How to Run an Online Auction: Complete Operator's Guide
An operator's guide to running an online auction end-to-end — pre-sale catalogue prep, bid increments, simulcast, bidder verification, livestream, and settlement.
Operations··15 min read
15 min read
Running an online auction as an auction house operator means preparing a fully catalogued sale (photography, descriptions, condition reports), configuring the platform (lot order, bid increments, reserves, premium), verifying bidders with KYC and deposits, deciding live-vs-timed and simulcast-vs-pure-online, executing the sale (rostrum or auto-close), then settling within 30 days. The technical surface is wider than a saleroom, but the workflow rewards repetition: a tight catalogue, a clean bidder roster, and a tested platform handle 80% of the operational load.
Christie's reported 80% of bids in 2025 were placed online, and online jewellery sales jumped 68% in H1 2025 versus 2024. Online and hybrid auctions are no longer a side channel — they are the channel. This guide is operator-side, not bidder-side, written for an auction house running its own sales rather than for a charity gala or a one-off liquidator. It covers the full lifecycle from catalogue prep to consignor settlement, with the cross-platform decisions where most operators leak margin.
Pre-sale catalogue preparation
The catalogue is the product. Buyers don't see your saleroom; they see your lot pages. Cataloguing quality directly determines hammer multiples, bidder confidence, and post-sale dispute rate.
Lot intake and consignor agreement
Every lot enters the catalogue via a signed consignment agreement that fixes:
Reserve price (confidential, written, signed)
Low and high estimate (published)
Seller's commission rate
Marketing levy and insurance fee (if applied)
Settlement timeline (industry standard: 30 days post-sale)
Loading a lot into the platform without all six locked is the most common cause of post-sale disputes. Build catalogue intake as a sealed checklist process.
Photography standards
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One hero shot, white or graduated background, full lot in frame
Three to six detail shots showing maker's marks, signatures, condition issues, and scale references
A photograph of any provenance documentation
For watches: caseback, dial close-up, movement (if back is opened), bracelet/strap detail, with-and-without box
For jewellery: top-down with scale, side profile, hallmarks, and any GIA/HRD/IGI certificate scan
For fine art: full work, signature, verso, frame detail, condition issues including any restoration
Shoot at minimum 3000×3000px for zoomable web display. Buyers in 2026 expect to zoom into a hallmark from a phone screen. Underspending on photography is the single highest-ROI mistake new houses make — a good photographer charges $20–$60 per lot and the marginal hammer typically pays for it 5–10x.
Descriptions
Description structure should be consistent across the catalogue:
Maker / artist / brand
Title or piece name
Period and date
Materials and dimensions
Markings and signatures
Provenance chain
Literature and exhibition history (where applicable)
Condition statement (or reference to standalone condition report)
Estimate
Avoid superlatives. "Rare," "important," "exceptional" — buyers tune them out and they create attribution-warranty exposure. Stick to verifiable, specific facts.
Condition reports
A condition report is a separate document detailing every flaw, restoration, repair, and uncertainty about a lot. For watches, it covers running condition, water resistance status, polishing history, replaced parts, dial originality. For art, it covers craquelure, inpainting, lining, surface dirt, frame wear. For jewellery, it covers stone certification, setting integrity, hallmark verification, repairs.
Issue a condition report on every lot above your value threshold (typical: $1,000 hammer or higher). Make it available on request — not visible by default — and log every request. Buyers who don't request a condition report and then complain post-sale have a much weaker dispute case if you've made the report freely available.
See the glossary entry on condition reports for the full template structure.
Lot ordering psychology
Lot order is not arbitrary. Bidder behaviour follows predictable patterns and the catalogue running order is a tool for shaping the sale.
The cold-start problem
Bidders need to warm up. The first 5–10 lots in a live or live-simulcast sale typically underperform their estimates by 5–15% as the room (and online bidders) settle in. Never put a top-five lot in the first 10. Lead with strong but not headline material — pieces with clean estimates that are likely to sell at or just above estimate.
Headline placement
In a 200-lot sale, place headline lots between lots 30–70 and again between 120–160. The two-headline structure builds energy, creates a mid-sale peak, and sustains attention through the back half. Houses that cluster all their headlines in the first 30 lots see steep drop-off in the back half.
Cherry picking
Bidders skim catalogues and bid on lots that catch their eye. Place mid-tier lots adjacent to headline lots so the spillover attention drives bidding on lots that wouldn't otherwise get noticed.
Run rate
For pure-online timed auctions, lot order matters less because all lots are open simultaneously. But the closing order in staggered-close timed sales still follows the same logic: don't close all your headlines in the first hour; spread them across the closing window to keep bidders engaged.
