Online auctioning is the process whereby users log onto a website and bid for items or services posted on this website by other users. The way online auctioning works is similar to normal auctioning outside the cyber world, but has allowed the auction to reach a much greater audience.
Like the traditional auctions, there is an auctioneer (the hosting website) that receives a cut of the sale, there is a minimum bid that bidders must reach to buy the product, there are people who fraudulently cheat the system, and each day sales are made all over the world.
The process of both online auctioning and traditional auctioning, however, is fundamentally different. For both the first step of the process is usually for the seller to identify a product or service they want to sell, and then to find a company to host the auction and act as the auctioneer.
This is where the process splits. The person opting to use a company based on the web as the selling tool must log on, post a picture and description of the item, and then conduct all transactions online or by phone. Although most sites do provide a general tutorial helping new users set up an auction, most likely these users will not receive any direct help from the auctioneer.
The person choosing to employ a 'bricks-and-mortar' company as a supplier usually negotiates with the supplier and final bidder in person. The company acting as the "supplier" provides hands on assistance until the finalisation of the deal (Pantavanij: Slide 5, Slide 7, Slide 11 http://www.veloshopping.com/ecamp/document/auction.ppt ).
The type of online auctioning described above is the most common form of online auctioning and is known as “Forward Auctioning�. However there is another common online auctioning process that is very different to “Forward Auctioning�. This process is called “Reverse Auctioning�. “Reverse Auctioning� refers to when a buyer submits a request for a product or service and sellers submit bids. The buyer then choses the cheapest or best quality product out of the bids made from the sellers.
The advantage of “Forward Auctioning� for the buyers is that they can make multiple bids, have access to a large range of rare items, and can see all the bids made to assess the price. The advantage for the sellers is they have a channel to sell out-dated or excess material, real market price is achieved and they achieve increased profit margins. The advantages of “Reverse Auctioning� for the buyer is that they buy items that are significantly reduced in cost, are exposed to new sellers and don’t have to search around for the item they want. The advantages for the seller is that they have another channel to access buyers with. (Pantavanij: Slide 3, Slide 8, Slide 9 http://www.veloshopping.com/ecamp/document/auction.ppt ).
The Internet has shaped auctioning into possibly the “most effective negotiation tool today� (Pantavanij: Slide 2, http://www.veloshopping.com/ecamp/document/auction.ppt ). It is convenient, fast and efficient. In traditional auctioning usually a day and physical location is set for the auction. This may make it inconvenient for potential bidders. However with online auctions, it doesn’t matter what time of the day it is, users can instantly bid from anywhere in the world that is connected to the Internet. Users can browse through pages of auctions and research the history of the auction, including all the bids that have been made to date.
The ease, scope, convenience and cost of setting up such auctions has become very popular over recent years. In response to this popularity companies like eBay, uBid, Yahoo! and OnSale are beginning to fill cyberspace and offer their services. These companies mentioned, and thousands like them, are at the forefront of the shift from tangible- to cyber-shopping.
See also:
Pantavanij “Online Auction Services�, retrieved October 17, 2004, from http://www.veloshopping.com/ecamp/document/auction.ppt
Daniel Newton 10:21, 29 Oct 2004 (EST) mail me
