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Electronic commerce ninth edition 48 online auctions

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Electronic Commerce, Ninth Edition 48 Online Auctions and Related 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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Electronic Commerce, Ninth Edition 52 Future challengers to eBay – Must overcome lock-in effect • New auction participants inclined to patronize established marketplaces – Example: Japanese general consumer auction • Yahoo! first to enter market – Now dominates (more than 90% market share) • eBay maintains low market share (less than 3%) Online Auctions and Related Businesses (cont’d.)
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Electronic Commerce, Ninth Edition 53 Specialty consumer auctions – Identify special-interest market targets – Create specialized Web auction sites • No need to compete with eBay – Examples: • JustBeads.com, Cigarbid.com, Winebid Online Auctions and Related Businesses (cont’d.)
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Electronic Commerce, Ninth Edition 54 Consumer reverse auctions Reverse bid – Visitor describes desired items or services – Site routes visitor to participating merchants • Reply to visitor by e-mail • Offer item at particular price – Buyer accepts • Lowest offer • Offer best matching buyer’s criteria All these types of sites now closed Online Auctions and Related Businesses (cont’d.)
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Electronic Commerce, Ninth Edition 55 Consumer reverse auctions (cont’d.) Priceline.com – Considered a seller-bid auction site – Visitor states desired airline ticket, car rental, hotel
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Electronic Commerce Ninth Edition 48 Online Auctions and...

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