Auction eCommerce

Auction Types in eCommerce: How Different Types of Auctions Work

Updated   |  12 min read
Key Takeaways:
Determine Your Options

First, decide which type of auction you'll have on your site. Go by your business model, what you'll include in the online auctions, and other factors.

Customize Your Platform

Tailor your auction eCommerce platform to your chosen auction type. Experienced developers can help you do that.

Make a Long-Term Plan

Think in the long term by getting a platform that's customizable for now and the future, so you can scale your business without having to change systems later.

Choosing eCommerce Auction Types for Your Platform

Auction eCommerce platforms often have multiple types of online auctions, and each can have its own subdomain within the platform.

Different kinds of auctions in eCommerce are more suited for certain situations and businesses. For bidders and auctioneers, the type of auction that is best depends on what they hope to buy or sell and what strategies best fit that goal.

Community guidelines or governance of the auction website also help determine which type would work best for each situation. Some of the best online auction software includes eBay, Sotheby’s, and Each type of auction website has its own set of rules and procedures for bidding and winning a bid.

To summarize, here are the factors that influence which type of auction to use:

  • Why you're participating in, holding, or facilitating an auction and how you'd like to do that.
  • Your business model and specializations.
  • What you’re hoping to buy or sell.
  • The strategies that best fit your goals.
  • The auction platform governance or community guidelines.
A reserve auction can take place on an online auction with a minimum bid.

How Do Different Types of Auctions Work?

There are many different types of online auctions. In this article, we'll go over each one, describing what they are and how they work.

Or perhaps you'd like to see how these different auction types work in an actual platform. If so, then go ahead and click the button below to get a free demo of our auction software. We'd be happy to show you all the ins and outs, answer your questions, and let you see for yourself just what an auction eCommerce platform can do.

In the meantime, read on to learn more about the types of auctions you can deploy and optimize for in your auction platform.

Online auctions may make use of a minimum bid.

English Auction

The English Auction, also called the Open Ascending Auction or the Open Outcry Ascending Auction, is one of the most common types of online auctions. English auctions are live auctions, meaning that bids happen in real time. This type of auction can be conducted online or in person, with the online English auctions lasting much longer than the in-person ones.

In an English auction, only one item is put up for sale at a time. The auctioneer starts out by presenting an opening bid, or a starting bid, for the item, which can be zero or greater than zero. If the starting bid is accepted, bidders present their bids, with each bid amount being higher than the last.

Typically, there’s a requirement on the size of the increase of the bids, called a bidding increment. The highest bidder wins the auction when no one will bid a higher amount within the time allotted. The winning bidder then gets the auctioned item at the price of their standing bid.

In the situation that none of the bidders accept the starting or opening bid, or in other words, no one bids at or above the starting price, one of a few things can happen. The auctioneer may start lowering the starting bid in increments until someone makes a bid, or they allow bidders to bid prices lower than the starting price. Or, depending on what the bids are and what the auctioneer wants, they may not sell the item at all.

What makes English auctions unique is the "open" aspect (hence the other name, open ascending auction). Bidders make their bids openly, so all bidders are aware of who makes each bid. Additionally, bidders get to revise their bids (or make new bids that override old bids) as the auction goes on.

Variations to the English auction also exist. In the traditional English auction, bids are called out. In other types of English auctions, bids can be made with signals instead, such as raising a bidding paddle or nodding one's head when the auctioneer looks at them. Another variation called bid jumping involves placing a bid that's higher than the next bid increment. Lighthouse bidding involves raising a bidding paddle and keeping it raised, indicating you'll continue bidding indefinitely to win the auction.

Each method of bidding for English auctions has its pros and cons. If you're looking to develop an auction eCommerce platform with English auctions, which variation(s) you'll want to allow on the platform will depend on your business model.

Recap: English Auctions

English auctions are also called open ascending auctions because bidders make bids openly in front of other bidders and bids ascend, or increase, during the course of the auction.

Penny Auction

The Penny Auction, aka Bidding Fee Auction, is another popular eCommerce auction type. In this type of auction there is a fee in order to bid, and it’s often a penny or sometimes up to a dollar. There’s also a time limit in which bids must be placed, and after that time limit is up, the highest bidder pays the final bid price and wins the item.

