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Auction
and its benefits
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by:
S.M
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An auction is basically a public sale wherein
any object is sold to the highest bidder. It can be defined as a
process of purchasing and selling things by offering them up for bid,
taking bids and selling the things out to the highest bidder. This is
what is generally the case. However, a sale to the lowest bidder may
also take place, in cases where land is sold for non-payment of taxes
to anyone willing to take it for the shortest term; or where a contract
is offered to an
individual or party willing to take it for the
shortest term; or where a contract is offered to an individual or party
willing to perform it at the lowest price. Such cases too seem to
fairly come under the purview of the term ‘auction’.
In case of auction the seller presents the products on a public
platform. The selling price of the products are
determined
by the bids or offers of buyers interested in buying them based on
their individual estimation of value of and need of the products. The
person offering the highest bid at closing of auction receives the
right to purchase the products at the bid price. The winner of the bid
is normally legally bound to buy the item auctioned. In recent times
auctions have been conducted online.
The benefits of auction are many. Some of the significant advantages
are:
a)The
auctioned item fetches the highest price in the given situation. Thus,
in a way there is the maximization or optimization of profit.
b)At
an auction the goods are almost certainly disposed off after bidding by
their sale to the highest bidder. Hence, this serves as the right
podium for disposing or selling out
of accumulated goods.
Otherwise, business could have become stagnant due to the stocking of
these goods. Certain items could also have perished (in case of
perishable goods) or expired if not sold out in time.
c)In case
of auctioning a variety of articles may come up for sale, which may not
be otherwise available in the market. The buyer can get quite urprised
by looking at a treasure trove of antique articles available at an
auction.
d)An auction can also be considered as a method for
estimating the value of certain commodities which have hitherto
undetermined or variable prices.
About the Author
Author bio:
Author: S.M
http://www.autocastle.com/
http://www.autocastle.com/dealers.asp
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