Steel Auction Overview

Auctions can provide an efficient and effective method for selling anything that buyers value differently. Auctions can accelerate the negotiation process by quickly determining which buyer has the greatest interest in an item. Auctions where only the price determines whom the seller deals with, can minimize a bidder’s concern that the seller has a hidden agenda that determines who he sells to.

The purpose of an auction on Steel Spider is to determine for the seller the highest bid for an item and the identity of the highest bidder among those the seller has authorized to bid. Our auctions are live, ascending, invitational auctions. The duration of the bidding period is fixed and is not extended. Auctions are invitational in that the supplier invites the buyers who can bid in the Auction. You will not be able to bid unless you have registered and the seller has authorized you to bid.

The identity of the bidder with the high bid for an item is identified only to the seller. Only buyers invited by the seller can bid in his auction. The identity of the participating buyers is not disclosed during or after the auction. The seller and the high bidder contact each other after the auction is completed to consummate transactions. In the event of tie bids the earlier submitted bid is applied. The Seller can cancel an auction at any time prior to the close of bidding. Steel Spider can cancel an auction during (or after) an auction including when there are (or were) technical difficulties that make it difficult for one or more bidders to place their bids. The auction will be deemed null and void and the auction may be re-run.

A bid is considered to be the amount the bidder is willing to pay. The auction ends at the time set by the seller and is not extended. The high bidder is expected to pay the amount he bid. Proxy bidding does not apply.

Become familiar with how an auction is run and the bidding process by trying the Single Item Practice Auction and the Multi-Item Practice Auction. You can assume the role of the seller, one of three invited bidders or that of a visitor in these auctions. The bidding period for practice auction is 5 minutes. During and after the auction is over you can see what the seller and the other bidders would see in the auction.

Some auctions run on Steel Spider are visible only to those who have been authorized to bid. A seller may elect to make the auction visible so buyers who have not been authorized can request entry in that or subsequent auctions. In Receive Auction Notices under Auctions you can be notified by a supplier when he has made his Auction visible to non-authorized bidders. You can enter and view the auction (but not bid) and consider whether to contact him about being included as an approved bidder.

We provide platforms for sellers to run single item and multi-item auctions. Sellers set up an auction in Start Single Item Auction or Start Multi-item Auction under Auction. Sellers identify the authorized bidders by adding their email addresses to your Contact List using Manage Your Contact List under Personalize. When you set up your auction you identify which Group of contacts is authorized to bid.

To set up a Single Item Auction a seller uses the form to describe the item you are selling and identify the parameters that apply to your auction such as minimum acceptable price, bidding period end time and approved bidders. Currently there is no charge for a seller to run Single Item Auctions. There is no buyer's premium, fee or commission applicable to the bidders either.

For Multi-Item Auctions the seller provides a file describing his steel much in the same manner as files are provide with the Automatic Data Entry Process. Contact us if you are interested in having us provide you with the capability to run Multi-Item Auctions. These auctions need to be tailored to the seller's particular product and automated so he can periodically run these auctions. We charge a seller a flat fee of $300 to run a Multi-Item Auction. There is no other buyer's premium, fee or commission applicable to the bidders or the seller.

Guidelines for Buyers

Before you bid, clarify with the seller any questions you have regarding the items at auction as well as the terms and conditions that apply should you be the high bidder for any items. Terms and conditions, payment terms, delivery terms, specifications, etc. should be resolved between the buyer and the seller before the auction takes place. Steel Spider is not a party to any transactions.
Your bids can't be withdrawn. Take care when making your bid that you do not make a mistake.
Call or email Steel Spider regarding any questions about the auction format or the bidding process. Contact the seller regarding questions about the item at auction and the terms that apply to the transaction.
Use the Single Item Practice Auction and the Multi-Item Practice Auction to become comfortable with the bidding process.
If items you were interested in were sold to someone else, consider checking on the availability of similar items on Steel Spider under Search Multi-Supplier Inventory.
After the close of the auction if you were the high bidder, contact the seller to consummate the transaction.
Payment is made to the seller, not Steel Spider.

