The online auction has been considered as one of the most successful e-commerce models. This can be proven by the growing number of buyers and sellers in proliferating auction sites, both local and international.
Online auction is the kind of business wherein 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, may be one known example. However there are local auction sites that have better or more improved facilities for both buyers and sellers. These are buyandsellplus, auction.ph and bidshot.
Bidshot was the first to introduce wireless services in auctions --- mobile-enabled for bid alerts and bidding, message boards and classifieds. Bidshot Dotcom Company went on to become the premier auction site for what was even then the world’s most advanced text-messaging culture.
However, my favorite auction site is buyandsellplus because it has free ad postings for sellers who offer their “services”. They also have this automatic reposting of ads. These conveniences save sellers time and money. Moreover, they will soon introduce their wireless services ---- you can post, delete, repost and repost ads, search for items, change and retrieve your password, place a bid or award an item anytime, anywhere using your mobile phone. The auction site will soon give you the option to receive SMS alerts and notifications for important transactions, items or account information.
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All auction companies do 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.
Globalization and the reach of the internet have allowed the online auction business to extend beyond its traditional realm of the trade in goods into the area of service provision.
The strategic advantages of online auctions include:
1. No time constraints. Bids can be placed at any time. 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.
2. 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.
3. 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.
4. 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.
5. 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 online auction business becomes for all participants.
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