The first thing that I thought of when we discussed auctions in this class was the online auction site, eBay. Having sold a fair share of items on the website, I am familiar with the processes and the transactions that occur there. There are many different ways to sell an item on eBay, but I am going to address the three most popular auction types. There are descending-bid auctions (or “Dutch” auctions), first-price sealed bid auctions (also known as “Best Offer” on eBay), and second-price sealed-bid auctions (a regular styled auction on eBay). As a seller, there are different ways to maximize your profit based on the item(s) you are selling. But first, a little background on the auctions and how they are present on eBay.
     First, the descending bid auction, or the “Dutch” auction. This is where the seller lowers the price until a bidder accepts the price. Then there is the first-price sealed-bid auction, in which bidders submit offers simultaneously to the seller. The highest bidder wins and pays the value of their bid. Lastly, there is the second-price sealed-bid auction, where the highest bidder pays the value of the second highest bidder. So how are these prevalent on eBay and how can you apply them to the item or items you are selling? 
     For a seller who has bulk items to sell, the Dutch auction is the best choice. For example, if a seller has an order of 100 hats, he could start the auction/bidding at $5 and let as many people bid as many times as they wanted. Several people could bid, and once the auction ended, the lowest bid (in this case, $5) is the price everyone who bidded would get the hat for, even if they bidded higher. This allows a seller to rid themselves of a surplus of items, while saving time selling in bulk. 
     For a seller who has a single item to sell, the first-priced sealed-bid auction is the best. This is the “Best Offer” auction option on eBay. Some people may think the second-price sealed-bid is the best, but that benefits the buyer more than the seller. Here is why a second-price sealed-bid auction is not the best auction type for selling a single item: in a second-price sealed-bid  auction, buyers can get away with paying less for an item than it is worth, or less than what the seller thinks the item is worth. If the bidding on an item does not drive its price up, the seller may actually end up losing money on the item. So unless the second-highest offer on the item is equivalent to or more than the actual value of the item being sold, the seller will lose money. Clearly, in order for a seller to break even or make profit, the seller must choose a first-price sealed-bid auction, where bidders submit their “best offers” on the item. The seller can choose which offers to reject, and he/she is able to select the bid of the highest value, thus able to maximize his/her profit on the item.
     So next time you find yourself as a seller on eBay, take into account the different styles of auctions they have to offer. As a seller its all about maximum payoff and getting the most money you can. For bulk items, the Dutch auction is the way to go. However, if only selling a single item, choose “Best Offer” and see how much people are willing to pay for your item, and choose the highest value. With this knowledge, you’ll be rich in no time.

Reference: http://www.dummies.com/how-to/content/tuning-into-types-of-ebay-auctions.html