The software handles bidding by standard auction bidding rules but also has a proxy bid feature. The proxy bid feature allows the bidder to enter the maximum amount (any amount greater than the current minimum bid) they are willing to bid for an item. This proxy bid is kept confidential from other bidders and sellers. When a "proxy" bid is entered into the system that bid is stored in the database and that value is the maximum possible bid for that bidder for that auction (unless raised further). The system will then use that proxy amount to compare to subsequent bids made into the system on that auction to make bids for that proxy bidder up to the max amount of their proxy bid.

When making a bid the system has many conditional checks built in to tell it what needs to be done.

Current bid is less than the current minimum bid This bid is rejected by the system and the bidder is prompted by the system to raise their bid to at least the minimum bid. Note that in the fast pace bids sometimes come to the system towards the end of an auction your current bid may have been the minimum bid when you click the "bid now" button but could not be the minimum bid by the time the bid is checked against the current minimum bid. Someone may have just entered a bid just before you did. No emails are prompted by a failed bid.

Current bid equals the current minimum bid and no proxy bid currently in the system This bid is entered into the system at the minimum bid amount and the bid increment is used to increase the current minimum bid by the amount of that bid increment. The current bidder is notified by the bid success page that their bid has been received. An email is also sent to this client notifying them they are the current high bidder on this auction.

Current bid greater than minimum bid but less than reserve price or no reserve price and no proxy bid currently in the system If the reserve bid is greater than the current bid the minimum bid is entered as a bid for the current bidder and max value of the bid is entered into the system. There is a beta switch (less_tan_reserve_straight_bid) in the Enterprise editions where if this same situation happened the bid would automatically be entered at the maximum amount with no proxy bid saved. If there currently is no reserve on the auction the current bid is entered as a proxy bid. The current minimum is raised above the bid entered into the system by the bid increment value setup within the admin tool. The current bidder is notified they are current winning bidder. If there was a current winning bidder before the current bid they are notified that they have been outbid.

Current bid greater than minimum bid and greater than reserve price and no proxy bid currently in the system If the reserve bid is lesser than the current bid and this is the first bid to reach or exceed the reserve the minimum bid is "skipped" and the bid for the current bidder is entered at the reserve price value and if the current bid exceeds the reserve price that current bid value is entered as a proxy bid. The system then uses the reserve price to determine the current bid increment, adds that bid increment to the reserve price and that is made the current minimum bid amount. If there was a current winning bidder they are notified by email they have been outbid. The current bidder is notified they are the current winning bidder by the bid notification screen and by email.

Current bid greater than the minimum bid and there is no reserve price and no proxy bid currently in the system The minimum bid value is entered into the system as a bid for the current bidder and the excess amount is entered as a proxy bid for the current bidder. The current minimum is raised above the bid entered into the system by the bid increment value setup within the admin tool. The current bidder is notified they are the current winning bidder by the bid verification screen and by email. If there was a winning bidder they are notified by email they have been outbid.

Current bid is equal to the minimum bid and there is a proxy bid currently within the system The current bid is compared to the proxy bid as proxy bids can be "between bid increments". If the bids are equal both bids are entered into the system at the same amount but the proxy bids is entered first into the system. This allows the proxy bidder (being the first bidder at this amount) to be the winner if the bidding ends at the current bid amount. If the current bid is still less than the proxy bid the current bid is entered into the system for the current bidder. Now the system must counter bid for the proxy bidder. The bid increment is then added to the current minimum bid to get the next minimum bid amount. If the new minimum bid is greater than the proxy bid (because the proxy amount can be between increments) a bid for the proxy bidder is entered by the system at their max amount and their proxy bid removed from the system. The bid entered into the system (max proxy or new minimum) is then used to get the bid increment and add it to the bid entered into the system for the proxy bidder to determine the new minimum bid. If the new current minimum bid is still less than the proxy bid a proxy bid is entered into the system at the new current minimum bid and again the bid increment is used on the new bid to get the even newer minimum bid. Hope that makes sense as two bids in a row were entered into the system, one for the current bidder at the minimum bid and then another bid for the proxy bidder. If there is a new winning bidder then they are notified they are the new winning bidder and the old proxy bidder is notified they have been outbid. If the current bid is still not the high bidder they are notified they have been outbid in the bid verification screen and by email.

Current bid is greater than the minimum bid and there is a proxy bid currently within the system

If this happens the current proxy bid and the current bid are compared. If the proxy bid is greater than the current bid the current bid is entered into the system at that amount. The system then uses that bid amount to get the current bid increment. That bid increment is added to the current bid to get the new minimum bid. If the proxy bid is still greater than the new minimum bid a bid for the proxy bidder is entered at the new minimum bid amount. That bid is then used to get the current bid increment and adds to that amount to get the new minimum bid for the current auction.

