By the late 1990s, millions of computer users had discov-ered a new way to buy and sell an immense variety of items ranging from traditional collectibles to the exotic (such as a working German Enigma encoding machine).
Since its founding in 1995, leading auction site eBay has grown to 78 million users in mid-2006, with revenue of about $7.6 billion in 2007 (see eBay). (Two other e-com-merce giants, Amazon.com and Yahoo!, also entered the online auction market, but with much more modest results.)
Procedures
Online auctions differ from traditional auctions in several ways. Traditional auction firms generally charge the seller and buyer a commission of around 10 percent of the sale or “hammer” price. Online auctions charge the buyer nothing, and the seller typically pays a fee of about 3–5 percent of the amount realized. Online auctions can charge much lower fees because unlike traditional auctions, there is no live auctioneer, no catalogs to produce, and little administra-tion, since all payments pass from buyer to seller directly.
An online auction is like a mail bid auction in that bids can be posted at any time during the several days a typi-cal auction runs. A buyer specifies a maximum bid and if he or she becomes the current high bidder, the high bid is adjusted to a small increment over the next highest bid. As with a “live” auction, however, bidders can revise their bids as many times as they wish until the close of the auction. An important difference between online and traditional live auctions is that a traditional auction ends as soon as no one is willing to top the current high bid. With an online auction, the bidding ends at the posted ending time. This has led to a tactic known as “sniping,” where some bidders submit a bid just over the current high bid just before the auction ends, such that the previous high bidder has no time to respond.
Future and Implications
Online auctions have become very popular, and an increas-ing number of people run small businesses by selling items through auctions. The markets for traditional collectibles such as coins and stamps have been considerably affected by online auctions. Knowledgeable buyers can often obtain items for considerably less than a dealer would charge, or sell items for more than a dealer would pay. However, many items are overpriced compared to the normal market, and faked or ill-described items can be a significant problem. Attempts to hold the auction service legally responsible for such items are met with the response that the auction service is simply a facilitator for the seller and buyer and does not play the role of traditional auctioneers who catalog items and provide some assurance of authenticity. If courts or regulators should decide that online auctions must bear this responsibility, the cost of using the service may rise or the variety of items that can be offered may be restricted.
Since its founding in 1995, leading auction site eBay has grown to 78 million users in mid-2006, with revenue of about $7.6 billion in 2007 (see eBay). (Two other e-com-merce giants, Amazon.com and Yahoo!, also entered the online auction market, but with much more modest results.)
Procedures
Online auctions differ from traditional auctions in several ways. Traditional auction firms generally charge the seller and buyer a commission of around 10 percent of the sale or “hammer” price. Online auctions charge the buyer nothing, and the seller typically pays a fee of about 3–5 percent of the amount realized. Online auctions can charge much lower fees because unlike traditional auctions, there is no live auctioneer, no catalogs to produce, and little administra-tion, since all payments pass from buyer to seller directly.
An online auction is like a mail bid auction in that bids can be posted at any time during the several days a typi-cal auction runs. A buyer specifies a maximum bid and if he or she becomes the current high bidder, the high bid is adjusted to a small increment over the next highest bid. As with a “live” auction, however, bidders can revise their bids as many times as they wish until the close of the auction. An important difference between online and traditional live auctions is that a traditional auction ends as soon as no one is willing to top the current high bid. With an online auction, the bidding ends at the posted ending time. This has led to a tactic known as “sniping,” where some bidders submit a bid just over the current high bid just before the auction ends, such that the previous high bidder has no time to respond.
Future and Implications
Online auctions have become very popular, and an increas-ing number of people run small businesses by selling items through auctions. The markets for traditional collectibles such as coins and stamps have been considerably affected by online auctions. Knowledgeable buyers can often obtain items for considerably less than a dealer would charge, or sell items for more than a dealer would pay. However, many items are overpriced compared to the normal market, and faked or ill-described items can be a significant problem. Attempts to hold the auction service legally responsible for such items are met with the response that the auction service is simply a facilitator for the seller and buyer and does not play the role of traditional auctioneers who catalog items and provide some assurance of authenticity. If courts or regulators should decide that online auctions must bear this responsibility, the cost of using the service may rise or the variety of items that can be offered may be restricted.
No comments:
Post a Comment