Forward Auction

A forward auction is the most common type of auction and it consists of one seller, and many potential buyers. These are electronic auctions, which can be used by sellers to sell their items to several buyers. Sellers and buyers can be individuals, organizations etc. it is also called a consumer-to-consumer (C2C auction).
Items are commonly placed at the website for auction. Bidding starts at the minimum price acceptable to the seller and increases with every new bid by a fixed increment. Every bidder knows what price is being bid. They continuously bid for the items they are interested in. Eventually the buyer with highest bid acceptable to the seller wins.
This type of auction can take on several different forms, ranging from auctions that involve setting a minimum price and then entertaining bids that are above that minimum, or starting with a high price that is unlikely to be met and then accepting bids that are as close to that high price as possible. The uniqueness of this auction is that unlike other auctions; the seller retains the right to select any one of those bids, or to reject them all if none of the bids are considered acceptable.
Types Of Forward Auction:

  • 1. English auction: In this scenario, the seller sets a minimum acceptable bid and entertains bids that are incrementally higher than that minimum. With this approach, all participants know the amount of each bid that is placed, although the identity of each bidder is not known to anyone but the seller.
  • 2. Dutch auction: Bidding starts at a price so high no buyer will accept, and which is lowered until the best acceptable price is reached. Used typically for perishable items like flowers and vegetables.
  • 3. Japanese auction: Bidding starts at a low price which goes up in regular increments. Every buyer present must bid at every stage during the auction.
  • 4. Yankee auction: Multiple units of an item are put up for bidding and each bidder can specify the number or quantity he or she wants to bid for.
  • 5. Marketing Efficiency auction: in this type of auction; the buyers seek to outbid each other by placing successively higher bids to obtain a unique item.

Forward Auction Catalogue