Internet users can purchase virtually everything via online auctions. Auctions range from computers, to collectibles to real-estate. www.eduuka.com is the leading auction site in Uganda, and essentially it is a marketplace where buyers and sellers can interface.

Online auctions typically last for a fixed period of time, usually seven days. Bidders enter the highest amount they are willing to pay for an item. The highest bidder at the close of the auction earns the right to purchase it at the agreed price. All of these seem straightforward, but the nature of the bidding is something that few people are aware of.

Now what is Proxy Bidding?

Eduuka, along with some other popular auction sites, employs the use of proxy bidding. Perhaps the easiest way to explain proxy bidding is to provide an example. Suppose that a seller has listed some a Shoes for sale on www.eduuka.com and the auction ends on Friday. Sometimes there are many people that are interested in an item but for the sake of simplicity, let's assume that there are only two people interested in this particular auction: Paul and John.

John discovers the auction on Monday and places a bid for 500shs. On Tuesday, Paul notices the auction and sees that someone else (John) has already placed a bid. Paul is interested in purchasing the Shoes, but he won't be able to monitor the auction since he is very busy. So instead of entering 500sh. as his bid (he couldn't bid 510shs because eduuka.com has minimum-increment requirements), Paul enters 550shs. He enters this as a regular bid, but only eduuka.com 'knows' this amount - it isn't revealed to anyone else. On the auction listing, Paul is shown as the highest bidder with a bid of 550shs even though he bid much more. Eduuka has placed the lowest bid possible on behalf of Paul.

On Wednesday, John checks the listing again, and sees that he has been outbid, and so he places a bid of 520shs, but seconds later he sees that the highest bidder is listed as Paul for 521shs. Eduuka.com has instantly placed a bid on Paul's behalf - again the lowest amount possible to remain the high bidder. John is frustrated and continues to place bids; the process continues until John reaches 550shs at which point he gives up. No other bids are placed, and when the auction closes, Paul is pronounced the winner for 521shs (one bid increment higher than John's highest bid) even though the bid he entered was 550shs.

So you can see that on those sites that use proxy bidding, it is safe to bid as much as you are willing to pay for an item. You are only going to have to pay one-bid increment more than the highest opposing bidder. Of course, if someone outbids your maximum bid, then you will not win the auction.

You are clearly at an advantage if you bid the highest amount you are willing to pay for an item from the first instance, especially if you don’t have time or internet access to monitor the auction.

Policy overview

When a buyer wins an item or uses Buy It Now to purchase an item, they're obligated to complete the purchase by sending full payment to the seller.

If a buyer doesn't pay within 4 days, sellers can open an unpaid item case in the members area. If the buyer still doesn't pay or reach some other agreement with the seller, eduuka management may record the unpaid item on the buyer's account.

When an unpaid item case closes without payment from the buyer, sellers are eligible to receive a final value fee credit to their seller account. Also, if they relist the item and it sells the second time, Eduuka management may refund the insertion fee for the relisting.

Excessive unpaid items on a buyer's account may result in range of action, including limits on buying and selling privileges or suspension of the account.

Examples of policy violations

• John looks for a computer on www.eduuka.com and places a bid. After winning the item, he realizes that shipping the item will cost more than he's willing to spend. He decides not to send payment and simply ignore the invoices that he receives.

• James is new to www.eduuka.com and is just browsing. Excited by all the great deals she's finding, she starts placing bids and using Buy Out on every item that catches her eye. She doesn’t realize that she’s just purchased many of those items and is obligated to pay for them. If she chooses not to pay for the items, she's violating Eduuka’s unpaid item policy.

• Colin is looking for a new phone. He finds many models that he'd be very happy with and places a bid on 3 phones in hopes that he’ll be the high bidder on one of the listings and win a phone. Colin ends up winning 2 phones and pays for the one that he really likes. By not paying for the second phone, Colin is violating the unpaid item policy.