How does a Sealed Bid auction work?

The sealed bid model allows for private and discreet price discovery.

Understanding Sealed Bid mechanism for your actions

Sealed bid auctions are a type of auction where bidders submit their bids privately, and the highestbidder wins the auction. This auction model provides a private and discreet way for buyers to participatein an auction without revealing their bid to other participants. This can encourage buyers to submit theirhighest bids, which can lead to higher final prices for the item being sold.

The process:

Step 1

Auction set up

The auctioneer sets up the auction by defining the item being sold, the auction duration,and the terms and conditions of the auction. The auction is then listed on the auction platform ormarketplace.

Step 2

Bidding process

Interested buyers submit their bids privately to the auctioneer or through the auctionplatform or a marketplace. The bidders can only submit one bid and are unaware of the bids submitted byother participants.

Step 3

Price increase

When the auction duration ends, the auctioneer opens the bids and declares the highest bidder as the winner of the auction. The buyer pays the final price, and the auctioneer completes the transaction.

Step 4

Auction closure

After the auction is over, the auction platform or marketplace may provide additional services, such as payment processing and arranging shipping.

Why Sealed Tender/Capacity auction model?

The auction marketplace software and the tender/capacity auction model can be an effective tool in thecommodities industry to allocate supply or demand for a particular commodity