The final bid price is usually lower than the actual value of the item, but each bidder pays for the bids placed, not just the winner. Basically, since everyone chips in to pay for the item by paying for bids placed, the winner receives the item for a low price, and the seller typically receives more than the value of the item.

There will often be expensive items like electronics and cars in penny auctions. For example, when someone gets the winning bid, they may only pay a couple thousand for a car instead of fifty thousand. But the seller, which may be an individual or a business, by getting payments for every bid placed, ends up making a lot more than the car itself actually costs.

This is a compelling model, and it works well for businesses that are good at promotion and getting a lot of people to interact with the auction website. Both English and penny auctions require a certain amount of traffic and users in order for them to work. There has to be enough interest, or the auction can become detrimental to the seller.

For bidders, there's a risk you won't win the item even after placing numerous bids. If you don't win the item, you still have to pay for the bids you placed, and there's no way to get that money or time back. In addition, if you bid too much on an item trying to win, you can end up paying more than you should. Penny auctions are actually a lot like gambling, since you don't know what the outcome will be while you're investing into it.

However, some penny auction websites have a Buy-It-Now option, which allows bidders to forgo the bidding process and buy the product at retail value. Depending on the site, the money you used to pay for the bids may count towards the Buy-It-Now price.

Recap: Penny Auctions

Penny auctions are auctions where bidders must pay a fee in order to bid. If done right, the winner pays a price lower than the retail price for the item, and the auctioneer gets more than the retail price.

Dutch Auction

The Dutch Auction, aka Open Descending Price Auction, starts with a high asking price. The price then decreases incrementally until someone is willing to buy at that price. Whoever is willing to buy at the highest price first wins the auction. In this way, Dutch auctions avoid bidding wars. This type of auction is also basically the complete opposite of the English auction.

Oftentimes, this type is used when items are being sold in bulk or there's several items being auctioned off. If the first bidder doesn't purchase all the items, the price continues to decrease for the remaining items until all of them are claimed or the auctioneer's reserve price is met.

In some variations of the Dutch auction, the bidders bid on the items in the lot and select a number of items that they won in sequential order. This means that the first highest bidder selects the items they want and then the second highest bidder collects their items, and so on. The items available are on a first-come, first-serve basis.

In another alternate version of the Dutch auction, the winners pay the last price for the items they bid on, rather than the price they originally bid. This is an interesting approach that can work well for certain types of products, like perishable goods that come in large quantities.

A third variation of the Dutch auction involves making a bid and specifying what you're willing to buy in terms of quantity and price. The final price is the highest bid or the most common bid. This type of Dutch auction is often used in financial markets to sell things like floating-rate debt instruments and Treasury securities.

Recap: Dutch Auctions

Dutch auctions have a high starting price, and the price is dropped incrementally until someone makes a bid. The first bidder wins the auction, though sometimes there can be second and third winners as well.

Japanese Auction

The Japanese Auction, also called the Ascending Clock Auction or Japanese Forward Auction, starts with a low initial price, which is either zero or the auctioneer's reserve amount. Once bidders join the auction, the price goes up incrementally until there is only one bidder left in the auction arena. When bidders are no longer willing to pay the price presented, they leave or opt out of the auction, forfeiting their claim to the item. The last bidder standing wins the item and pays the displayed amount.

In another version of the Japanese auction, called the Japanese Reverse Auction, the price starts high and decreases continuously, similarly to the Dutch Auction. In this type of Japanese auction, however, it’s the suppliers, rather than the buyers, who are trying to win the auction.

Suppliers opt out when the price is too low for them to do business. The last remaining supplier wins, and the buyer pays for the item or service at that price from the supplier.

The Japanese reverse auction is useful when you want to know the lowest price suppliers in the industry are willing to do business at, and when you have many suppliers but few buyers.

With both variations of the Japanese reverse auction software, there's the idea of opting out when the price goes beyond what you're willing to accept.