Guidelines for Sellers

The seller is responsible for all dealings with the buyers. Promote your auction to the authorized bidders. Give each bidder ample opportunity to review and understand what you are offering and the terms of sale that will apply.
Establish terms and conditions with each bidder. Steel Spider is not a party to any transactions. At the close of the auction, the seller needs to contact the high bidder to discuss contracting for the item.
Maximize the number of buyers who participate in the auction. If a particular buyer is a substantially higher credit risk, has performed poorly in the past or is higher maintenance than the other bidders, it may be wise to exclude this bidder.
Don't expect bidders to find your auction on a website. You need to contact them.
Treat the invited bidders list as confidential information. Don't let others know who may be bidding. When the auction ends, don't disclose who participated or won. You and the winning bidder should want this information kept confidential.
Don't rely solely on auctions to sell your steel. Auctions should complement direct negotiation.
Revenue received at auction is a function of the number of participants and their willingness to bid their true value. If you make your auction public, potential bidders can see your auction and contact you about participating. Also advertising similar items on Steel Spider under Inventory and Offerings can help you identify additional potential bidders in future auctions.
Reduce the bidder's uncertainty about the value of the item at auction by providing as much information as you can which will help the bidders determine their true value for the item.
The seller can not bid. Don't allow companies that are affiliated with you to participate as bidders either. The perception that false bidders are able to bid and artificially inflate prices can discourage buyers from participating in your auctions. A seller's incentive to bid or use a false bidder is reduced since we do not disclose to the seller who the second highest bidder was.
Bids can not be retracted. While the seller can cancel an auction and start over, all bids will need to be resubmitted.

Additional Considerations

The seller establishes with each buyer, the terms and conditions that apply should the buyer be the high bidder for an item.
Steel Spider acts as a venue to allow North American companies to offer, sell, and buy steel and other products in an auction-style format. Steel Spider is neither a principal interested in the transactions, nor an agent of Buyer or Seller.
Steel Spider is not the market maker for any items sold at auction using the auction platform. We do not identify or pre-qualify bidders. Steel Spider is not a traditional "auctioneer".
We are not involved in any transactions that result from the use of the auction platform. We do not contact the bidders to encourage that they improve their bids. We do not set the contractual terms between the buyers and the seller. Steel Spider has no control over the quality or legality of the items advertised or the truth or accuracy of the postings or the ability of sellers to sell items or the ability of buyers to buy items. We cannot ensure that a buyer or seller will actually complete a transaction.
Click here for Terms and Conditions relating to the use of the site.

Steel Spider Auction Design Considerations

Our Auctions are invitational.

Our Auctions are invitational to cause the seller to identify the bidders he is willing to sell to. Due to the high value of the items at auction and the nature of steel, the seller needs to know the buyer before he commits to selling to him. By making the auctions invitational the seller can elect to sell to the bidder using the same payment, delivery and other terms as they have used with each other in the past. This also helps the buyer and the seller to build a relationship with each other.

Unlike our auctions, with auctions for steel where the seller does not know the identity of the winning bidder until the auction is over, the seller will often either reserve the right to not sell to the highest bidder or require cash in advance of delivery. Requiring cash in advance may limit the number of potential bidders. Reserving the right to not sell may raise concerns among the bidders that the high bid may not be the determining factor on who wins.

Simply by having a bidder in the auction that the seller will not sell to (false bidder) distorts the auction process even if that bidder is not the high bidder. His bids may have caused another bidder to raise his bid higher than necessary to beat those bidders acceptable to the seller. An auction that allows a seller to decide after the auction was over to whom he would sell, is designed with the assumption that there will be "false bidders" to the possible benefit of the seller and to the possible detriment of the "real bidders".

