A dutch auction (also called a multiple item listing) can get confusing if you haven't taken the time to understand the process.  This guide is designed to help you win without outbidding yourself in a dutch auction.

Let's say a seller has 10 dinner plates to sell.  Some buyers may only want one to replace one they broke, while someone else may want all 10 to start their own set.  A dutch auction allows the seller to offer the plates in such a way that the buyer decides how many they want to win.  It benefits the buyer because they get exactly how many they want, and benefits the seller because they open the bids to all people who may be interested in the plates, regardless of how many they need.

You may be used to placing a proxy bid on regular auctions.  This is good for regular one-item auctions, but ebay's automatic bidding system cannot be used in dutch auctions.  To see ebay's page explaining the full details of their automatic bidding system, see proxy bidding .  Basically what it boils down to is - in a dutch auction, the amount you bid is the amount you will probably pay.

Using the 10 plate scenario, let's say the plates have a starting price of $4.99 each.  If you want all 10 plates, and bid $7.00 each - then you pay $7.00 each even if there are no other bidders.  However, if you only want 4 of the plates and bid $7.00, but someone else who wants all 10 of the plates only bids $4.99, you will win the 4 plates you want at $4.99.  The second bidder will be offered the remaining 6 plates at $4.99.  This is because the winning bidders are chosen by the highest bid price, but winning bid price is equal to the lowest winning bid amount.  Since you bid higher, you get the quantity you wanted for the lowest winning bid, and the second bidder has the option of taking the remaining quantity at their bid.  Since the quantity the other bidder wanted is not complete, they can accept the remaining plates, or choose not to take any. 

If there are two bids for the same amount, the earlier bid gets priority, so it is a good idea to bid early and bid low.  You can always go back and bid higher if you are outbid, but once you place a bid you cannot reduce the amount. 

Please take a second to vote yes if this guide has helped you understand the dutch auction process. Thank you!