Recap: Japanese Auctions

Japanese auctions, depending on the variation, start at a low or high price, which is then increased or decreased incrementally until all but one bidder have opted out of the auction. The last bidder remaining wins the auction.

Reverse Auction

In the Reverse Auction, also called a Buyer-Determined Auction or a Procurement Auction, the roles of the buyer and seller are reversed from the typical auction format. It's the sellers, rather than the buyers, who make bids in a reverse auction.

Here's how reverse auction websites work:

  • A buyer puts out a request for a good or service, or a request-for-quote.
  • Sellers make bids for the price at which they are willing to provide that good or service.
  • Bid amounts typically decrease as sellers underbid each other.
  • The winner is the seller that the buyer chooses to contact for the job. Usually it's the seller willing to accept the lowest price, but sometimes a buyer might contact a seller who offered a higher price depending on what they need and what they think the seller can deliver.

Reverse auctions are helpful for buyers who want to get bids from different sellers at competitive prices. Oftentimes, reverse auctions are used by large corporations and government entities to get things like raw materials, supplies, and accounting and customer services at a lower cost. The Japanese reverse auction is also a variation of the reverse auction.

With online reverse auctions, or Reverse eAuctions, sellers from different locations can connect with buyers and participate in the auction in real time. Reverse eAuctions are one of the most commonly used types of online auctions. This type of auction is also typically used for B2B auctions and government procurement auctions.

When the reverse auction involves businesses as both the buyer and the sellers, it's also called a B2B Reverse Auction, Sourcing Event, B2B procurement, or other form of eProcurement. These types of reverse auctions are often open auctions, meaning that bidders know what bids the others are making. When sellers can see where they stand against other bidders, they can adjust and interact with the buyer to determine what the price should be.

This is different from a Sealed Reverse Auction where sellers can only make one bid and they don't know what the other bids are or who made them. This method allows sellers to present what they consider to be the true cost of their goods or services upfront and prevents artificial lowering of prices. This is a good auction type for sellers who are more concerned with getting paid the right amount rather than getting every deal.

In a reverse auction or reverse eAuction, sellers want to give the buyer what they want, and it can be challenging to govern correctly because some people might low-bid everything and not provide a quality product.

To make sure the reverse auction website is effective, there needs to be constraints on how it will go. There also needs to be a way to ensure the validity of the sellers and the quality of the suppliers' goods and services. It’s crucial to be able to offer this governance and workflow within your auction eCommerce platform so that it can self-govern to a significant extent.

Reverse eAuctions work best when a business needs to buy items in bulk, or with government contracts for a project. This type of auction doesn’t work for expensive or unique items like antiques or jewelry because there need to be numerous sellers who offer similar products or services.

A first-price sealed bid auction for the highest price.
Recap: Reverse Auctions

Reverse auctions are when the sellers make bids instead of the buyer. Sellers bid on the price they are willing to accept for providing a good or service requested by the buyer. The buyer then chooses a seller to make a contract with, usually the seller who makes the lowest bid price.

Sealed Bid Auctions

The Sealed Bid Auction, also called the Sealed Envelope Auction, doesn't allow bidders to know what others bid; they can only see if their bid won or lost. Sealed bids are also called Blind Auctions. There can be several rounds or just a single round of bidding, depending on the type of sealed auction.

If there's only a single round of bidding, it's known as a First-Price Sealed Bid Auction. Bidders are only allowed to bid once and they only know their own bid, not what others bid. Bidders also place bids simultaneously. The bidder with the highest bid price wins the auction.

In other types of sealed bids, bidders might get additional feedback on their bid, such as the rank or relative position of their bid compared to others. A sealed bid auction can also allow bidders to see other bids after they have made their bid.

Sealed bid auctions are common with large and expensive items and for government contracts. Depending on the type of sealed bid auction, there could be bids from multiple suppliers and a single buyer or there could be one supplier selling to many potential buyers.

When there’s multiple rounds of bidding in a sealed bid, bidders in real property auctions make an offer and go through another round where lower offers get eliminated. There’s often a fear of missing out or a “I have to have this” thinking that can benefit the seller. Similarly, with a sealed reverse auction, it can benefit the buyer when the seller is looking at a potential deal they can make. The seller realizes that if they don’t get their price down low enough, they might lose this buyer.