Making the auction invitational can not ensure that the seller will always only have qualified bidders in the auction. However, making it invitational, deciding the outcome solely on the basis of bids received and not disclosing the identity of the other bidders on the item reduces the incentive for a seller to include bidders he can not or may not want to sell to.

The Seller's reserve price is disclosed.

The bidding starts with the seller's bid to keep the item. The initial bid is the minimum amount the seller wants for the item, less the minimum bid increment. When a bid is made that exceeds the initial bid by more than the minimum bid amount the high bid will be equal to or higher than what the seller needs to sell the item. If the seller wants the bidders to make their best offers, he should be also willing to declare the minimum he will take for the item.

By disclosing the seller's minimum acceptable bid, we encourage bidders to bid if they value the item by more than the seller's minimum. There is no hidden seller's reserve price. Buyers don't need to waste their time making small incremental bids just to find out the sellers minimum acceptable bid.

The seller can not change his reserve price (minimum acceptable bid) after the auction has started. If his reserve price was too high and an item doesn't sell, the seller can rerun the auction with a lower reserve price.

We do not disclose the identity of the winning bidder to the other bidders.

If we disclosed the identity of the winning bidder, other bidders might elect to not bid and take their chances at buying the item from the winning bidder.

We do not disclose the identity of the second highest bidder to the seller.

If we disclosed the identity of the second highest bidder to the seller, he might be tempted to bid or let false bidders bid to increase apparent high bid. After the bidding closes, the seller might be tempted to offer the item to the second highest bidder.

We do not allow the seller to bid but catching a seller bidding in his auction is problematic. If the seller only invited a small number of bidders to the auction he might be able to determine the identity of the second highest bidder. If you were an unsuccessful bidder for an item and are offered an item by the seller later, we recommend that you don't buy it. Have the seller run the auction again and you can decide whether and how much to bid in the new auction.

The seller and the buyer maintain their relationship.

Our auction platform is designed determine for the seller the highest bid for the item and the identity of the highest bidder among those the seller has authorized to bid. The auction platform is intended to determine for the seller who wants the item the most.

The buyer and the seller are expected to agree before the auction is over whether or how the transaction will be consummated based on the outcome of the auction. Steel Spider is not a party to this transaction. We have no interest in trying to compel either party to complete a transaction. However, it is in both the seller's and the bidder's interest to complete the transactions if they desire a continuing relationship with each other.

Should a seller find that a bidder does not wish to buy the seller can exclude him from further auctions. The seller can run the auction again with fewer bidders. Should a seller elect not to sell, the bidder can decide not to bid in future auctions. This auction structure also provides some negotiation flexibility after the auction is over to both the bidder and seller, such as in situations where a bidder won more that his credit limit or less than a truckload.

Our Auctions have a fixed bidding period.

The bidding period is not extended in our auctions. The auction ends at a fixed time and late bids are ignored. Generally bidders are busy and don't have the time to watch the bidding progress in a particular auction where the bidding period extends. Most would like to put in their bid and return at the close of bidding to see how they did.

This fixed bidding period permits an activity called sniping where bidders make their bids at the last moment so other bidders have little or no time to respond with a counter bid. Some bidders believe that there is an advantage to bidding at the last moment either to beat another bidder who fails to get his bid in or to beat a bidder who has not submitted his best bid and is waiting to see where the pricing goes. If there is an advantage in waiting until the last moment to bid, we let the bidders enjoy this advantage. The risk they take is that they call it too close and the action closes before their bid is received.

Immediately after the bidding period ends the auction platform determines the high bid. The auction results are displayed immediately. The seller can see the high bid and the email address of the high bidder. The each bidder can see the high bid for each item and whether he was the high bidder for the item. Because the seller sets the reserve price and approves the bidders the auction results are solely determined by the bids made during the bidding period. The auction results are available to the seller and the bidders immediately after the bidding ends.