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Businesses online auction business rapidly changing

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Businesses Online auction business: rapidly changing Three auction Web site categories General consumer auctions Specialty consumer auctions Business-to-business auctions Varying opinions on categorizing consumer auctions Business-to-consumer Consumer-to-consumer Consumer-to-business
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Electronic Commerce, Ninth Edition 49 Online 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
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Electronic Commerce, Ninth Edition 50 Online Auctions and Related Businesses (cont’d.) General consumer auctions (cont’d.) Another eBay auction format: Dutch auction Both formats require minimum 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 Edition 51 Online 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)
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