Category clustering
Group like with like. Bidders who came for jewellery want to see the jewellery section run. Mixing watches into the middle of a jewellery run loses both audiences. The exception is deliberate cross-category headline placement to broaden bidder interest.
Bid increments — the configuration that decides hammer
The bid increment chart is the table that defines how much each next bid must rise. Set them too high and you lose bidders; set them too low and the sale takes forever and the auctioneer's chant breaks down.
A representative bid increment chart for a boutique house:
Current price (USD)
Standard increment
Up to 100
5 or 10
100–200
10
200–500
25
500–1,000
50
1,000–2,000
100
2,000–5,000
200 or 250
5,000–10,000
500
10,000–20,000
1,000
20,000–50,000
2,000 or 2,500
50,000–100,000
5,000
100,000–200,000
10,000
200,000–500,000
20,000 or 25,000
500,000–1,000,000
50,000
1,000,000+
100,000 (auctioneer's discretion)
In live auctions, the auctioneer can take "split" bids (half-increments) at their discretion to bridge between bidders. In timed online-only auctions, the platform enforces the increment strictly — there is no auctioneer to split — so configure carefully and publish the chart so bidders know what to expect.
Choose your format: live, timed, or hybrid
The format choice changes everything downstream. The three options:
Live auction (with or without online simulcast)
A traditional rostrum sale where lots are called in sequence by an auctioneer, with bids accepted from the room, telephone, absentee, and (if simulcast) online bidders in real time. Best for high-value lots, theatrical sales, and category authority. Production-heavy: rostrum, clerk, ringmen, telephone bid bank, simulcast operator. See the glossary entry on live auctions.
Timed online auction
Lots open for a fixed window (typically 7–14 days), with staggered closing — usually one lot every 30–60 seconds — and anti-sniping logic that extends the closing window if a bid is placed in the final 1–5 minutes. No auctioneer, no rostrum, no live theatre. Lowest cost, easiest to scale, default for most boutique online-led houses. See the glossary entry on timed auctions.
Hybrid (preview-in-person, sale-online)
The default for boutique houses with a small physical footprint: bidders preview lots in person across a 1–2 week window, then bid online in a timed sale. Combines the trust-building of in-person inspection with the operational simplicity of timed online.
Live with simulcast — the choice for high-value sales
Simulcast means streaming a live rostrum auction to online bidders who can place bids in real time. The simulcast operator manages latency between the rostrum and online consoles (typically 500ms–2s), translating online bids into the auctioneer's flow. Production cost: $3,000–$15,000 per sale day depending on production quality. Worth it when your sale has at least $250,000–$500,000 in expected hammer.
Format decision rubric
Sale total expected hammer < $100k → timed online
$100k–$500k expected hammer → timed online with optional rostrum highlights
$500k+ expected hammer → live with simulcast
Charity gala → live with simulcast (or pure live if intimate)
Real estate → format depends on jurisdiction; live with simulcast common
All consignment agreements signed, all reserves locked, all photography complete, all descriptions written, all condition reports filed. Catalogue freeze means no further additions or changes — late additions disrupt marketing and break catalogue numbering. Publish the catalogue on the public site at this point.
Step 02
Configure the platform
Set sale start and end times, lot opening times, staggered close intervals, anti-sniping window (typically 5 minutes), bid increments per lot or per band, reserves, buyer's premium tiers, and accepted payment methods. Run the platform's pre-flight checks and a full mock sale internally.
Step 03
Open registration and run KYC
Bidder registration opens 14–21 days before the sale. Every registrant goes through identity verification, sanctions screening, and PEP checks. Take a refundable deposit (typically 10% of intended spend, capped at $5,000–$50,000) for unknown bidders. Approve trade and known clients without deposit.
Step 04
Market the sale
Email the consignor list, the past-bidder list, the watchlist signups, and the wider opt-in marketing list. Run paid social on the headline lots. Pitch press to category trade publications 7–10 days out. Send reminder emails 48 hours before opening, 12 hours before opening, and 1 hour before closing.
Step 05
Open the sale
For timed online: lots go live and bidders can place bids any time during the window. Monitor bidder activity hourly; flag any unusual bidding patterns (bid wars, suspect accounts, possible shilling). For live with simulcast: rostrum opens at scheduled time, online and telephone bidder consoles staffed, simulcast operator monitoring latency.
Step 06
Manage absentee and phone bids
Absentee bids submitted before the sale are entered into the platform with a maximum amount. The platform bids on the bidder's behalf up to that maximum, in increments. Telephone bidders are called by a member of staff at the appropriate lot and bid live through the staff member. Cut-off for absentee bid submission is typically 12–24 hours before live sales, or end-of-window for timed sales.
