Patent-pending bid premium technology gives bidders an opportunity to make money on auctions that they don't win. A bid premium is an amount paid to the bidder based on the amount of the bid. The seller or auctioneer can set and adjust the value of the bid premium in order to encourage or even discourage bidding.
For example, a seller who lists an item with a starting bid of $10 and a bid-premium percentage of 5% that eventually sells for $25 will be charged $0.75 for bid premiums (5% of the $15 difference between the $25 selling price and the $10 start price). The seller will net $24.25 (less any other auction fees) and the $0.75 will be distributed to the bidders in proportion to the amount of their bids. For example, if the first bid was for $20, the premium paid on that bid would be $0.50 (5% of the $10 difference between the $20 bid and the $10 start price), if the second bid was $24, the premium paid on that bid would be $0.20 (5% of the $4 difference between the $24 bid and $20 bid it surpassed), and the premium paid on the winning bid would be $0.05 (5% of the $1 difference between the winninng $25 bid and the $24 bid it surpassed).
If a seller ran a similar auction with a 25% bid premium instead of the default 5% and the item was bid up to $40, the seller would be charged $7.50 for bid premiums (25% of the $30 difference between the $40 selling price and the $10 start price). In this case, the seller would net $32.50 and $7.50 would be distributed to the bidders. For example, if the first bid was for $25, the premium paid on that bid would be $3.75 (25% of the $15 difference between the $25 bid and the $10 start price), if the second bid was $35, the premium paid on that bid would be $2.50 (25% of the $10 difference between the $35 bid and the $25 bid), and the premium paid on the winning bid would be $1.25 (25% of the $5 difference between $40 and $35). All things equal, a bid premium of 25% should be 5 times more attractive to bidders than a bid premium of 5%.
These simple examples provide an idea of how a bid premium works, but it is actually somewhat more complicated. Please contact info@amextllc.com for more information. If you would like to try out a bid-premium auction, please visit the Auction Market here. The Auction Market is an ongoing development project, but please note that it auctions real items for real money, so please do not list an item or bid on an item unless you are serious about selling or buying it.
Copyright 2005 AMExT LLC. All rights reserved
Contact: info@amextllc.com
Patent pending.