Bidding in a Declining-Price Bidding Fee Auction is a unique shopping experience. If the price you have to pay is hidden, or secret, you must bid to disclose it and bidding means paying a fee with bids bought in advance. If the price is open, or public, it is available to all bidders. This article applies to an open descending-price auctions with prices available to all bidders.
Although participating in an open declining-price auction can be enjoyable, it is intended as a serious shopping program for people who have already decided to acquire a high-value item; They use the auction to buy the item at a bargain price.
It is important to understand that you are not buying the product from the auctioneer. The auction only provides a discount on the product. Auction winners use the discount to buy the product from any merchant of their choice. This may be true even if a specific merchant is offering the product for sale. The winning bidder is not obligated to deal with the listing merchant. The discount applies to any merchant's price, which may be lower than the product price listed in the auction. The discount can be large, as much as 90 percent on some products.
Another unique aspect about the open declining-price auction is the existence of financial auctions. Enrolled members can actually bid on a discount for their credit card debt, installment debt, college tuition, and other obligations. A small investment of bidding tokens can result in a big reduction for the auction winner. The losers don't do badly either. The bidding tokens they bought and used in the financial auction are refunded for bidding in other auctions. This makes financial auctions particularly favorable.
Similar to some auctions held by counties or government agencies, to participate in the declining-price auction, you must enroll and pay a fee for the privilege of bidding. The fee is paid in bidding tokens, which members buy at 10 cents each. The fees accumulate to create a discount on the item on which you will bid. No bidding takes place during the enrollment period, which may last from one to ten days. Once you enroll, you don't have to do anything until the scheduled time for bidding to start.
Each auction requires a minimum number of bidders, determined by the auctioneer, to create a viable bidding competition. If enough bidders don't enroll, the auction is canceled and the enrollment fees are refunded. There is also a maximum number of bidders allowed, to ensure that the competition is not excessive. When bidding starts, only enrolled bidders may bid. The auction does not accept any new bidders.
Bidding always starts at a discount from the product's listed price. Unlike most auctions in which the product price increases, each bid lowers the price by increasing the discount. Each bid requires a specified number of bidding tokens and starts a timer counting down. A new bid restarts the timer for the current bidder. If the timer reaches zero, the bidder whose timer was running is declared the winner .. With only ten to twenty seconds allowed on each bidder's timer, and the price of the product declining, bidding tends to move quickly and may last from a few minutes to an hour or two before a winner is declared.
Bidders should understand that every product or service has a price that must be covered if the seller is to remain in business. Therefore, to provide a real bargain to the auction winner, all participating members contribute toward the discount made available to the auction winner. With casualty insurance, many people pay a premium to create a fund that compensates for the casualty of an insured. the premium pays for the protection. Similarly fee-per-bid auctions pay for the possibility of winning the auction. Such participation involves a degree of risk, in exchange for which you may gain a high reward. Investigate carefully any on-line auction and learn its rules before you get involved.