A vendor bid is a bid placed by the auctioneer on behalf of the seller (the “vendor”) during an auction, usually to help move the price toward the seller’s minimum acceptable figure (reserve price).

Plain meaning

  • A vendor bid is not a genuine offer from an outside buyer; it is effectively the seller “bidding” on their own item through the auctioneer.
  • It is often used when bidding is slow or hasn’t started, to “kickstart” the auction or lift the price closer to where the seller is willing to sell.

How it works at auctions

  • The auctioneer will usually announce that the next amount is a vendor bid or a bid on behalf of the seller , so buyers know it is not from another bidder.
  • Vendor bids are typically set below the reserve price; after a vendor bid, real buyers must bid above that figure if they want a chance to purchase.

Why vendor bids are used

  • To keep the bidding moving when the room is quiet, so the auction does not stall at a very low number.
  • To guide buyers toward the property’s expected selling range and signal that the current level is still below what the seller will accept.

Legal and fairness aspects

  • In many places (for example, some Australian states), vendor bids are legal as long as they are clearly announced to everyone at the auction.
  • If vendor bids are not disclosed, they can blur into “dummy bids,” which are deceptive and often illegal, because they pretend to be genuine competing buyers.

Quick buyer tips

  • Treat a vendor bid as a signal , not real competition: it shows where the seller wants the price to head, but it doesn’t mean another buyer is willing to pay that amount.
  • If the auction only has vendor bids and very few real bids, there may be room to negotiate privately after the auction if it “passes in” (does not sell under the hammer).

TL;DR: A vendor bid is a strategic, declared bid the auctioneer makes for the seller to lift or start the price; it’s not a real buyer’s offer, but a tool to push the auction toward the reserve.

Information gathered from public forums or data available on the internet and portrayed here.