What Is a Proxy Bid Auction?

If you're a professional auctioneer, liquidator, or asset broker exploring online sales, you've probably heard the term "proxy bid auction." It's a powerful tool baked into many online auction platforms - and when used well, it can drive stronger results for both bidders and sellers.

In this post, we'll break down what a proxy bid auction really is, how it works behind the scenes, why it matters, and how you can use it to run more efficient and profitable auctions.

What Is a Proxy Bid Auction?

A proxy bid auction allows bidders to enter the highest price they're willing to pay for an item (called a maximum bid) and then lets the auction platform automatically bid on their behalf, up to that amount.

Think of it like a digital assistant that keeps bidding for you, just enough to stay in the lead, without revealing your full hand. This means you don’t need to babysit the auction or bid repeatedly. The system does it for you.

For example:

• You enter a max bid of $1,000

• The current bid is $500, with a $25 increment

• Your proxy bid raises the price to $525

• If someone else bids $600, the system automatically counters at $625

• This continues until someone else tops your $1,000 - or the item closes with you as the winner

It’s simple, fast, and incredibly helpful in fast-paced online auctions.

Where Proxy Bidding Came From

Proxy bidding isn’t new. It evolved from absentee bidding in live auctions, where buyers who couldn’t attend would leave their max bids with the auctioneer.

As online auctions took off in the late 1990s - especially on platforms like Proxibid, which even takes its name from the term - proxy bid auctions became a standard feature.

Today, they’re built into nearly every professional auction software used across North America and beyond.

Why Proxy Bid Auctions Matter for Professionals

If you run auctions, proxy bidding isn’t just a feature—it’s a business tool. Here’s why professionals rely on it:

For Sellers:

• More Participation: Bidders can compete without being online when the auction ends.

• Stronger Prices: Bidders are more likely to submit their top dollar when they trust the system.

• Fewer Unsold Lots: With less timing pressure, more bidders stay active longer.

For Bidders:

• Convenience: No need to sit and wait—just set your limit and walk away.

• Confidence: You’ll never accidentally overpay; the system only bids what’s needed to stay ahead.

• Control: Bidders stick to their budget and avoid last-second pressure.

  

Where Proxy Bid Auctions Show Up

Most online auction platforms today offer proxy bidding, but there are small differences worth noting:

Platforms That Support It:

• Proxibid – Industry standard, built around proxy bids

• HiBid – Common in the estate and industrial auction space

• AuctionMethod – Customizable software platform for professional auctioneers

• BidWrangler – Used by many auction houses for branded solutions

Key Proxy Bid Features to Look For in an Auction Software Solution:

• Increment logic (e.g., fixed vs. tiered bid steps or increment scales)

• Tie-breaker rules (usually, earliest max bid wins in a tie)

• Soft-close settings to prevent sniping

• Bidder transparency (e.g., hiding max bids from other users and even the auctioneer)

Each system may label proxy bidding differently - sometimes called “max bids” or “pre-bids” - but the core function is the same.

Common Concerns About Proxy Bid Auctions

Despite the benefits, some bidders (and even some auctioneers) worry about how proxy bidding works.

Here’s what we hear - and how to address it:

"If I set a max bid, I’ll just end up paying that full amount."
Not true. Studies show that in over 75% of cases, proxy bidders win items for less than their maximum.

"I don’t trust the system. What if someone uses fake bids to push my proxy up?"
Reputable platforms have tools to detect and prevent this. Make sure your terms clearly state how proxy bids are handled, and reassure your bidders that their max bids are confidential and secure. Do not violate the integrity of the auction process with shill bidding, no matter how tempting it may be.

"I got outbid by less than the bid increment. Why didn’t my proxy win?"
If your auction doesn’t enforce strict increment rules on proxies, then it is possible for a proxy to be edged out by an amount smaller than the bid increment amount. AuctionMethod's software has an option called 'forced increments' that requires proxies to be entered in multiples of the increments. If that option is disabled and there's a battle between two proxies, then the highest bid will win - even if it's only by a penny.

Best Practices for Using Proxy Bid Auctions

To get the most out of proxy bidding, follow these tips:

1. Explain It Clearly – Include an FAQ or visual guide in your listings.

2. Encourage Serious Bidders – Remind buyers to enter their real top bid, not just a placeholder.

3. Use Notifications – Let bidders know when they’ve been outbid, so they can respond. (Hint: AuctionMethod's software allows users to set their preferences for when and how they get these notifications.)

4. Enable Soft-Close Extensions – This levels the playing field and avoids sniping.

5. Emphasize Confidentiality – If your system hides max bids, highlight that in your marketing.

When bidders feel safe using proxy bidding, they use it more - and that means more competitive auctions.

When Is Proxy Bidding Most Effective?

Proxy bid auctions work best in:

• Timed auctions where bidders can’t be present at closing

• Live webcast auctions with pre-bid options

• Multi-lot sales where bidders want to manage many items at once

• Busy season sales when your audience can’t attend in real-time

And remember, you don’t have to force everyone to use proxies. Offer the option, make it user-friendly, and let bidders choose how to engage.

Proxy Bid Auction Strategy + Free eBook Download

If you want to run smarter online auctions, understanding the proxy bid auction model is key.

To help you go even deeper, we’ve put together a free eBook: "The Auction Professional’s Guide to Proxy Bidding." It’s packed with examples, strategies, and real-world insights from experienced auctioneers.

👉 Download the free Proxy Bidding eBook here.

Make proxy bidding work for you - and give your bidders the confidence to go big.