If the proxy bid is less then the current bid the proxy bid is entered into the system at the max amount for the current proxy bidder. That bid is then used to get the current bid increment which is then added to it to get the next minimum bid. If the new minimum bid is still less than the new current bid a bid is entered for the current bidder at that amount and the current bid is placed in the system as the current proxy bid for the current bidder. The system then uses that bid to get the current bid increment and adds that value to it to get the new minimum bid. The current bidder is notified they are the new winning bidder by the bid verification screen and by email. The proxy bidder just outbid is notified they have been outbid by email.

If the current bid and the proxy bid are equal both bids are entered into the system at the same amount but the current proxy bid is entered into the system first so that they can be the winner if the auction ends at the current price. The current bid is used to get the current bid increment is added to the current bid to get the new minimum bid. The current bidder is notified they have been outbid by the bid verification screen and by email.

When the reserve price has been reached or exceeded When the reserve price has been exceeded the auction is now a "successful" auction and will conclude with a winning bidder. Once the reserve is met both the winning bidder(s) and the seller are prompted to leave feedback for each other. Both only need to go to the feedback section of their user management client side control panel to find the prompt waiting.

When there is no reserve price The auction is considered successful if any bids were received

If the reserve price is never reached or exceeded during bidding The auction is not a successful auction and there are no winning bidders despite the currently in the system. The seller is not obligated to sell the auctioned item/service to the highest bidder. No feedback can be left for the seller or the buyer under these circumstances so both will have no "protection" within the system if a transaction is concluded outside of the system.

Winning Bidder Cannot Bid Against Themselves

The system does not allow the current high bidder to "bid against themselves" raising their own bid. But within the Enterprise Edition there is a beta switch (allow_bidding_against_self) that if turned on would allow the client to raise their own bid

The system then places bid on behalf of the proxy bidder in amounts necessary dictated by bidding increments and the maximum amount of the proxy bid to maintain the proxy bidder as the high bidder up to their maximum. The proxy bid can only be outbid by a higher maximum bid. Below is an example which hopefully will illustrate a bidding scenario.

Bid setup in the admin:

- Bid increments are set to $1

An example auction:

- Starting bid is $5.00 - Reserve price is $20.00

Bidding:

1. User A bids a proxy of $30.00
2. Current bid is then set to $20.00 and minimum next bid is $21.00. NOTE: The current bid is $20.00 and not $5.00 because the reserve price is $20.00. If there was no reserve price the current bid would be $5.00 and the minimum bid $6.00. Any bid higher than a reserve bid will automatically push the bid to the reserve price to make sure the auction closes successfully. Also if the the User A bid was less than the $20.00 reserve price the current bid would be that bid and the minimum bid would be that bid plus $1. A proxy bid for user A has been saved within the system. Example: User A bids $15.00. The current bid becomes $15.00 and the minimum next bid becomes $16.00 but the reserve price is not met.
3. User B bids $50.00 after User A bids. The current bid becomes $31.00 and the minimum next bid becomes $32.00. The $30 proxy bid for user A has been removed and a proxy bid for user B has been entered into the system. NOTES: The software automatically applies the bids for each user and continues until one loses.
4. User C then bids $55.50. The current bid becomes $51.00 and the minimum bid becomes $52.00. The proxy bid for user B is removed and a proxy bid of $55.50 for user C is entered into the system.
5. User D then bids $60.00. The current bid becomes $56.50 and the minimum bid becomes $57.50. The proxy bid for user C is removed and a proxy bid of $60 for user D is entered into the system. NOTE: The software accepts the bids in the amount submitted and then applies the bid increment to that amount.
6. All users are notified of this process as it is occuring so that they can re-submit a bid if they are outbid.

If the auction were to close immediately after User D's $60 proxy bid the bid history should look like:

User A $20.00
User A $30.00
User B $31.00
User B $50.00
User C $51.00
User C $55.50
User D $56.50 - winner

NOTES: The software also has the ability to extend auctions if a bid is placed within a certain time from auction closing. This is a feature that must be set to operate within the admin tool. This will prevent bid sniping.

An auction ends in one of these scenarios

• The auction expiration time is past. The system automatically checks to see if there were any winning bidders and notifies them. The seller is notified of the success or failure of the auction
• There is a successful buy now bid excepted on a standard auction. The buy now bidder is notified they won and the seller is notified of a successful auction closing.
• The seller ends their auction early. The seller can only do this if you allow it within the admin tool. If the auction is manually ended by the seller no one is notified that the auction has ended. There is no winner if the auction is prematurely ended.
• The admin ends an auction. You can reserve "auction removal" privileges only to the admin if you wish. There is no winning bidder and the seller is not notified of the auction ending.
• The count of items sold within an inventory item auction reaches 0. The bidder/winner of each item purchased is notified when they complete their bid. The seller of that auction is notified of each successful buy now bid. But in this case the auction can stay live until expiration or until the item count reaches 0.
• All of a specific users auctions can expire prematurely if they are within a subscription based price plan, their site subscription expires and you have that price plan set to expire listings when subscription expires.