by:
S.M
An auction is fundamentally a public sale wherein any object is oversubscribed to the highest bidder. It can be defined as a process of buying and merchandising things by offering them up for bid, taking bids and merchandising the things out to the highest bidder. This is what is generally the case. However, a sale to the lowest bidder may besides take place, in cases wherever
land is oversubscribed for non-payment of taxes to anyone willing to take it for the shortest term; or wherever
a contract is offered to an individual or party willing to take it for the shortest term; or wherever
a contract is offered to an individual or party willing to perform it at the lowest price. Such cases too seem to fairly move under the horizon of the term ‘auction’.
In case of auction the marketer presents the products on a public platform. The merchandising cost 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 usually lawfully bound to buy the item auctioned. In recent times auctions have been conducted online.
The benefits of auction are many. Several of the significant advantages are:
a)The auctioned item fetches the highest cost in the given situation. Thus, in a way there is the maximization or optimisation of profit.
b)At an auction the goods are about surely disposed off after bidding by their sale to the highest bidder. Hence, this serves as the right dais for disposing or merchandising out of accumulated goods. Otherwise, business could have become stagnant due to the stocking of these goods. Certain items could besides have perished (in case of biodegradable goods) or invalid if not oversubscribed out in time.
c)In case of auctioning a variety of articles may move up for sale, which may not be otherwise accessible in the market. The purchaser can get quite urprised by looking at a treasure treasure trove of antique articles accessible at an auction.
d)An auction can besides be considered as a know-how
for estimating the value of certain commodities which have so far undetermined or variable prices.
