The Positives and Negatives of Online Auctions

Internet auctions have become increasingly popular over the years for a number of reasons, from their broad geographical reach to their absence of time limits. If you are contemplating moving into this area of selling there are a wide variety of attractive benefits to consider, but also some negative aspects to take account of. Here is an outline of some of both the pros and cons:

Cost-effective

Auctions can be one of the most cost-effective ways of selling goods online. There’s a plethora of cost saving measures sellers and auctioneers can take. It is considerably cheaper to organise an online auction than an offline auction event – with an offline auction money needs to be spent on a venue, a professional auctioneer, item storage and various other necessities. There are comparatively few expenses to worry about online… Auctions can also be an excellent way of liquidating old or excess stock. Selling these items by auction tends to bring in significantly higher profit margins than selling them off at a fixed discounted rate. Marketing is another area in which Internet auctions can save on costs. Marketing materials in the offline world can be costly and time-consuming to produce and distribute. Online marketing is relatively cheap, and has numerous other advantages.

High profits

Online auctions are open 24 hours a day, 7 days a week. They can go on for weeks (or even months). This is in contrast to physical auctions, which typically last for no longer than a few hours. This lack of time constraints is a great asset. It means that bidding can carry on for longer and thus lots are likely to sell at a higher price. Bidders find the competitive environment of auctions exciting and exhilarating. This is true of Internet auctions just as it is of auctions in general. This atmosphere can encourage participants to bid for items at significantly higher prices than they would in other situations. It is not surprising that online auctions have often been compared to gambling. As in gambling, participants can become caught up in the excitement of the event and become increasingly reckless with their money. This can lead to prices being driven well above and beyond market value.

Wide reach

Whereas in the offline world auction attendance is limited to those who can manage to physically be present at the event, auctions on the Internet can potentially be accessed by a vast and diverse audience of people from every corner of the globe. Items can be sold to people sellers would never have had access to previously. The larger the number of participants in an auction, the higher the prices that items are likely to sell for. There can also be a larger number of products up for auction. The increased reach of online auctions can allow sellers and auctioneers to create new specialist markets within their sector. Online auctions provide an astonishing degree of access to unusual or niche items that rarely turn up for sale in normal circumstances. For example, in the offline world machinery tools may become available for sale only occasionally and go for a high price when the do come up for sale. There is a wide geographic market for these items online. If marketing is targeted effectively, you can make lucrative sales.

Efficient marketing

Trading online offers the opportunity to market products in an exceptionally efficient and effective way. Data from your website can be used to identify customers’ and visitors’ buying and viewing habits. This means you can make highly informed decisions based on your customers’ interests and tendencies, and target your marketing activities more accurately. Social networking and blogging are very useful tools for anyone with an online business. Social networking can provide a steady stream of contacts and sales leads, as well as allowing you to publicise your auction site in a general way. If you frequently take part in online discussions relevant to the goods you sell you can offer your advice and expertise in the area and encourage people to put their confidence in you as an auctioneer or business partner. Writing a blog can also provide excellent publicity and customer interaction, as well as another route to your site for search engines.

Downsides

However, Internet auctions can also have their downsides…

• All websites are vulnerable to technical glitches. Technical glitches could cost you significant amounts of money, and customers who encounter a glitch when using your site may be permanently put off from buying from you.

• Criminal activities are something else to which e-commerce websites can be susceptible. If customers pay for items through your own site it is important that you scan the server for any potential security risks and comply with PCI DSS requirements.

• It shouldn’t be forgotten that there is still a significant number of people (particularly older people) who are not adept at, or not enthusiastic about, using the Internet to buy goods. Basing all commercial activity online may cause companies to lose these customers.

• Online auctions tend to lack the bustling, highly-charged, highly competitive atmosphere of auctions in the real world. This could lead to less competitive bidding and thus lower prices. Online auctions tend to see a dramatic surge in bidding activity towards the end of the auction, rather than sustained competitive bidding throughout the auction.

• Some bidders engage in a practice known as “sniping” – not placing any bids until the very last moment of an auction (when it is impossible for other participants to place competing bids) so as to avoid a bidding war that will drive the price higher. Naturally, this is not very beneficial for sellers and can result in lots selling for well below market value when in a physical auction they would have sold for a higher price.

Overall, the benefits of online auctions tend to outweigh the risks and downsides. However, it is important to research and consider all aspects of online auctioning before making the decision to move into this area of commerce.

How to Find Live Bid Online Auctions That Specialize in Your Area of Interest

If you’ve never heard of a live bid online auction, then you need to take a moment to read this introductory paragraph. Otherwise, feel free to skip ahead to the good stuff where we’ll tell you all about how to make such auctions work for you and for your personal interests. Now, if you’re still with us, we’ll assume you’ve never heard of a live online auction. Fair enough.

Similar to a traditional auction, live auctions held online are designed to sell off various objects that someone else no longer wants but hope you do want. They also work in exactly the same way that a traditional auction works by using an auctioneer who calls the bids as they come in and are held in “real time,” meaning that you get to bid in such auctions as they are happening, not like eBay auctions where you bid any time. Okay, now that we have that introduction out of the way, here’s the good stuff.

Making Online Auctions Work for You

We’ll assume here that you know all about going to a live bid online auction and that you simply want to know how to make them work for your needs. If you have no idea what we’re talking about, see the paragraph above. Live online auctions aren’t just a more convenient way to do your auction purchasing. Yes, you can get great deals at such auctions the same as you can at traditional auctions and you don’t have the fuss of getting in the car and driving to an auction house.

However, the best thing about an online auction is that you can easily purchase from auction houses that are thousands of miles away since everything is done online. This is a boon for collectors who have specific items they look for. The trouble is, with all the online auctions out there, how do you find the ones that specialize in the antique fish lures that you love collecting? Simple – just use Google Alerts and RSS.

