Call price: This is why the starting price is so important

The starting price in the auction, which is announced to signal the beginning of an auction, is called the starting price. How high this starting price is can be determined by an auction house itself.

Here you can learn from the auction house InventoryNord why a starting price is so important. What is the aim of a low starting price? How do auction houses determine the starting price and what advantages does it bring with it?

Call price: Meaning

The starting price plays an important role in an auction as it sets the starting price for the item for sale. It serves to enable the sellers to achieve a higher selling price, while the potential buyers can adjust to a certain price level. Especially for high-value or rare properties, an exclamation price is set to ensure that the property is not sold below value.

A low starting price can attract many bidders and increase competition among them. Usually, the auctioneer specifies the further bidding steps. To enable bidders to prepare for the auction, the starting price must be announced before the auction.

Call price in an auction - These are the advantages

When you as a seller offer an object at auction, there are some advantages and disadvantages to consider. One important decision concerns the starting price, which is the starting price in the auction. Here you can find out about the importance of the starting price and the advantages and disadvantages that come with it.

A starting price is important to set a minimum bid and to ensure that the object is not sold below its value. For high-value or rare properties, the starting price can also help to attract the attention of potential buyers.

However, if the starting price is set too high, it can act as a deterrent to potential buyers and make the auction unattractive. A low starting price, on the other hand, can attract more bidders and increase competition.

One disadvantage of an exclamation price is that it can discourage potential buyers from participating in the auction if they feel the price is too high. Another disadvantage is that sellers may not be aware of the actual value of their property due to the exclamation price and end up with a lower sale price. Overall, however, an exclamation price is useful to make the auction fair and transparent and to ensure that the property is not sold below value.

How does an auction with a reserve price work?

As you now already know, a call price in an auction is particularly useful for the seller. But how does such an auction work? In addition to the starting price, you have the option of setting a minimum price at an auction.

The minimum price is the lowest price at which the seller is willing to sell the object. If the highest bid is below the minimum price, the object will not be sold. Once a bid reaches or exceeds the reserve price, the buyer may purchase the property.

It is important that potential bidders know the reserve price before the auction so that they can place their bids accordingly. The auction catalogue should therefore contain all information about the objects to be auctioned.

An auction is a special form of sale in which goods are sold in a bidding process. Auctions can be held for a variety of products and objects. At InventoryNord, mainly plant, machinery, equipment and tools are auctioned off at an affordable price.

Important questions about auctions

How many auction forms are there?

There are several auctions in which the procedure for determining a starting price differs. The best known auction form is the English auction.

Then there is the two-sided auction, the Japanese auction, the Dutch auction, the commission auction, the American auction and the Vickrey auction.

What must be observed during an auction?

In principle, anyone can participate in an auction. However, only persons who have reached the age of 18 can bid. In addition, the bidder must be registered before participating in an auction.

What is the best way to win an auction?

There are some factors that can lead to success in an auction. It is indeed a common strategy to place the highest bid late in the bidding process in order to surprise and outbid other bidders. However, this can also be risky as there is no guarantee that other bidders will not have the same plan.

It is also important to consider your budget and set a limit so as not to spend too much. Thorough research on the property being auctioned can help you better understand the value and market conditions and make a realistic bid.

You should also remain alert during the auction and place your bids carefully so as not to make rash decisions. It is also helpful to observe the behaviour of other bidders and keep an eye on their bids.

Do you have any further questions or comments on this topic? Then please feel free to contact us.

Foto by LightFieldStudios