Auction-mania

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The strategic advantages of this business model include:

No time constraints. Bids can be placed at any time (24/7). Items are listed for a number of days (usually between 1 and 10, at the discretion of the seller), giving purchasers time to search, decide, and bid. This convenience increases the number of bidders.

No geographical constraints. Sellers and bidders can participate from anywhere that has internet access. This makes them more accessible and reduces the cost of "attending" an auction. This increases the number of listed items (ie.: number of sellers) and the number of bids for each item (ie.: number of bidders). The items do not need to be shipped to a central location, reducing costs, and reducing the seller's minimum acceptable price.

Intensity of social interactions. The social interactions involved in the bidding process are very similar to gambling. The bidders wait in anticipation hoping they will "win" (eBay calls the successful bidder the "winner"). Much like gambling addiction, some bidders may bid primarily to "play the game" rather than to obtain products or services. This creates a highly loyal customer segment for eBay.

Large number of bidders. Because of the potential for a relatively low price, the broad scope of products and services available, the ease of access, and the social benefits of the auction process, there are a large numbers of bidders.

Large number of sellers. Because of the large number of bidders, the potential for a relatively high price, reduced selling costs, and ease of access, there are a large number of sellers.

Network economies. The large number of bidders will encourage more sellers, which, in turn, will encourage more bidders, which will encourage more sellers, etc., in a virtuous circle. The more the circle operates, the larger the system becomes, and the more valuable the business model becomes for all participants.

Captures consumers' surplus. Auctions are a form of first degree price discrimination. As such, they attempt to convert part of the consumers' surplus (defined as the area above the market price line but below the firm's demand curve) into producers' surplus. On-line auctions are efficient enough forms of price discrimination that they are able to do this

The online auction business model is one in which participants bid for products and services over the Internet. The functionality of buying and selling in an auction format is made possible through auction software which regulates the various processes involved.
eBay, the world's largest online auction site, is one of the better known examples. Like most auction companies, eBay does not actually sell goods that it owns itself. It merely facilitates the process of listing and displaying goods, bidding on items, and paying for them. It acts as a marketplace for individuals and businesses who use the site to auction off goods and services.

Several types of online auctions are possible. In an English auction the initial price starts low and is bid up by successive bidders. In a Dutch auction, multiple identical items are offered in one auction, with all winning bidders paying the same price -- the highest price at which all items will be sold (treasury bills, for example, are auctioned this way). Almost all online auctions use the English auction method.

eBay Inc. (NASDAQ: EBAY) is an American Internet company that manages eBay.com, an online auction and shopping website where people and businesses buy and sell goods and services worldwide. In addition to its original U.S. website, eBay has established localized websites in several other countries. eBay Inc also owns PayPal, Skype, and other businesses.

Origins and Early History
The online auction web site was founded in San Jose, California on September 3, 1995 by computer programmer Pierre Omidyar as AuctionWeb, part of a larger personal site that included, among other things, Omidyar's own tongue-in-cheek tribute to the Ebola virus.

The very first item sold on eBay was a broken laser pointer for $14.83. Astonished, Omidyar contacted the winning bidder and asked if he understood that the laser pointer was broken. In his responding email, the buyer explained: "I'm a collector of broken laser pointers." The frequently repeated story that eBay was founded to help Omidyar's fiancée trade PEZ Candy dispensers was fabricated by a public relations manager in 1997 to interest the media. This was revealed in Adam Cohen's 2002 book and confirmed by eBay.

Chris Agarpao was hired as eBay's first employee and Jeff Skoll was hired as the first president of the company in 1996. In November 1996, eBay entered into its first third-party licensing deal, with a company called Electronic Travel Auction to use SmartMarket Technology to sell plane tickets and other travel products. The company officially changed the name of its service from AuctionWeb to eBay in September 1997. Originally, the site belonged to Echo Bay Technology Group, Omidyar's consulting firm. Omidyar had tried to register the domain name echobay.combut found it already taken by the Echo Bay Mines, a gold mining company, so he shortened it to his second choice, eBay.com.
eBay went public in 1998, and both Omidyar and Skoll became instant billionaires. The company purchased PayPal in October 2002.

Anyone hoping to make money selling goods on eBay should be aware of the eBay quality of service ranking system. Sellers are rated through feedback from customers who have bought goods from them previously. There are thousands of sellers competing on eBay and potential customers will naturally gravitate towards the sellers who have a positive feedback rating. Developing a good customer service policy and maintaining it in all your eBay dealings is vital to your success.

