Electronic Commerce, Ninth Edition49Online Auctions and Related Businesses (cont’d.)•General consumer auctions•eBay: registration required, seller fees, rating system–Seller’s risk: stolen credit cards; buyer fails to conclude transaction –Buyer’s risk: no item delivery; misrepresented item–Most common auction format: English auction•Seller may set reserve price•Bidders listed: bids not disclosed (until auction end)•Continually updated high bid amount displayed•Private auction option available
Electronic Commerce, Ninth Edition50Online Auctions and Related Businesses (cont’d.)•General consumer auctions (cont’d.)–Another eBay auction format: Dutch auction–Both formats requireminimum bid increment•Amount by which one bid must exceed previous bid–Proxy bid•Bidder specifies maximum bid•May cause bidding to rise rapidly–eBay stores•Integrated into auction site•Sellers generate additional profits
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Electronic Commerce, Ninth Edition51Online Auctions and Related Businesses (cont’d.)•eBay’s success due to unspecified audience–Also spends $1 billion each year to market and promote Web site•Major determinants of Web auction site success–Attracting enough buyers and sellers•Yahoo! Auction operation closed in 2007•Amazon.com with “Auctions Guarantee”–Offered buyer protection through escrow service–Closed in 2006•Overstock.com (still active)