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Bidding is an offer (often competitive) to set a price by an individual or business for a product or service or a demand that something be done. Bidding is used to determine the cost or value of something.
Bidding can be performed by a "buyer" or "supplier" of a product or service based on the context of the situation. In the context of auctions, stock exchange, or real estate the price offer a business or individual is willing to pay is called a bid. In the context of corporate or government procurement initiatives, the price offer a business or individual is willing to sell is also called a bid. The term bidding is also used when placing a bet in card games. Bidding is used by various economic niches for determining the demand and hence the value of the article or property, in today's world of advanced technology, the Internet is a favored platform for providing bidding facilities; it is a natural way of determining the price of a commodity in a free market economy.
Many similar terms that may use or may not use the similar concept have been evolved in the recent past in connection to bidding, such as reverse auction, social bidding, or many other game-class ideas that promote them selves as bidding. Bidding is also sometimes used as ethical gambling in which the prize money is not determined solely by luck but also by the total demand that the prize has attracted towards itself.
Bidding performs in two ways on online. One is Unique Bidding and another one is Dynamic Bidding.
Unique Bidding: In this scheme, the user that gives the most unique bid wins the bidding. For example, if users A,B,C,D,E are bidding for the same product, and A bids $5, B bids for $5, C and D bid for $2 and E bids for $3, then E wins the bidding because his bid was unique.
Dynamic Bidding: Dynamic Bidding is type of bidding where one user can set his bid for the product. At this time if the user present or not for bidding, automatically the bidding will perform up to his defined amount. After reaching his bid value the bidding stops from his side.
What is timed bidding?
Timed bidding auctions allows users to bid at any time during a defined time period, simply by entering a maximum bid. Timed auctions take place without an auctioneer calling the sale so bidders don’t have to wait for a lot to be called. This means that a bidder doesn't have to keep your eye on a live auction at a specific time.
How does timed bidding work?
By entering a maximum bid a user is indicating the highest they’re willing to pay for a lot. An automated bidding service will bid on their behalf to ensure that they meet the reserve price or that they always stay in the lead, up to your maximum bid. If someone else has placed a bid that is higher than the maximum bid, the bidder will be notified, allowing them to change the maximum bid and stay in the auction. At the end of the auction, whoever's maximum bid is the most wins the lot.
How is it different to live bidding?
Live bidding is a traditional room-based auction. These can be broadcast via a website where you can hear live audio and see live video feeds. The idea is that a bidder places their bid over the Internet in real-time. Effectively it's like being at a real auction, in the comfort of the home. Timed bidding on the other hand is a separate auction all together, which allows bidders to participate without the need to see or hear the live event. It's another way of bidding, that is more convenient to the bidder.
Bidding in Procurement Initiatives
Most large organizations have formal procurement organizations that acquire goods and services on behalf of their organization. Procurement is a component of the broader concept of sourcing and acquisition. Procurement professionals increasingly realize that their make-buy supplier decisions fall along a "continuum" from buying simple transactions to buying more complex and strategic goods and services (e.g. large scale outsourcing efforts). It is important for procurement professionals to use the appropriate sourcing model There are seven models along the sourcing/bidding continuum: basic provider, approved provider, preferred provider, performance-based/managed services model, Vested business model, shared services model and equity partnerships.
Bidding off the Wall
Bidding off the wall or taking bids from the chandelier, as it is sometime known, is where the auctioneer bids on behalf of the vendor.
This is allowed by law in some countries and states and the auctioneer is allowed to bid on behalf of the vendor up to, but not including the reserve price or beyond it. In some cases, this may be extremely helpful for bidders because the reserve needs to be met.
For an example in a property auction supposing the property is coming up for auction and there's only one person interested in bidding for it in the room. The reserve has been set at #100,000 and this bidder is happy to buy it at #120,000. The bidding starts #80,000 and without the auctioneer bidding on behalf of the vendor, it would never progress beyond that amount. However, because the auctioneer will take bids or generate bids of #85,000, the bidder then goes #90,000 etc. It can end up where the bidder, if he wants to, can bid 100,000 pounds and secure the property on the reserve price.
The result is that the vendor sold the property at reserve and the purchaser has bought the property on the reserve price at less than he was prepared to pay. Without the auctioneer taking bids off the wall, this would never have happened.
All professional auctioneers do it with all types of auction including motor vehicles. As long as they're pushing it up towards the reserve price then its not an issue. If you don't want to bid at the price the auctioneer is asking then don't bid.
If the goods don't meet the reserve and no-one but you wants to buy, then if the auctioneer didn't bid off the wall to meet the required price, the goods wouldn't be sold anyway.
- "Definition of bidding in English". Oxford. Retrieved 29 March 2014.
- "Bidding at Auctions". Auction Bidding. Retrieved 31 March 2015.
- Keith, Bonnie, et. al., (2016). Strategic Sourcing in the New Economy: Harnessing the Potential of Sourcing Business Models for Modern Procurement (1st ed.). NewYork: Palgrave Macmillan. ISBN 978-1137552181.
- "Bidding Terminology". Auctions UK. Gauk Auctions. Retrieved 31 March 2015.