Auction What Is A Soft Close Auction?

A soft close auction is a type of auction where the closing time is extended if a bid is placed shortly before the auction is set to end. This mechanism is designed to prevent “sniping,” which is the practice of placing a winning bid in the final moments of an auction, giving other bidders no opportunity to respond.

Here’s how a soft close auction typically works:

1. Initial End Time: The auction has a set closing time, just like a traditional auction.
2. Bid Extension: If a bid is placed within a specified period (often a few minutes) before the auction’s scheduled end time, the auction is extended for an additional time period (e.g., another few minutes).
3. Repeat Extensions: This process can repeat multiple times. Each time a bid is placed within the extension period, the closing time is pushed further out.
4. Final Close: The auction finally closes when no more bids are placed within the last extension period.

Benefits of a Soft Close Auction

• Fairness: It ensures all interested bidders have a fair chance to place their bids, preventing last-second sniping.
• Maximized Value: By extending the auction time with each new bid, it can drive up the final sale price, as bidders have more time to compete.
• Encourages Participation: Knowing that they will have a fair chance to respond to competing bids, more buyers may be encouraged to participate.

Example Scenario

Imagine an auction set to close at 3:00 PM. If a bid is placed at 2:59 PM, the auction might extend until 3:04 PM. If another bid comes in at 3:03 PM, the auction extends again until 3:08 PM, and so on. The auction only closes when no new bids are placed within the final extension period.

How Is The Extension Period Determined In A Soft Close Auction?

The extension period is typically predefined by the auction house. Common extension periods range from 2 to 10 minutes, depending on the auction’s rules.

Are Soft Close Auctions Common?

Yes, soft close auctions are common in online auctions and are increasingly used in various auction formats to ensure a fair and competitive bidding process.

How Should Bidders Approach A Soft Close Auction? 

Bidders should be prepared for the possibility of extended bidding periods and stay engaged until the auction officially closes. It’s important to monitor the auction closely and be ready to place additional bids if needed.

How Do You Win A Soft Close Auction?

Winning a soft close auction requires a strategic approach and active participation until the auction officially closes. Here are some key steps to increase your chances of winning a soft close auction:

Steps to Win a Soft Close Auction

Understand the Auction Rules: Before participating, familiarize yourself with the auction house’s rules, including the length of the extension period and any other specific terms.

Set a Maximum Budget: Determine the maximum amount you are willing to spend on the item, including the buyer’s premium and any additional fees. Stick to this budget to avoid overspending in the heat of the moment.

Monitor the Auction Closely: As the auction nears its scheduled end time, keep a close watch on the bidding activity. Be prepared for the possibility of multiple extensions if last-minute bids are placed.

Place Strategic Bids: Place your bids strategically rather than impulsively. Consider placing higher bids to discourage other bidders, but always within your budget limit.

Stay Engaged During Extensions: In a soft close auction, the auction can extend multiple times if bids continue to come in. Stay engaged and be ready to place additional bids during these extension periods.

React Quickly: Be prepared to react quickly to new bids, especially as the auction nears its closing moments. Quick responses can keep you in the running and maintain your competitive edge.

Use Auto-Bidding: Alex Cooper’s auction platform offer auto-bidding options where you set your maximum bid, and the system automatically bids on your behalf up to that amount. This can help you stay competitive without constantly monitoring the auction.

Stay Calm and Focused: It’s easy to get caught up in the excitement of bidding. Stay calm and focused on your strategy and budget to avoid making impulsive decisions.

Take Away

Soft close auctions are designed to ensure fairness by extending the auction time if a bid is placed shortly before the scheduled end. This prevents last-minute sniping and allows all participants a fair chance to place their bids. To win a soft close auction, it’s crucial to stay engaged and respond quickly to bids, as the auction can extend multiple times. Understand the rules, set a maximum budget, and place strategic bids to stay competitive. By being prepared and proactive, you can navigate the dynamic environment of a soft close auction and increase your chances of securing your desired item.