Step 07
Run the rostrum (live sales only)
The auctioneer calls bids at a steady cadence (one bid every 3–6 seconds for fine art, faster for general estate, much faster for livestock or equipment). Clerk records each hammer price and paddle number. Ringmen spot bids on the floor and from the simulcast feed. Auctioneer announces 'Fair warning' before knocking down. Hammer falls; lot is sold.
Step 08
Close the sale and reconcile
Sale ends; final results published immediately. Reconcile hammer prices to platform records, paddle numbers, and clerk's notes. Flag any discrepancies for review before invoicing. Compute buyer invoices: hammer + premium + applicable tax. Compute consignor settlements: hammer − seller's commission − ancillary fees.
Step 09
Invoice buyers and collect
Send invoices same-day. Payment terms typically 7–14 days. Send reminder at day 5, day 10, and day 14. Apply late fees per published conditions of sale. For unpaid lots, follow the platform's default-bidder process — typically a written demand, then resale of the lot at the defaulter's risk and expense.
Step 10
Settle consignors within 30 days
Industry standard is 30–35 days post-sale. Pay only after buyer funds clear. Issue settlement statements showing every lot, hammer price, commission deducted, ancillary fees, net payout. Process unsold lots: notify consignor, offer post-sale offers from underbidders if any, arrange return shipping or re-entry into next sale.
Bidder verification, deposits, and fraud prevention
Online bidder fraud is the operational risk that has destroyed more first-time online auction houses than any other. The control set:
Identity verification
Run document-based ID verification (passport, driving licence, national ID) on every new bidder. Most modern platforms integrate with Onfido, Veriff, Persona, or Sumsub for this. Cost: $1–$5 per bidder. Skipping it for the convenience of "easy registration" is the single largest fraud exposure.
Sanctions and PEP screening
Screen every bidder against OFAC (US), OFSI (UK), EU consolidated list, UN list, and a politically exposed person register. Re-screen at registration and at the time of each high-value purchase. The compliance cost of missing a sanctioned bidder is far larger than the technology cost of screening.
Deposits
For unknown bidders or bidders intending to spend above a threshold (typically $5,000+), take a refundable deposit pre-authorised on a credit card or wire transferred. Standard structure: 10% of intended spend, capped at $5,000 or $25,000 depending on house policy. Deposits are released within 7–14 days of sale end if the bidder doesn't win, or applied to the invoice if they do.
Bid limits
Set hard bid limits per bidder until they have a payment history with you. New unverified bidders capped at $5,000–$25,000 per lot; trade buyers and verified clients uncapped. Enforce in the platform.
Default bidder process
Every house needs a published process for bidders who win and don't pay. Standard sequence:
Day 7: courteous reminder
Day 14: formal payment demand citing conditions of sale
Day 21: final notice; lot reverts to underbidder offer or relisting
Day 28+: legal action or third-party debt collection; bidder added to global default lists shared between houses
This is the area where being on a vetted platform helps most — established platforms maintain shared default-bidder lists across customers, which dramatically reduces repeat-fraud exposure.
Livestreaming the rostrum
For live-with-simulcast sales, the production setup matters. The minimum stack:
One main camera on the rostrum, 1080p or 4K, locked off
One secondary camera on the lot table or paddle floor (optional but recommended)
Wired audio capture from the auctioneer's lapel microphone
Backup wireless mic for the auctioneer
Vision mixer or single-camera streaming encoder
Two redundant internet connections (primary fibre, backup 5G failover)
Streaming output to the platform's bidder console (RTMP or platform-native)
Local backup recording at full quality
Latency target: under 2 seconds end-to-end. The simulcast operator works with the auctioneer to handle online bidders gracefully — calling out "online bidder" or holding a beat for online consoles to register the increment. Auctioneers who treat online bidders as equal participants get noticeably stronger online hammer than auctioneers who run the room without acknowledgement.
Handling absentee and phone bids
Absentee bids and telephone bids are the two non-rostrum live channels.
Absentee bids
Bidders submit a maximum bid before the sale. The platform (or in older operations, the clerk) bids on their behalf up to that maximum, in normal increments. Absentee bidders win at the lowest increment that beats the next-highest bidder, not at their maximum. Configuration matters: set the cut-off for new absentee bids 12–24 hours before live sales, or end-of-window for timed sales.
Telephone bids
A staff member calls the bidder at the appropriate lot and relays bids back and forth in real time. Telephone bidding is labour-intensive — one staff member can manage 1–3 bidders simultaneously — so reserve it for high-value lots and pre-register telephone bidders in advance. Most boutique houses operate a "phone bank" of 4–8 telephone-bid staff for live sales.