What is Google Alerts and What is RSS?

These are two separate technologies that actually work together to make things easier than ever for those who enjoy bidding at a live bid online auction. RSS stands for Really Simple Syndication and is a fairly old technology (in Internet terms that is – it was created for Netscape Navigator and the My Netscape web portal back in 1999 – an eternity in Internet years) that allows you to grab content from different web sites and to see it all in your e-mail or in an RSS reader. The system is most often used for collecting articles from news websites and blogs.

Google Alerts is another system that will tell you when a new webpage is added to the Google index which contains specific keywords. Therefore, you could, for example, have it do an alert every time a page is added which mentions “antique fish lures.” However, that will simply bring you a ton of pages and doesn’t really differentiate between what is out there and what you’re looking for.

Using Google Alerts

What if you only want to find any live bid online auction that happens to feature antique fish lures? You have two choices: Either you can put both of those into your search by putting them in quotation marks (i.e. “live bid online auction ” ” antique fish lures”) or, if you know of specific online auction sites that sometimes have them, you can tell Google Alerts to let you know only when those sites add in something of interest using the “site:” command (i.e. site:myfavoriteauction.com “antique fish lures”). Try that with a traditional auction and you’ll just get blank stares! Oh, and the best part? Google Alerts will even send you an RSS feed when it finds the auctions you’re interested in.

Online Auction Sites – Basic Tips For Sellers

Over the last several years, rising numbers of people have bought and sold goods at online auction sites such as eBay. Naturally, many folks who joined internet auctions soon realized the income potential available to those who could sell successfully. These have included stay-at-home parents looking for some extra income and entrepreneurs at heart who wanted to start their own full time business. Online auction sites are attractive to new entrepreneurs because they’re a target rich environment: people cruising internet auction sites tend to be people wanting to buy something as opposed to people just looking for information.

In order to start a business selling through internet auctions, you first have to decide what market to target and figure out how to obtain a solid product you can sell for profit at a reasonable retail price. Next, you have to figure out how to sell it. Here, I address the last issue, which is the easiest: how to sell online using auction sites. If you follow these two basic tips then you should succeed in launching your business, provided that you have a suitable product to offer that you know has some consumer demand. The two are:

1. Provide accurate and attractive product descriptions
2. Understand the policies of your auction site and payment provider, e.g., PayPal

Everyone knows by now that a photo is a must-have. The text descriptions are equally important, but sellers sometimes skimp on this part. There is no point in endlessly fretting about “What should I sell online?” only to later cut corners when you prepare the auction listings. A detailed description is particularly important if the product is sold with multiple accessories, such as a camera with different lenses. Also, if you are aware that the product is used with another item that is not part of your online auction, it is best to state explicitly that the other item is not included in the auction.

These can be illustrated with iPod auction listings. You probably know already that iPods are supplied with variable amounts of memory. Your description of the memory capacity for the specific item you are selling must be accurate, because if an item advertised a 32 Gb iPod turns out to actually be an 8 Gb model you can bet the buyer will lay a claim against you to get his money refunded. This is also why it can be hazardous to copy auction listings from another seller for a product if you don’t really know anything about it: yours might not be configured the same way his was. Negative feedback can be very damaging when you are in the startup phase for an online business. Suppose you are selling a used iPod without any headphones. Your picture just shows an iPod and no headphones are visible, since you aren’t auctioning a headset or earbuds with it. An iPod needs a headset of some sort, though, and any new iPod purchased in a store would include earbuds. Assuming that the buyer understands a headset is not part of the auction based strictly on your photo is risky. I advise an explicit, written statement that headphones are not included. An ounce of prevention is worth a pound of cure to make money online.

Policies of online auction sites and their payment providers can change over time and you need to be aware of what their pricing or other policies are before jumping into selling in online auctions. As an example, occasional Paypal holds on payments have recently caused confusion for some new eBay sellers. Sellers have at times reported holds of up to 21 days on payments from PayPal. Of course, a seller is still required to ship items to buyers after Paypal has received cleared payment. This means a seller may be compelled to ship items before receiving payment, even funds to cover the shipping charges. Some folks have listed items for sale without recognizing this possibility and have then gotten frustrated when confronted with an unexpected delay getting paid. Online auctions generally do not require sellers to accept PayPal, but it really is the easiest service to use when starting a business with online auction sites. If you want to avoid PayPal, internet merchant accounts can always be used instead. Other options may also be available depending on the terms of your auction site-just beware of checks from buyers claiming to be from Nigeria!

Another area of frustration for sellers is not unique to online auction sites: returns! Some folks don’t want to cope with returns, so they’ll list an item with a return policy of “no returns accepted”. Others offer a return policy such as “returns accepted within 7 days, buyer is responsible for return shipping plus a restocking fee.” Requiring the buyer to pay return shipping and/or charging a restocking fee is standard. No matter what you write as a return policy, however, you can be forced to accept returns if the buyer alleges you provided an item that was Significantly Not As Described (SNAD). PayPal allows SNAD complaints to be leveled up to 45 days after the sale, so even if your listing said that returns would not be accepted after 7 days you are still bound by the PayPal SNAD policy if you accept payment through PayPal.

The terms of service for online auction sites and payment providers are not unduly complicated, but make sure you read the fine print before you try to start selling. Participating in auctions first as a buyer is usually a good idea. This also helps you to establish a good reputation within the online auction sites. If you have obtained a quality product to sell that consumers want to buy, you are able to create attractive and clear auction listings, and you understand how your auction site works, then you have all the makings of a successful internet auction based business. Good luck and have fun when you buy and sell online!