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Low Unique Bid Auction – What Is It?

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Low Bid Auction or Low Unique Bid Auction implies a type of auction with paid bids. The most successful Internet projects include the British AuctionAIR.co.uk and the Australian-American-German Dubli.com entertainment portal.

The principle is quite simple. Every person offers his/her own bid for a product being unaware of other participants’ bids. In case your bid turns out the unique and lowest simultaneously, you win.

What Is the Low Unique Bid?

Hundreds of people take part in the auction. In case at least 2 of them offer the same bid, this bid stops being unique and is not able to win. Among the unique bids, the lowest one wins.

Rules of the auction operation (by the example of the British AuctionAIR website):

  • Only the auction administration can sell something
  • Payment for participation in tenders (3-30 pounds sterling (£) for every bid) is implied. Such payments received from a great number of people enable the auction to make up for products cost and receive some profit
  • Every participant can make not more than 10 bids (i.e. he/she can offer not more than 10 price options, each option is paid)
  • You do not know what bids are offered by other participants
  • The auction will be held in case over X paid bids are made
  • A product is provided to a person who offers the lowest bid not offered by any other auction
  • participant. It implies that if a bid is offered by 2 or more participants, it is not considered unique and cannot win.

Actual example: Mini Cooper is put out to tender on AuctionAIR
Retail price: 18 010 £
1 bid price: 30 £

BMW Mini Cooper

The amount of bids to be made so as the auction is held: 945 bids

The offered bid should be 1 pound fold, i.e. one cannot opt for 1.5 £, while 2 £ or 5 £ are available.

Thus, the auction obtains revenues from payments for bids in the amount of 28 350 pounds (945 bids by 30 £ for each). AuctionAIR earns 10 340 £ by each car. 21 of them have been already sold. The highest bid is 120 £, the lowest one makes up 5 £.

It is not regarded as gambling from the legal point of view. The victory in the low unique bid auction is provided by your experience in taking part in such auctions and analytical abilities.

For example, upon the results of 2009 the last 700 victorious bids allowed the auction participants to acquire various luxury items in the amount of 708 324 pounds sterling for 17 323 pounds, i.e. the average saved amount by selling each lot made up 1004 pounds. Every 58th person who took part in trades turned out a winner.

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