Auctions aren’t just for eBay and Sotheby’s anymore. An auction doesn’t require a barker or online presence either. An auction can be held by a buyer or a seller. The primary characteristic is a one to many relationship. Auctions are always one-off transactions where price is usually to only factor and at the very least the dominant driver of the deal. The hallmark of an auction is utilizing game plan theory to take advantage of competitive behavior to maximize value without respect to the other party.
The perfect opportunity to hold your own auction is the very next time you are shopping for a new car. Think about it, it’s a commodity, and price is the primary concern. You flip the script on the dealers and make them compete for your business. Don’t believe the hype of these online sites that claim to provide this service for you, you are better off running the auction yourself. 3rd parties have ulterior motives, just remember who is paying their bills. I’ll post a step by step guide to running the new car auction in a future post.
EXTERNAL CHARACTERISTICS: An auction exists when there is a one-to-many situation for either the buyer or the seller. Price is the primary objective and many times the only variable. This type of transaction is strictly a one–off and any future transactions are not predicated or dependent upon the terms of this transaction. There may be subsequent deals, however, each one will be unrelated and negotiated separately. The focus of an auction is solely on short-term gain without consideration for the other party’s financial situation.