Auctions are a powerful incentive for people to offer competitive bids. When there’s enough interested users interacting with real property auctions, it creates a strong upward or downward force on the price depending on the type of auction.

Recap: Sealed Bid Price Auctions

Sealed bid auctions are the opposite of open auctions because bidders don't know what others bid or who else is bidding. Bids are given at the same time and whoever bid the highest amount wins the auction.

Vickrey Auction

The Vickrey Auction is a type of sealed bid auction, aka the Second-Price Sealed Bid Auction. The winning bidder pays the second-highest bid price instead of the price of the winning, or highest, bid. The Vickrey auction is also called the William Vickrey auction, because it was designed by William Vickrey.

This is the type of auction used on eBay, and many penny auction sites use a similar method as well. Sometimes the price the winning bidder pays is the second-highest bid price plus the bidding increment.

In a Vickrey auction, since it is a sealed bid auction, bidders don't know the bids of other bidders. Due to its design, Vickrey auctions incentivize bidders to bid the true price of a good or service. However, like all sealed auctions, it doesn't allow for the valuation of price if the bidder isn't sure of the market value of their offering.

The Vickrey Reverse Auction is used when sellers are bidding for a contract with a buyer. The seller who bids the lowest amount wins the auction, but the buyer pays them the second-lowest bid price.

The Vickrey Reverse eAuction refers to the online version of the Vickrey reverse auction, and the Vickrey eAuction is another name for the online version of the Vickrey auction.

Recap: Vickrey Auctions

In a Vickrey auction, the winning bidder is the one who bid the highest amount, but they pay the second-highest bid amount instead.

Need Help Setting Up Your Auctions?

At Clarity, we offer consultation services as we help you develop your project. Our experts will help ensure your auction platform succeeds. Get in touch with us for a free discovery session, where we'll go over your business's needs and help you find the right solution.

Real Estate Auction

In a Real Estate Auction (or Real Property Auction) bidders make bids with limited knowledge of the property they are bidding on. This makes it risky to buy a house at an auction—you might get something great, but you might get something that's basically falling apart. Sometimes potential buyers will get to view the property beforehand, so if you don't want to risk losing money on a property, it's best to stick with auctions that allow you to do that. It's also a good idea to check for claims, liens, and occupants before you bid in a real estate auction.

An advantage to real property auctions is that you'll often have less competition for buying a home this way rather than through traditional means. However, the competitors you will have will often be experienced investors or home renovators, rather than someone simply looking to buy a house to live in.

Due to the risk involved with real estate auctions and the types of competitors you're facing as a bidder, it's important to make sure you understand and are well-educated on how real estate auctions work and are as informed about the potential property as possible.

How does a real estate auction work? First, bidders register and make a (refundable) deposit of 5-10 percent of the property's expected selling price to the auctioneer. Winning a real estate auction can go a couple different ways:

  • Lender Confirmation Auction – The lender or auctioneer can accept the bid of anyone in the auction, even if they aren't the highest bidder.
  • Absolute Auction – The bidder with the highest bid amount (winning bid) gets the property.

The starting price of an auction for real property can be the balance owed on the mortgage or lower. There are two different types of real property auctions: Foreclosure Auctions and Property Tax Default Auctions.

Foreclosure auctions take place when the homeowner hasn't paid the mortgage in a few months nor after the bank files a notice of default with the county recorder, and they didn't renegotiate the mortgage with the lender. The homeowner is forced out for nonpayment and the auction is held by a bank trustee. In this type of real estate auction, the lender isn't allowed to make a profit from the auction; these properties are often sold at a loss. If there is a profit, it goes to the foreclosed homeowner after the mortgage is paid.

Property tax default auctions happen when the homeowner doesn't pay their property taxes. The unpaid tax authority seizes the property, and the auction is held by a local sheriff or clerk or the county/local tax authority's comptroller's office.

Recap: Real Estate Auctions

There are two types of real estate auctions: foreclosure auctions and property tax default auctions. These real property auctions are riskier than buying a home the traditional way because bidders often only get limited knowledge about the property in question. Bidding competitors are often experienced investors.

