What does it mean if a sale is advertised as an "auction"?

When a sale is advertised as an "auction," it typically refers to the process of selling items to the highest bidder, which is generally understood to mean that the items are being sold with a reserve. A reserve auction is one where the seller has set a minimum price that must be met for the sale to take place. If bidding does not reach this minimum, the seller is not obligated to complete the sale.

In contrast, other formats of sale—such as selling without reserve, where items must be sold to the highest bidder regardless of the final bid amount; selling at a fixed price, where items have a set price that buyers can accept or decline; and sealed bids, where buyers submit confidential bids without knowledge of other offers—do not align with the traditional concept of an auction setting. An auction implies competitive bidding, which is more commonly associated with reserve sales that protect sellers from underselling their items. This understanding helps clarify the nature of auctions in the marketplace and the expectations surrounding them.