may be offered at the typical online auction web site is extremely diverse. Children’s clothing, household linens and appliances, vintage magazines, electronic equipment, and novelty items are among some of the most popular offerings. Even large ticket items such as real estate and vehicles can be auctioned in an online environment. Along with dedicated online auto auction sites, the larger general auction sites also allow cars, trucks and other types of motor vehicles to be posted for auction.

In terms of fees, the typical online auction site charges the seller a small fee for posting the auction, plus ancillary fees for any extra promotional services. A percentage of the winning bid is also assessed if the item does sell. However, if a particular auction fails to attract attention, the seller does not generally pay any fees on the back end.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Discussion Comments


@rundocuri- Another problem with using online auction websites is that some people get addicted to them and spend too much money on things they don't need. Online auctions are easy to use, and it is a lot of fun to bid on an item, pay for it, and have it show up at your door within a short period of time.

It is also very easy to get caught up in the excitement of bidding in an online auction, even on items that you may not necessarily need or want. These websites make shopping exciting, easy, and convenient, but don't go overboard!


It is important to keep in mind that if you are the winning bidder for an item on an online auction, you made an official contract to purchase that item. Sometimes, people who are new to auction sites bid on items and win them unknowingly, which can result in being barred from using the site or being pursued for payment of the item.

The best way to avoid this issue is to make sure you understand what online bidding is all about, and that you understand the terms of using any online auction website. Also, make sure that you definitely want to purchase an item before bidding on it, because you just may win it with your first bid.

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