Reserve Auction

The Reserve Auction, also known as the Minimum Bid Auction, is an auction type where the auctioneer pre-determines the lowest price they are willing to sell at. This is known as a reserve price or minimum bid. If the highest bid doesn't meet or exceed the reserve price, the item isn't sold. In other words, auctioneers can put a reserve price, or a minimum bid, on items that they want to sell for at least X amount.

The price in a minimum bid auction is usually made known, except in the case of a Hidden Minimum Price. In a minimum bid auction, when the bidding reaches the minimum amount, the property is sold to the highest bidder. The purpose of a minimum bid auction or reserve auction is to create a safety net for the auctioneer.

What's interesting about reserve auctions, aka a minimum bid auction, is that the auctioneer can accept or reject the highest bidder's bid—or they can even counter the winning bid. They typically make this decision before the auction ends, and in some cases, they only have a certain amount of time in which to do so.

Reserve auctions protect the seller from too-low bids, especially if the value of the item may not be obvious to the untrained eye.

One disadvantage for reserve auctions, though, is that it may be more difficult to acquire bidders for this type of auction, and it may limit an auctioneer's interest to bidders who are willing to pay the minimum bid.

A reserve price is different from a starting or opening bid, which is the starting price from which bids go up or down in price, depending on the type of auction. The starting price can be less than the minimum bid or reserve price, but the item will only sell if the minimum bid amount is reached.

Recap: Reserve Auctions

Reserve auctions, also known as a minimum bid auction, are auctions that have a minimum bid amount, or reserve price, that must be reached in order for the item to be sold. This protects the auctioneer from selling the item or service at too low a price.

Absolute Auction

The Absolute Auction is like the opposite of a reserve auction or minimum bid auction because they don't have a reserve price. Absolute auctions go to the highest bidder and are a common type of auction because they often result in a large volume of bidders.

Because there's no minimum bid price, the opening bid is $0. From there, bids increase in price. This type of auction overlaps with other types of online auctions because they fall under the broader category of the absolute auction.

Absolute auctions are useful and popular for liquidating assets of a business. The assets might be out-of-date machinery that's been replaced with newer models, or perishable or out-of-season items that didn't sell within a certain period of time. Rather than simply losing the money on these items, businesses can auction them off in an absolute auction to someone or some entity that would want them.

Recap: Absolute Auctions

Absolute auctions don't have a minimum bid price so start at $0. Each bid must be higher than the last, and bidding continues until no one will bid higher than the standing bid. Absolute auctions are helpful for liquidating inventory and getting some money back to the business.

Simple Clock Auction

Simple Clock Auctions are types of online auctions that use ascending bids for a single auction item where the auctioneer announces a Continue Price that the next bidder has to meet to remain eligible to bid in another round.

If they wish to make a bid, the bidder can either accept the continue price or make a lower bid. If they make a lower bid, though, that's the last bid they can make, and they only win if no on else makes a higher bid. When there's at least one bidder who bid at least the continue price, the auction ends and the highest bidder wins. The winning bidder then pays the second-highest bid price.

A simple clock auction is similar to a Vickrey auction, except the bids are open in a simple clock auction instead of sealed.

Recap: Simple Clock Auctions

Simple clock auctions have a "continue price" that bidders must meet to continue to the next round of bidding. If they bid a lower amount, they can't bid anymore, and they only win if no one makes a higher bid.

Simultaneous Ascending Auction

The Simultaneous Ascending Auction, also known as the Simultaneous Multi-Round Ascending Auction or SMRA, allows bidders to bid on multiple auction lots at the same time. This is useful for auctions that have complement or substitute items.

In a simultaneous ascending auction, numerous "lots," or groups of auction items, are open for bidding at the same time. All the lots remain open as long as there are bids being placed on any of the lots. Bids are placed in multiple rounds and the results of each round are announced to the bidders after each one. In this case, it's the highest bid amount that becomes the winning bid.

The simultaneous multi-round auction continues until there are no more bids placed for any lot in a single bidding round. The highest bidders then pay the amount of their winning bid and get the items. An auction eCommerce platform tailored to this type of bidding is important to running it successfully.

