Let me start with the numbers of online behavior.
Buy a product 71%
Participate in an online auction 26%
Sell something online 15%
Now that so many people are engaged in online buying and selling, this article where I explain the types of online auction concepts and online auction websites becomes important.
Below you will learn how different types of online auction websites or online auction concepts work or how online buying and selling works.
(i) Direct Auction There are online auction sites eBay, ebid with a process where sellers upload their auction for sale at a fixed price, buyers come in and buy the item at that price. For the same auction, buyers can also sometimes bid a higher price and the highest bidder wins when the auction ends.
Such auction websites require sellers to pay the fees listed below
(i) Item postage (free for limited items)
(ii) Final Value Fees (4% for each website)
(iii) Payment Gateway Fees (3.9% for PayPal)
An item that sells for $10 costs the seller nearly $3.5 because most of that money goes to fees.
So how does the seller earn more net profit from the same sales sold in such places online?
Now think of a buyer – a buyer bids higher to win an item or simply buys the item at the price listed on the website.
How often do you walk into a store and negotiate by saying you want to pay a higher price for the product? OR alternatively, how often do you buy the product without expecting a discount on a product?
(ii) Lowest Unique Bid, Highest Unique Bid.
Here the buyer buys bids and uses them to bid on the products. An auction is started and the buyer has to place their price for the product. ie provide value for the product. Each time the member bids, it costs the member. The member can set multiple prices for the products.
Depending on the logic used, i.e. one-time lowest bid or one-time highest bid, the respective member wins. That is, if you have bid a value ‘X’ that no other member has bid, and if it is the lowest value bid by another, the product at that ‘X’ value is yours
At such auctions, the chances of winning the product are very slim. You are also dependent on the chance of winning the product.
So, in order to buy a product from such auction websites, you really don’t need to be a serious buyer and have a lot of money left over in bidding costs because you cannot control your buying decision.
And here the most important thing is that sellers do not upload auctions, the sellers are just the site. So the profit from the listing costs goes entirely to the website owners. The more people bid, the more profit the sellers make.
There are a few websites that you will find if you are looking for the lowest unique bid auctions or the highest unique bid auctions.
(iii) Penny Auctions. This is an auction on sites like Swoopo etc where the auction starts with the price of the product as zero and increases with each bid. To participate in these auctions, you must purchase and use the bids. Each bid increases the price of the product. Then the countdown begins before the timer goes to zero if there is no other buyer bidding the product for that price. but that doesn’t happen. There is always someone who outbids you. To participate in such auctions, one must have a lot of money and time to spare. Here, too, the sellers do not have their own purchasing decision in their own hands, but are dependent on chance or luck. Here, too, you can see the price increase with each of your bids. So the question remains whether the buyer would be willing to bid to increase the price of the product.
Here is the seller’s website. All products are offered for sale on the website itself. All proceeds from your bidding costs go to the site as profit. However, there is much discussion about such penny auction websites that they indulge in scams by outbidding members to just let them keep bidding. The more members bid, the more money the site makes. Such penny auction websites are not interested in selling products, but they want you to keep bidding.
You can get a list of penny auction sites if you search for the term penny auction site.
(iv) Reverse Auction
This is my favorite. You’ve seen auctions where the buyer is asked to bid for a price increase of the product, you’ve seen auctions that have hurt the seller’s bottom line. Reverse auction works to benefit both buyers and sellers. In reverse auction, the price of the product keeps falling until someone buys it. The auction starts with the selling price of the product and the price of the product falls. The current price remains hidden from the buyer. The buyer pays a small amount to see how much the price of the product has fallen. The buyer then has a certain amount of time to decide whether they want to buy the product at this reduced price. He can always check the price of the product. Here the buyer is always in control of his purchase decision and is not dependent on chance or luck. If he is a serious buyer, he can always buy the product at a lower price than the retail price.
Here the seller lists the price of the product. The seller also benefits by increasing the price of the product every time the buyer sees the current price.
As the buyer price falls, the seller price rises.
This increased price that the seller receives helps increase the net profit for the seller.
Thanks to Ajietpal Siingh | #Online #Auction #Website #Concept