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Maximum bids automate auction buying

Thursday, Apr. 21, 2011 - 7 am | Aaron Traffas, CAI, ATS, CES

There are a couple of different ways to place bids with Purple Wave. While some auction sites have only one bidding box, Purple Wave has two. These boxes allow the option of both a direct bid and a maximum bid. Let’s take a look at how each option works.

Direct bid
Bidders may place a direct bid, a maximum bid, or both. By entering a direct bid in the “your bid” field, a bidder executes a bid directly at that price. It may be the next bid required or it may be higher than the next bid required, in either case the new current price will be equal to the bid placed.

While it’s rare that a bidder would place a direct bid that is greater than the next bid required, it is possible and it does happen. Those of us familiar with live auctions have seen a bidding war between two bidders where one of the bidders yells a number that’s greater than the price for which the auctioneer is asking in an effort to scare off the competition. This phenomenon also happens occasionally in the final, exciting minutes of Internet bidding on some items.

Maximum bid
Bidders who do not want to bid again every time they’re outbid on items utilize the maximum bid function. By submitting a maximum bid, a bidder authorizes the Internet bidding system to bid on his or her behalf up to that submitted amount. When someone else enters a bid that is less than or equal to this maximum bid, the price increases but the previous bidder remains the current winning bidder.

For example, if bidder 1 submits a maximum bid of $100 on an item, and bidder 2 later bids $50, bidder 1 is the current bidder and the price is $55. If bidder 3 then places a $100 bid, a bid equal to the current maximum bid, the system then looks at which bid came first. Bidder 1 remains the current winning bidder at $100 until another bid is placed by anyone.

Using the maximum bid function is very powerful. By entering her highest bid possible on an item, a bidder may watch other items more closely or us a “set it and forget it” approach, going about her day without the need to be in front of a computer at the time the auction is closing.

4 responses to "Maximum bids automate auction buying"

  1. […] Traffas, CAI, ATS, CESYesterday we looked at Purple Wave’s Internet bidding system and how maximum bids can be used to automate auction buying. Today we’re going to examine bidding histories and see what they can tell us.Some auction […]

  2. Charles Long says:

    Is the maximum bid always final? I am hesitant that I put in a bid as a maximum bid and as the time draws close I see I am not the top bidder. At this time can I again put in a higher max bid?

    1. aaron.traffas says:

      So long as the item hasn’t closed, you can always bid again, either raising your maximum bid or simply bidding again at the next required increment if you’d veen outbid. The benefit of entering your maximum bid early is that you don’t have to remember to come back and bid on the day of the auction. Once the item has closed, the sale price is set and we no longer accept bids.

  3. […] folks can react in time and get the items they want. I’d also encourage buyers to use our max bid feature. I know so many buyers love the thrill of the last-minute bid and watching the auction online with […]

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