The first thing to do before you plan your customer service strategies for selling goods on eBay is to read the rules. The regulations and policies that govern eBay transactions are clearly set out on the eBay website. There are a lot of them but it is worth spending time to get acquainted with any rules that will apply to your eBay sales. Once you have a fair grasp of the rules, you can develop your own customer service policy.

Your customer service strategies for eBay sales should start with product description: eBay is not the place for advertising puff or hype of any description. A clear photo of the item for sale is a great aid. You must be completely honest and accurate when describing items for sale. If applicable, include the manufacturer's name and model identification number. The provision of a full description is doubly important when you are selling used goods. If an item has a flaw, describe it fully. For instance: if you are selling an article that has sustained a minor scratch, don't describe the damage in words such as "minute" or "insignificant". State the exact position and dimensions of the mark. Your customers will not receive goods below their expectation and, if the merchandise exceeds what was expected, the customers will be satisfied and give you postive feedback. If you try to play down the extent of any defects when describing items for sale, people will not trust you enough to make a purchase; if the goods are sold, you are more likely to receive complaints, requests for refunds and negative feedback.

You must keep up your eBay customer service strategies during the time people are bidding in the auction. Prospective buyers often want more information than you have provided in your description of articles on sale. If a potential customer contacts you to ask for further details of goods you are selling, make sure you reply without delay and give clear answers to any questions. An enquiry that seems immaterial to you might be the one factor that persuades a purchaser to buy from you rather than a competitor offering an almost identical article.

Maintain your good customer service levels through to delivery of the items you have sold. This means despatching the items as soon as possible (this should be the same day unless it is a weekend or public holiday). To ensure a high level of customer satisfaction, make sure you never ask for an inflated sum to cover postage and packaging. Your customers will know how much the postage and packaging materials cost you and they won't mind being asked a fair price to cover those expenses. It is not unusual for the cost of postage to exceed the price of the goods and people don't mind this because they still feel they are getting a bargain. One thing nobody likes is the feeling that someone is trying to rip him/her off and that is the impression you will convey if you ask an excessive amount for postage.

Customer service policy on eBay should be no different from good customer service in any online transaction. The key is to maintain honesty, provide fast service and make it clear you have nothing to hide.

"This is a well designed auction webring. Free to join as long as you post the webring coding on your site. This ring is simple to navigate and loads fast. It also has a forum."

TWKSatellite.com
twksatellite.com


"This is a good way to advertise an auction site for free. All you need to do is post the code on your site. Easy to navigate and fast to load. Good work."

HobbyAuctioneer.com
hobbyauctioneer.com


"Very nice site. Loads up fast and very easy to get around. I still have it open to read a lot more."

Teresa
blujay.com/Tsurfer


"I bookmarked it..."

mike
webprogramming.tv


"Awesome site. Quick to load. I will definatly be back."

Pam
hits.affiliatetraction.com/cgi-bin/redir?pd_link=i1-a25920-o1866-c16702


"A nenjoyable webring with alot of different auctions and other sites. Good navigation and very fast loading. Good work."

Playstation-Mania
q.webring.com/hub?ring=seraphimproudled


"A very good webring for everyone who operates an auction or shop. Very easy to navigate and loads really fast. Nicely done."

TheCyberMall.biz
thecybermall.biz

Role of the Auction Site. Most Internet auction sites specialize in person-to-person activity where individual sellers or small businesses sell their items directly to consumers. In these auctions, the seller — not the site — has the merchandise, and often, the site will not take responsibility for any problems that may arise between buyers and sellers. Before using an Internet auction site for the first time, buyers and sellers should read the Terms of Use, and review any information the site offers.

Registration. Most Internet auction sites require buyers and sellers to register and obtain a “user account name” (or “screen name”) and password before they can make bids or place items for bid. Keep your password to yourself. If you share it, another person could access your account and buy or sell items without your knowledge. That could damage your online reputation — and eventually, your bank account.

Fees. Some sites require sellers to agree to pay a fee every time they conduct an auction, whether the item is sold or not. Other sites charge a fee only when an item is sold.

The Auction. Many sellers set a time limit on bidding and, in some cases, a “reserve price” — the lowest price they will accept for an item. When the bidding closes at the scheduled time, the item is sold to the highest bidder. If no one bids at or above the reserve price, the auction closes without the item being sold.

Some auction sites allow sellers to set a price at which a buyer can purchase the item without competing with other bidders. A buyer can choose to purchase the item for the price the seller has set, without bidding.

After the Auction: Arranging to Pay and Deliver Merchandise. At the end of a successful auction, the buyer and seller communicate — usually by email — to arrange for payment and delivery.

Read More At: http://www.ftc.gov/bcp/conline/pubs/online/auctions.htm

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