Three Reasons to Bid Online – Auctions Are Waiting

If you are an avid auction participant, the idea of taking your interest to the Internet may seem strange. After all, why bid online? Auctions are supposed to be attended, right? Well, yes and no. There is more here than meets the eye.

Convenience versus Attendance

No matter what you collect, from antique silver to sports memorabilia, sooner or later there will be an auction which you desperately want to attend, but can’t. It might be distance that prevents you from getting to the auction, timing, or even a previous engagement, but with online auctions, it just doesn’t matter.

Once you have registered and received permission to bid on a particular auction, you don’t have to be there. You can sit down at your computer, stream the auction live, participate, bid, and triumph without setting foot outside your home. This is particularly wonderful if the auction is taking place several states away. You don’t have to spend a ton of money for travel only to end the day empty handed.

Absentee Bidding Online

Of course, if the real problem is that the auction is taking place when you have another engagement, live bidding won’t work. For this there is absentee bidding. The concept isn’t new – people have used agents at auctions forever – but you never really know if your agent will represent you accurately.

With new software, you can look through an online catalogue, evaluate what you wish to bid upon, and place a maximum bid well in advance of the actual auction. You can do all of this when you have the time and can make a good, rational decision.

Later, when the auction takes place, you have the assurance that your bid will be raised to your maximum limit, automatically. You can check in when you are free to see if you won your item; if successful, shipping arrangements are made and your prize will arrive in due time.

A Broader Selection

If you are like most collectors, you are very much limited by geography at this point. You can plan to attend auctions that are out of state or far away, but it involves a lot of effort. Finding out about smaller auctions may not even be possible. With online auctions you can find out about any advertised auction, browse the catalogue, and make your decisions in leisure.

By accessing more auctions, as you do online, you have a better chance of seeing something special. Your auction house isn’t limited to just the merchandise it has in stock; it can connect and coordinate with many other vendors, providing you with a better selection.

Secure and Safe Transactions

We all hear about security issues that crop up with online purchases – you don’t have to worry when you participate in online auctions. Your information is processed with 128 bit encryption to protect your data from any prying eyes.

Once you take a look at just how many auction houses are turning to online bidding, the advantages will become even clearer. With the convenience, selection, and flexibility offered, it won’t be long before you want to try bidding yourself. Online auction bidding is the best way to expand your collection.

Which Is the Best Online Auction Website Concept?

Let me start with the figures of the behavior of on-liners.

Buy a product 71%
Participate in an online auction 26%
Sell something online 15%

Now when so many people are participating in online buying and selling, this article becomes important where I explain the types of online auction concepts and online auction websites.

Below are how different types of online auction websites or online auction concepts work or online buying and selling work.

(i) Straight auction There are Online auction websites eBay, ebid with a process, that sellers upload their auction for sale at a fixed price, buyers come and buy the item at that price. For the same auction, sometimes the buyers may also bid for a higher price and the highest bidder wins when the auction ends.

In such auction websites the sellers has to pay fees as below

(i) Item posting fees (free for limited items)

(ii) Final value fees (4% for any website)

(iii) Payment gateway fees (3.9% for paypal)

So an Item sold for $10, seller gets near to $3.5 because most of that money goes to charges.

So how does the seller earn more net profit from the same sales selling online in such destinations.

Now think of a buyer – a buyer bids higher to win an item or simply buys the item at the price stated on the website.

How many times do you go to a store and negotiate saying you want to pay a higher price for the product.? OR alternately how many times do you buy the product without expecting a discount on a product?

(ii) Lowest unique bid, Highest unique bid.

Here buyer buys bids, uses them to bid on the products. An auction is started and the buyer has to place his price of the product. i.e bid a value for the product. Each time the member bids it costs the member. The member may place multiple prices for the products.

Depending on the logic used i.e. unique lowest bid or unique highest bid, the respective member will win. Meaning if you have bid a value ‘X’ which no other member has bid and if its the lowest any one has bid the product is yours at that ‘X’ value

In such types of auction the chances of wining the product are very low. Also you are dependent on chance for wining the product.

so to buy a product from such auction websites you really need not to be a serious buyer and have lot of money to spare in bid cost because you do not control your buying decision.

And here the most important is that sellers do not upload auctions, the sellers are the website only. So the profit from the bid cost is all going to the website owners. so more the people are biding more is the profit to the sellers.

There are quite a few websites you will find if you search lowest unique bid auctions or highest unique bid auctions.

(iii) Penny Auctions. This is an auction websites like swoopo, etc are where the auction starts with the price of the product as zero and increases with every bid. To participate in this auctions you have to buy the bids and use them. Each bid will increase the price of the product. Then the count down starts, before the timer comes to zero if there is no other buyer biding the product is yours for that price. however that does not happen. There is always some one who outbids you. To participate in such auctions you have to have lot of money and time to spare. Here again the sellers are not in control their buying decision but depend on chance or luck. Here too if you see with each of his bid the price increases. So the question still remains would the buyer love to bid for increasing the price of the product.

Here the seller is the website. All products are listed for sale by the website itself. All proceeds from your bid cost goes to the website as profit. However there is much debate on such penny auction websites that they indulge into fraud by out biding the members just keep them biding. More the members bid more the website earns money. Such penny auction websites are not interested in selling products but they want you to keep biding.

You will get a list of penny auction website if you search the term penny auction website.

(iv) Reverse Auction

This is my favorite. You have seen auctions that ask the buyer to bid for increasing the price of the product, you have seen auctions that have hurt net profit of the seller. Reverse auction works to benefit both buyer and seller. In reverse auction the price of the product falls all the time until someone buys it. The auction starts with the retail price of the product and the price of the product falls. The current price is hidden from the buyer. The buyer pays a small amount to view how much the price of the product has fallen to. The buyer then has a certain time to decide if he wants to buy the product at that reduced price. He may keep checking back at the product’s price. Here the buyer is always ion control of his buying decision and does not depend on any chance or luck. if he is a serious buyer he can always buy the product at any price lower than the retail price.

Here the seller lists the price of the product. The sellers also benefits from this in a way that his price of the product increases each time the buyer view the current price.

While the buyer’s price reduces the seller’s price increases.

This increased price which the seller receives helps to increase the net profit for the seller.

This unique concept is found on http://www.bestebazaar.com/contents.php?show=howitworks currently and not seen on any other website. But I am sure there will be more to follow this concept as it benefits the many online sellers and buyers.

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.