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Auctions are public sales that offer products at a variable price. Auctions can be held online, or at an auction house. In any auction the key players are the auctioneer (seller) and the bidders (group of buyers). The auctioneer establishes the starting price, ad the bidders offer increasing amounts they're willing to spend. The highest bidder gets the item up for bid.

Many people find auctions to be exciting ways to shop. Others flock to auction sales for the opportunity to buy unique merchandise or collector items.

Today's auctions fall into two popular categories: traditional sales and online auctions. The only real difference in an online auction is that the auctioneer is a web server. The online server stores the bids and sends confirmation via email to the highest bidder.

Online auctions offer many benefits to buyers. Where traditional auctions involve a certain amount of risk, buying through an online auction lets the buyer research the item thoroughly before placing the bid. Buyers are given more time to compare prices and quality. In addition, online auctions incorporate a universal audience, so products from every corner of the world are up for bid, from cars to collectibles to computers.

Here are some tips to successful bidding in an online auction:

* Research: Before placing your bid, it's wise to check the reputation of the seller. Many online auction sites offer feedback ratings from previous buyers. Check the seller's location before you buy. Transactions involving people from other countries can be complicated and expensive, due to shipping, handling, duties and taxes. Check the quality of the product and compare prices before you bid.

* Budget: When you've researched the item, set a reasonable maximum bid amount. Write it down and post the note near your computer. Base the amount on the condition and value of the item, and don't let emotions take over common sense.

* Payment: Ask if payment by credit card is an available option, and be wary of sellers that only accept payment by money order or cheque. Using a credit card is more convenient and offers more security to the buyer, as the sale can be disputed if something goes wrong with the transaction.

* Privacy: It is possible and advisable to keep confidential information including your name, email address and purchases hidden. This is a good option for those not wanting to disclose their purchase history.

* Convenience: If you don't have time to stay online and follow the auction closely, you can opt for proxy bidding. In an online auction with proxy bidding, the system will update your offers by predetermined increments whenever you are outbid. For example, if you are willing to pay fifty dollars for an item that's currently offered at fifteen dollars, you can set the system to do the bidding for you until the maximum price of fifty dollars is reached. You'll receive an email confirmation to let you know if you've won the item, or an email notice telling you that you've been outbid.

Traditional auctions share the same basic principles as online auctions. The only difference is in the venue and parties involved. The sale is held at a retail outlet, residence or auction house, with a live auctioneer and a group of bidders. At a traditional auction, the goods are on hand and bidders are usually able to inspect the items before the sale begins. The anxious bidders and the fast-talking auctioneer can overwhelm first-timers. Here are some tips to help with your auction experience:

* Limit: Set your spending limit and stick to it. Auctions are great for finding bargains, but only if you're able to spend your money wisely. Don't let emotions and competitiveness drive up your bottom line.

* Price: Take small steps, and start the bidding at a modest amount. The purpose of an auction is to drive the selling price up, so placing your maximum bid right off the top just doesn't make sense. Other bidders might not be interested in the item you want. Start with a small bid and if interest is low, you can pay a lot less than you were willing to spend.

* Product: Wise bidders choose the products they'll buy long before the bidding begins. Look over the auction list, decide which items you want to purchase, and stick to your list. This is systematic approach help you to buy what you want, without purchasing more than you need.

Everyone loves a bargain, and auctions have been matching eager buyers with willing sellers for many, many years. Whether you choose traditional or online auctions, you can find the item you've been looking for, at a great price.