Dutch Auction Rules

Each time you increase your maximum bid amount (the most you are willing to pay) for a desired quantity, you'll also need to re-enter the total quantity desired. At auction close, the lowest successful bid amounts for each winning bidder, plus the quantity of items they earned the right to purchase, are shown in the Bid History. Unlike an Open or Reserve Price auction, however, the Bid History at auction close will not show the actual maximum bid amounts that the winning bidders entered to earn the right to purchase their desired number of items.

Open Dutch Auctions

In Open Dutch Auctions, the seller specifies the minimum price (the Opening Value) and the number of items for sale. Bidders then bid at or above the minimum price for the quantity of items they wish to purchase. At the close of the auction, the highest bidders purchase the items at the lowest successful bid.

For example, a seller wishes to sell 10 Teddy bears for $10.00 each. If 15 people each bid $10.00 for one Teddy bear, only the first 10 people will be successful bidders since earlier bids always take precedence over later bids of equal value.

If, however, one of the 15 people decides to enter a bid of $20.00 for one Teddy bear, that person will be guaranteed a winning bid since this bid exceeds all the others. The remaining 9 Teddy bears will be claimed by the people who placed the earliest $10.00 bids. The final price for each bear will be $10.00.

If enough bidders bid above the minimum price, the final price of the item will increase as well. On the other hand, if fewer than 10 people place bids in our example, then only that number of Teddy bears will be sold at the minimum price. For the selling price to increase past the minimum price specified by the seller, the quantity of items bid for at a price greater than the minimum price must be equal to or greater than the number of items available for sale. In our example, the selling price would increase if 10 or more Teddy bears were bid upon at a price greater than $10.00.

In the case of multiple quantities bid for by a bidder, the lowest successful bidder may not earn the right to purchase the complete quantity he or she bid upon, since there may only be one item left by the time the high bidders have been processed. For example, if the lowest successful bidder requested 2 Teddy bears, he or she might only be entitled to receive one, as 9 Teddy bears may have already been allocated to higher bidders. In order to avoid partial allocation of a bid for multiple items, the bidder must ensure that he or she is not the lowest successful bidder.

Reserve Price Dutch Auctions

In Reserve Price Dutch Auctions, the process is identical to the Open process except that edeal will not acknowledge a winning bid until the reserve price has been met. Only bids equal to or greater than the reserve price will be in a position to be considered as successful bids by edeal. If a Reserve Price Dutch Auction closes without any or enough bids equal to or greater than the reserve price, the seller may choose to make direct contact with bidders who placed bids below the reserve price and offer to sell the remaining items at the lower bid prices.

InterActive Classified Dutch Rules