An auction is a sales event where potential buyers place competitive bids on assets or services through either an open or closed format. During auctions, both buyers and sellers believe that they can get a good deal for their items.

In an open format, all bidders are aware of the bids submitted and in a closed format, bidders are not aware of other bids.

An auction can be conducted live or on an online platform. The item being auctioned is sold to the highest bidder in both open and closed auctions. What are open and closed formats of auction?

In an open auction, interested bidders come together at a physical venue or online to bid on items. As an interested party, you are aware of the competing bid amounts. All you have to do is to continuously raise your bid until you are either declared the winner of the auction or until you decide to drop out of the bidding.

In a closed format auction, interested parties can submit sealed bids to the seller which bid amounts are only known by the seller. The seller may choose to hold just one round of bidding and select a winner or select two or more bidders for an additional auction round.

There are both advantages and disadvantages of auctions. You can sometimes find rare and sentimental items at auctions. Also, there is the possibility that you can buy an item at a discount at an auction.

One disadvantage of auctions is that their competitive nature can discourage some potential buyers. Also, the auction gives the seller an added advantage of manipulating and controlling the entire auction process just to get a higher price for their items. Furthermore, you can end up paying more for what an item is worth.

So, since you now know what an auction process is like, it can equip you with the necessary information you need to bid and get that piece of memorabilia that you so much desire.