Recap: Simultaneous Ascending Auctions

Simultaneous ascending auctions have multiple auction lots that bidders can bid on at the same time. Bidding takes place in multiple rounds and continues until no lot is being bid on within a round.

Silent Auction

In a Silent Auction, bidders place their bids by writing on a piece of paper or using a bidding app or website. Each bidder has a type of ID number to associate with their bid. Oftentimes, an auctioneer is not even present. Due to the ID number used to associate a bidder with their hiest bid, bidders place bids anonymously.

At some silent auctions, there's a minimum bid amount and a bid increment. The silent auction can be thought of as a variant of the English auction, just without the "open outcry" part. It could also be seen as a variant of a sealed bid auction, since other bidders typically don't know what you bid.

When done on an online auction eCommerce platform, silent auctions include images and descriptions of the items in the auction. Nonprofits often use silent auctions as their preferred type of auction. Even if done in-person, silent auction apps are still extremely useful for this type of auction. These apps enable better anonymity and can contain additional information. You can also alert the winner through the app.

Recap: Silent Auctions

Silent auctions are a type of auction where bidders input their bids on a paper or a dedicated auction app. The bids are anonymous, and a bid ID number is given to each bidder. Bidders can know who is bidding if it's in person but not what they bid.

Double Auction

The Double Auction involves multiple auctioneers and bidders at the same time, similarly to a simultaneous auction. However, there are some key differences for this type of auction that make it distinct from other auctions.

First, bidders submit their bids and auctioneers submit their ask prices—both to the market institution. The market institution determines a price p that clears the market. All auctioneers asking less than or equal to this price p sell at this price p, and all bidders bidding more than or equal to this price p buy at this price p.

An example of a double auction is actually a stock exchange. However, double auctions can also be done without exchange of money; this is called a Barter Double Auction.

In a barter double auction, each participant has a demand and an offer, which consist of multiple attributes (besides money). One example of a barter double auction is a Bilateral Trade Scenario, where there's a seller who values their product at a certain value, usually the price of production, and a potential buyer who values that product at a certain value.

Double auctions are often situations that warrant economic analysis. A mathematical model exists to determine the satisfaction level and competitive equilibrium, in which supply equals demand, such that the values given by the seller and buyer would be the same. This can only be reached, however, if the buyer and seller don't know what the other puts the value of the item at. It's been found that if the seller and buyer know each other's valuation amounts, neither has incentive to declare the true value; instead, either the seller will gain by having a higher asking price, or the buyer will gain by having a lower bid.

Recap: Double Auctions

Double auctions are unique in that they are more involved in economic theory and analysis. A type of double auction is a stock exchange, and another is a barter double auction. There are multiple sellers and buyers, and the price of the items in the auction are determined by market prices.

Online absolute auction platform with sealed bids.

Which Type of Auction Platform Is Right for Your Organization?

The different types of auction on your eCommerce auction platform should make sense for your industry, product categories, and services that you’re auctioning. Each type of auction has pros and cons when it comes to the business’s specializations and the situation.

The preferences of bidders and auctioneers, the items being sold on the platform, and the business strategy all impact the decision of which auction model should be picked for an eCommerce application. The scenario also changes depending on if its a B2B, B2C, or C2C auction. (Learn more about the C2C meaning here.)

With antiques and art, people are interested in unique, valuable, rare, or often one-of-a-kind items, which invites higher competition among bidders. The seller has an opportunity to get higher bids for these items, which means the English auction or first-price sealed bid auction would be a good choice.

Another example is real estate auctions. In the real property business, a Dutch, English, or sealed bid auction can be suitable depending on the nature of the real property being presented. is a real estate auction website where bank-owned and foreclosed homes are auctioned daily.

For products that can be purchased in bulk or that are perishable, Dutch auctions are often a good choice. Dutch auctions are often used for flowers and fish, for example.

Essential Platform Features for All Auction Types

Not only do the auctions you run on your eCommerce platform need to fit your business specifications and situation, but your platform also needs to be built to handle all the specifics of your chosen type of auctions. Here are some key features and functions to have for your auction eCommerce platform.