Conflict resolution
When absentee, telephone, online simulcast, and floor bids all stack at the same price, the auctioneer follows a published rule. Standard order: absentee bid takes priority over later equal bids, then telephone, then online, then floor — though houses vary. Whatever rule you adopt, publish it in conditions of sale.
Post-sale settlement
Settlement is where the trust gets earned or lost. The standard timeline:
Day 0 — Sale ends
Day 0–1 — Invoices issued to buyers
Day 7–14 — Buyer payment expected
Day 14–28 — Pickup or shipping arranged
Day 30–35 — Consignor settlement issued
Consignor settlement statements should itemise every lot:
Lot number, description, hammer price
Seller's commission deducted
Marketing levy, insurance fee, photography fee
Net payable
Method of payment (wire, ACH, BACS, cheque)
Pay by wire or bank transfer wherever possible. Cheques to consignors are an old-house anachronism that creates float exposure and dispute risk.
For unsold lots ("no sale" or "bought-in"), notify the consignor within 7 days, offer post-sale buy-it-now from the highest underbidder if appropriate, and arrange return shipping or re-entry into the next sale per the consignment agreement.
Auction Rabbit's platform handles every step in this guide under one stack: the web platform for the public auction site and rostrum, the mobile app for the mobile-first 80%-of-bids audience, AI features for hammer prediction, lot description generation, and bidder behaviour analytics, and Web3 capabilities for tokenised provenance and on-chain settlement. If you're tuning your online sale workflow and want a second opinion, talk to us.
Common questions
Timed online sales typically run 7–14 days. Shorter than 5 days and you don't capture the watchlist-and-marketing flywheel; longer than 14 days and bidder attention dissipates. Live-with-simulcast sales run 4–8 hours per session, sometimes split across multiple sale days for very large catalogues. Charity gala live auctions usually run 30–60 minutes inside a longer event.
Boutique fine-art houses target 70–85% sell-through. General estate sales often run 60–75%. Charity sales should clear 90%+. Below 60% sell-through suggests reserves are set too high relative to estimates, or marketing isn't reaching the right buyers. Above 95% sell-through suggests reserves are set too low (consignors are giving away upside). The sweet spot is the rate that balances consignor satisfaction with strong demand signal.
Phone bidding adds operational cost (one staff member per 1–3 bidders) but can drive incremental hammer on high-value lots where bidders want anonymity. For sales with no lots above ~$10,000 expected hammer, phone bidding is generally not worth the staff cost. For sales with multiple lots above $50,000, phone bidding is essential — many top buyers refuse to bid online and will only bid by phone.
Five minutes is the de facto industry standard. If a bid is placed in the final five minutes of a lot's closing window, the close extends by another five minutes (or whatever your configured value). The window keeps extending until five minutes pass without a new bid. Shorter windows (1–2 minutes) reward technically savvy snipers; longer windows (10+ minutes) drag out closes and frustrate bidders. Five is the right balance.
Shill bidding (consignors or staff bidding on their own lots to drive up prices) is illegal in most jurisdictions and is the fastest route to losing your license. Controls: ban consignors and immediate family from bidding on their own consigned lots in your conditions of sale and enforce in the platform; prohibit staff from bidding on house sales; monitor bidder IP and device fingerprints for collusion patterns; never make 'chandelier bids' below the reserve a routine — only a single auctioneer-discretion opening bid is acceptable, and only if disclosed in conditions of sale.
You generally cannot. The reserve is contractually fixed in the consignment agreement and can only be lowered with written consignor consent. Some houses build a 'reserve flexibility' clause that allows the auctioneer to lower a reserve by up to 10% during the sale at their discretion; otherwise the reserve stands. If a lot fails to meet reserve, it is bought in (no sale) and you handle it post-sale per your consignment agreement.
Yes — modern auction platforms support both formats, often within the same sale (some lots called live by the auctioneer, others closing in a parallel timed window). The configuration is the only thing that changes per lot. Mixed-format sales are uncommon for boutique houses but standard for some general estate and equipment auctioneers.
Boutique online-led houses typically charge 22–28% on hammer, identical to live-sale premiums at the same house. Charging less for online than live confuses buyers and undercuts your live-sale margin. The marketplace consignment fee model (LiveAuctioneers, Invaluable) layers an additional 3–5% on top of the consigning house's premium when you syndicate, but that's separate from your house's headline rate.
Follow your published default-bidder process: courteous reminder at day 7, formal demand at day 14, final notice at day 21, legal action or referral to underbidder at day 28+. Most platforms maintain shared default-bidder databases — once a bidder is logged as a defaulter, they're flagged across customers of the same platform. For high-value defaults, third-party debt collection or small-claims court is the standard escalation; conditions of sale should explicitly assign legal costs to the defaulting bidder.