How An Auction Works

Overview of an auction

An item is consigned by its owner to an auction house for sale. After the item is appraised, the auctioneer will place the item up for bid, starting at a low price to generate bidding activity from prospective bidders. When the item is up for bidding, prospective buyers will submit their bids, one at a time. With each bid the price of the item will increase until no other bidders are willing to submit a higher offer, and then the item sells to the highest bidder. The activity at auction drives demand for the item, producing a gamification where each bidder has the opportunity to win the item they desire by outbidding other bidders.

As early as 500 B.C. the first known records of auctions came from scribes in ancient Greece.

In 1600, almost a millennium later, the first American auctions began dating back to early Pilgrim settlements. Auctions were popular as a fast and efficient means of converting assets to cash and used for selling crops, imported goods, livestock, tobacco and more. 

In 1674, the first auction house, Stockholms Auktionsverk, was founded in Sweden.

In 1744 London Bookseller Samuel Baker, founder of Sotheby’s, held his first auctions-the sale of a library belonging to Sir John Stanley.

In 1759 The first auction catalog was published by Sotheby’s.

1790: By the end of the 18th century, auctioning works of art was commonplace in taverns and coffeehouses.

By the1950’s auctioneering began to take hold in the post-WWII era in a booming American economy. Demand needs for real estate and personal property needs to be moved more quickly than the private market will allow.

In the 1980’s the first online auctions were held- before the release of the first web browser! Instead users traded through text-based newsgroups and email threads. 

1995 brings about the first web-based auctions.Ebay was founded

2014 6 leading auction houses partner to launch Bidsquare.com

2024 After leading online auctions for 10 years and growing into a software partner for Auction Houses globally, Bidsquare celebrates its 10th anniversary!