Real-Time Bidding

You want to be able to offer bidders and suppliers all the features and capabilities they’ll need to make bids in real-time, in an automated and manual fashion, and with the specific parameters of their bid type.

It should be easy for auctioneers to set up their auctions and for bidders to place bids. There should be a seamless bidding process for selecting a winning bidder and looking through the options if the type of auction calls for that.

Automated Bidding Process

For some kinds of auctions in eCommerce, the auction platform can be set up so that it bids on the user’s behalf.

People using the automated bidding process can set limits for how much bidding to do within a certain timeframe or the maximum bid amount they’re willing to pay.

Automated bidding allows people to bid quickly and be engaged in bidding without actually having to be on the auction platform every minute. They can also just bid up to a certain point in an automated fashion, then take over manually from there.

You can see this on sites like eBay, where there will typically be a lot of automated bids near the end of the auction.

Auction Platform Governance

As mentioned before, governance is also essential to the auction bidding process going well. The eCommerce platform needs to be able to have guidelines in place that are automatically enforced or sent through a review process. Auctioneers and bidders should all be aware of the rules and terms going into the auction.


The platform needs a way to verify bidders and auctioneers, to make sure the bidder can pay the amount owed and the auctioneer actually has the product they’re auctioning. This is especially relevant for expensive or one-of-a-kind items.


Bidders need to be able to be notified if something changes, such as if they’re getting outbid, if their bid won, if the auction is about to end, or if another round of bidding is beginning.

With advance notice, bidders can modify their bid if that’s part of that type of auction. A notification can also let someone know that a bid’s end minimum hasn’t been met or if they’re currently ahead in the bids but past their limit on the automatic bidding. Then if someone outbids that person, they’ll have to manually outbid them back.

Auctioneers also need to be updated for things, such as if the bidding reached the reserve price, if a bidder has won by being the last bidder standing, or if a bid price hit a certain value or limit that they wanted to be notified about.

That’s why notifications are essential for eAuction platforms, and it’s crucial that the right workflows are in place.

To get an eCommerce auction platform that’s built to a certain standard, it’s best to work with an experienced software company like Clarity Ventures. We have years of experience working with businesses like yours and building these platforms to fit each organization’s needs.


A Platform with All the Features

Clarity's auction platform solution has all these features and more; get in touch with us for a free demo.

A minimum bid can be the winning bid on an online auction.

Examples of the Types of Online Platforms for Auctions

Beyond the different auction types that your platform can be tailored to, there are also different types of auction eCommerce platforms that you can use.

Marketplace Auction Platforms

In a marketplace auction platform, numerous auctioneers sell items on the same platform. It works similarly to a regular marketplace eCommerce platform, where multiple sellers post products on your platform and buyers can purchase from any number of them. The only difference is that in a marketplace auction site, rather than selling items at a fixed price, goods or services are auctioned off.

When developing a marketplace auction platform, you can allow multiple types online of auctions to take place on your platform (e.g., Dutch auctions, Japanese auctions, and sealed bid auctions), or you can allow multiple sellers but only for a specific type of auction, such as English auctions.

Your marketplace auction eCommerce platform can have stores-within-stores as well, or subdomains for each auctioneer. That means that when a user clicks on an item from a particular seller or enters an auction, they are taken to a branded page within the marketplace auction website that has its own navigation, products display, and so on.

Direct Auction Platforms

With a direct auction platform, you're the only seller on that platform. This means the entire auction site is only branded to your company's specifications.

This also means you might have to do a bit more work when it comes to marketing, since you won't have the advantage of other sellers bringing customers to your site. However, direct auction platforms can be more personalized to your audience since you're catering to specific users rather than a wider arrange like in a marketplace auction platform. Clarity can help you develop either type of auction platform with our customizable auction services and solutions.


Get the Optimal Platform for Your Type

Our expert team at Clarity Ventures can develop an eCommerce platform with all the features your business needs for each type of auction you support. We’d be happy to discuss online auctions further with you and share our expertise, so please reach out to us if you’re interested.



