Patent-pending bid premium technology gives bidders an opportunity
to make money on auctions that they don't win. A bid premium is an
amount paid to the bidder based on the amount of the bid. The seller
or auctioneer can set and adjust the value of the bid premium in order
to encourage or even discourage bidding.
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For example, a seller who lists an item with a starting bid of $10
and a bid-premium percentage of 5% that eventually sells for $25
will be charged $0.75 for bid premiums (5% of the $15 difference
between the $25 selling price and the $10 start price). The seller
will net $24.25 (less any other auction fees) and the $0.75 will be
distributed to the bidders in proportion to the amount of their bids.
For example, if the first bid was for $20, the premium paid on that
bid would be $0.50 (5% of the $10 difference between the $20 bid
and the $10 start price), if the second bid was $24, the premium
paid on that bid would be $0.20 (5% of the $4 difference between
the $24 bid and $20 bid it surpassed), and the premium paid on the
winning bid would be $0.05 (5% of the $1 difference between the
winninng $25 bid and the $24 bid it surpassed).
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If a seller ran a similar auction with a 25% bid premium instead of
the default 5% and the item was bid up to $40, the seller would be
charged $7.50 for bid premiums (25% of the $30 difference between the
$40 selling price and the $10 start price). In this case, the seller
would net $32.50 and $7.50 would be distributed to the bidders. For
example, if the first bid was for $25, the premium paid on that bid
would be $3.75 (25% of the $15 difference between the $25 bid and
the $10 start price), if the second bid was $35, the premium paid
on that bid would be $2.50 (25% of the $10 difference between the
$35 bid and the $25 bid), and the premium paid on the winning bid
would be $1.25 (25% of the $5 difference between $40 and $35). All
things equal, a bid premium of 25% should be 5 times more attractive
to bidders than a bid premium of 5%.
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These simple examples provide an idea of how a bid premium works,
but it is actually somewhat more complicated. Please contact
info@amextllc.com for
more information. If you would like to try out a bid-premium
auction, please visit the Auction Market
at aucmart.com.
The Auction Market is an ongoing development project, but please
note that it auctions real items for real money, so please do not
list an item or bid on an item unless you are serious about
selling or buying it.
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