Auctions are often used as a Selling Tactic. It is common knowledge that negotiators, sellers, agents and vendors all use auctions to determine and drive up the prices of the goods and services which they are selling; or have been entrusted to sell.
As a selling technique, or negotiation tactic; an auction is best used when many people want the same product; and the product has a high-value and is of a limited quantity.
The use of an auction as a sales practice is particularly applicable; where determining the right price has become a difficult and unpredictable task for the vendor, or expert valuer.
Members of the public are quite accustomed to auctions being frequently used by sellers (vendors) when it comes to selling (or disposing off) their unique one-off goods, high-value goods and precious goods, such as; real estate, cars, valuable jewellery, rare antiques, masterpiece oil-paintings and business assets.
An Auction is also particularly useful in the business-to-business transactional world when used as a negotiation tactic to sell a company’s products or services (offerings).
So. What is an Auction?
An Auction can be defined as: the selling process organised by a seller, in which several people (and multiple parties) bid for, and compete against, one another; to buy a particular product, or service (offering).
Why do Auctions help drive up prices? The psychology of an auction works well in driving up the price of a product; because:
a) When people know that they could lose out on something that they want to own, then they want it even more. And as such they are ready and willing to pay even more for that particular item.
b) Most people have a competitive nature and so they keep on bidding for the item hoping that they would win.
c) Some people want to win (the product), just for the sake of winning; and for other associated reasons.
There are some many factors to consider whether, or not, an auction should be used for selling, or negotiating the sale of any particular item (or offering). We shall be examining these, and other, considerations; later on.
TO BE CONTINUED. – Copyright: Daniel Obiago, 2017
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