An auction in eCommerce is an auction that takes place over an electronic or digital interface; in other words, it's an online auction. Auction eCommerce involves transactions between auctioneers and bidders participating in an auction via an eCommerce platform (online website).


English auctions are the most common form of auctions both online and in person. In an English auction, one item is put up for auction at a time, and bidders bid after the starting bid amount is announced by the auctioneer. Each bid is higher than the last, and when no one will bid higher than the current or standing bid, the highest bidder wins the auction.


An online auction is the event or process that involves a good or service being sold and bought in a certain manner, that being the rules that define that particular auction and with an auctioneer(s) selling and bidder(s) buying. Bidding is the process of competing to buy the good or service being sold. In other words, the auction includes both the selling and buying process by the auctioneer(s) and bidder(s), respectively, and bidding just involves the buying process done by the bidders.


The four main types of auctions are: (1) Ascending Bid Auction (i.e., English auction); (2) Descending Bid Auction (i.e., Dutch auction); (3) First Price Sealed Bid Auction; and (4) Second Price Sealed Bid Auction (i.e., Vickrey auction).


The best auction type for your eCommerce platform depends on your business model and what types of things you'll have in the auctions, as well as whether you want to have the auction site only for your company or whether you want to have a marketplace auction site, where other sellers can post their auctions on your platform. The most popular type of eAuction for online procurement sites is often the reverse auction, while Dutch auctions are useful for B2B liquidation.


A first-price sealed-bid auction is a type of auction where bidders simultaneously submit sealed bids without knowledge of the other participants' offers. The highest bidder wins the auction and pays the amount they bid.

This differs from other auction formats, as in a first-price auction, the winning bidder pays the precise amount they offered, regardless of the bids of others. For example, if three participants submit sealed bids of $100, $150, and $200, the highest bidder offering $200 wins, but they pay exactly $200 (no matter what the second-highest bid was).

A first-price sealed-bid auction format encourages participants to carefully evaluate the item's value and strategically determine their bid. Sealed-bid auction bidders must strike a balance between their eagerness to secure the item and the desire to avoid overpaying. It requires a nuanced understanding of the item's worth, making it an intriguing format for high-value transactions such as art auctions or government procurement processes.

First-price sealed-bid auctions possess strategic complexity. Bidders must estimate the item's value, considering both their own valuation and potential valuations of other participants. Factors like risk aversion, information asymmetry, and strategic behavior come into play. Bidders aim to submit bids that are competitive yet not excessively high, aiming to secure the item at the lowest possible cost. This format adds an element of suspense and uncertainty, as participants await the outcome, unaware of their competitors' offers.

Overall, first-price sealed-bid auctions provide an interesting framework for negotiations and can yield optimal outcomes when participants accurately assess the item's value.


An absolute auction is a type of auction where the highest bidder at the end of the auction sale is obligated to purchase the item or property, regardless of the final bid amount.

Unlike other auction formats, there is no reserve auction price or minimum bid requirement in an absolute auction. This means that the item will be sold to the highest bidder, even if the highest bid is significantly lower than the perceived market value.

Absolute auctions are often used to generate quick sales and create a sense of urgency among potential buyers. This format is commonly employed in real estate and art auctions, fostering a transparent and competitive environment for buyers.

A sealed bid auction is a type of auction where bidders submit their bids privately, without knowledge of others' offers. Each bidder independently provides a single, sealed bid, usually in a written or digital format, to the auctioneer before a specified deadline. Once all bids are received, the sealed bid auction results are opened simultaneously, and the highest bidder wins the item or property at the price they offered.

Sealed bid auctions encourage participants to submit their true value, as they cannot adjust their bids based on competitors' offers. Sealed bid auctions are commonly used for selling valuable assets, real estate, or in government procurement processes.

Still have questions? Chat with us on the bottom right corner of your screen #NotARobot

ACH hold for credit or debit card.
Autumn Spriggle is a Content Writer at Clarity Ventures who stays up to date on the latest trends in eCommerce, software development, and related topics to provide readers with the latest and greatest. She strives to help people like you realize the full potential for their eCommerce business.