Online Auction Terminology

What is an Auction – An auction is when something is sold, but differs from normal selling in that the buyer and sale price are decided by bidding. The buyer who bids the most then pays that price.

What is a Bidder – A bidder is somebody who offers a price for the product on auction, should their price be accepted they would be the buyer.

What is a Lot – A 'Lot' is the item which is being sold at auction. A normal auction would consist of multiple lots.

What is a Bid – A bid is made by a bidder - it's an off of money they are willing to pay for the item being sold. One bidder can make more than one bid, usually increasing as they try to out bid other bidders.

What is does it mean to be Out bid – being ‘out bid’ means that you have places a bid, but another bidder has placed a higher bid that yours.

What is a Shill bid – A shill bid is when a bidder make a bid but does not intend to buy - the reason they do this is they push up the value other bidders have to make who are seriously interested in buying the lot. Usually shill bidding will have been instigated by the seller to get more money for the product.

What is a Reserve price – The reserve price is the minimum price the seller will allow the item to go for. This might be public or private, if the winning bid is less than the reserve, than the item will go unsold.

What is a Gabel – The person running the auction will have a hammer that they slam down when the auction is complete - this hammer is called the gabel.

What is Commission – A Commission is a fee paid by the seller to the auction house who run the auction, it is usually a percentage of the final sale price.

What is an Opening Bid – The opening bid is the starting price for the auction, the price at which the lot commences and the bidding begins at.

By: James Ryder

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