What is a Dutch Auction?

A Dutch Auction is an auction in which the seller lists multiple quantities of an identical item. With multiple items up for sale, multiple bidders can win and one bidder can try to buy more than one quantity. If there are more bidders than items, the highest bidder will receive his or her full quantity. Bidders may receive partial quantities, i.e., only receive 2 out of the 3 items they bid for.

Bids on Dutch auctions are done per item. When you bid, you will enter the desired quantity and the per item price. As with all auctions, Proxy bidding may be used during Dutch auctions. The system will work to make sure you get the maximum possible number of items - up to your maximum quantity - for the lowest possible price. Your total price will be the quantity won multiplied by the per item price.

Example #1
Auction for 5 items
Bidder 1: Bids $20.00 per item, wants 1 item
Bidder 2: Bids $15.00 per item, wants 3 items
Bidder 3: Bids $10.00 per item, wants 3 items

Bidder 1: Wins 1 item-was high bidder per item and only wanted 1 item. Will pay $20.
Bidder 2: Wins 3 items-bid $15 per item, will pay $45.
Bidder 3: Wins remaining 1 item. Even though bidder 3 wanted 3 items for $10 each, this bidder was outbid, so he or she will only get the remaining 1 item and will pay $10.

Example #2
Auction for 5 items
Bidder 1: Bids $20.00 per item, wants 5 items
Bidder 2: Bids $15.00 per item, wants 3 items
Bidder 3: Bids $10.00 per item, wants 3 items

Bidder 1: Wins all 5 items - the bidder placed the highest bid per item and will pay a total of $100.

Example #3
Auction for 5 items
Bidder 1: Bids $25.00 per item, wants 3 items
Bidder 2: Bids $25.25 per item, wants 5 items

Bidder 1: Wins 3 items
Bidder 2: Wins 2 items

The reason for this is that bidder 2 bid after bidder 1 and bidder 2 did NOT outbid bidder 1's bid by the correct bid increment. The bid increment for $25.00 is $1.00, but the second highest bidder only bid $.25 more, which did not outbid bidder 1. Therefore bidder 1 gets his or her desired quantity and bidder 2 gets the remaining items. The bid increment will be clearly displayed during a Dutch auction.