Online Auction

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Potential Benefits of Online Auction

Potential Benefits of Online Auction


Electronic commerce has been continuously growing since the past few years despite failure of several online retailers. The organizations that succeed grow and achieve rapid success. The main reason for success is that online commerce provides a low-cost model for organizations to conduct their business. Online auctions have been more successful in several aspects with eBay leading the way. Apart from providing a cheap method of selling things, online auctions are able to capture a greater market.

Online auctions have an extensive search engine that helps to create a very liquid market for each product category. Along with this, many bidders do not consider auction as a business rather they treat it as fun and just take part to enjoy themselves. Most auction sites also have message boards where people can share messages with each other so that other may be well informed. This paper will research various online auction businesses and contrast their potential benefits with eBay (Ebay, 2012a).

Value Creation with the Help of B2B e-commerce

B2B commerce has the capacity to transform the business world and international trade. The lower transactions costs add to the benefits of such businesses since one of the major issues faced by any business are the costs (Ebay, 2012b). Therefore, businesses are considering shifting from a physical business to a virtual business. The success of websites such as eBay,, etc has reinvented business by offering new ways of doing business.

History of Online Auction

Online auction began with the launch of Onsale in 1995 and eBay the same year. Both were launched in 1995 but Onsale could not achieve the same level of success compared to eBay due to several reasons. However, there were major similarities between the two websites. The primary similarity was that they both used the same approach of ascending bid. These websites were instrumental in increasing the variety of services and goods that were available online and could easily be sold to people all over the world. Currently, there are hundreds of such websites each providing top quality services that are influencing people to use auction in order to get a higher price for their goods (Ebay, 2012b).

Types of Electronic Auction

Electronic auctions or online auction can be classified into six different categories:

English Auction

English auctions are the most common form of auctions in which the bidders or auctioneer place the bids and pay whatever they bid in order to receive the object. In the most common form of this auction, each bidder places an ascending bid which is visible to everyone and the person with the highest bid wins. However, there are chances of cheating since people can increase the bid amount whenever they wish. Despite the fact that cheating is common, this is still the most common form of bidding due to several reasons (Pinker et al, 2003).

Dutch Auction

Dutch auction is the reverse of English auction because the price starts high and then the seller gradually reduces the price until he ...
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