In the simplest way an auction is defined as a public place where products are sold to those who can offer the biggest price for them. Auction business model has been popular since ancient times. The first written account of an auction was provided by Herodotus in the 5th century (B.C.). He was describing the auction where girls for marriage were put for trade to be married in Babylon. In the Roman Empire, the auction model was used for the purchase and sale of the spoils of war, slaves, as well as for the sale of debtors. In 193 AD there was a case of putting up the Roman Empire for the auction which led to a short civil war and the beheading of the winning bidder.
Since then Auction industry has experienced rapid growth going both ways: offline and online. Online auctions were born in 1995 at Internet dawn; later this year eBay began its work. The process of online auction immersion has been very quick as Internet use became more commonplace; consumers were more likely to purchase goods from online retailers. Moreover, World Wide Web offered new opportunities for auction owners and customers that they never had in real auctions. It is confirmed by the fact that all the biggest world websites hurry to obtain their own online auctions (auctions.yahoo.com, auctions.lycos.com). Another tendency in the online auction market shows how the world’s largest companies conducting auctions also go online using the experience of the e-commerce pioneers, i.e. Sotheby’s and Amazon.
How to sell on online auction?
Auctions transition to online sphere allowed solving one of the biggest problems of real, offline auctions that brings the most cost –gathering all participants in one place at one time. Today there is no need to be physically present at the auction location, and this helps to lower users’ expenses and increase the number of participants. Detailed information about the product, possibility to put as many products as you want to an auction, auto bidding system, clear and convenient payment system and many others features make both business owners and customers continue using online auctions.
One more reason why Internet auctions are so popular today is that offline marketschemes of selling do not work anymore.Consumers need an element of game to take part in purchase act where they can be both entertained and get product for a juicy price. Auction gamification encourages people to get involved in auctions and make their bids. In their turn auction owners get profit from the number of users.
Thus, online auctions have effectively created a huge marketplace where one can sell or buy anything he likes. There are a lot of types of auctions that have evolved since ancient times. The main ones today are: Penny auction (also known as Scandinavian or One-Cent Auction), Reveal auction, Dutch auction, Classic auction, Lowest unique bid auction, trading platform finally. All these types embrace the needs that entrepreneurs have nowadays in order to develop a prosperous business.
It is seen from the example of the most huge internet auctions that almost all kinds of products can be sold there. The most common product categories are the following:
- Products connected with information technologies (tablets, PC);
- High-technology products that are new to the market;
- Discounted items;
- Rare demand products;
- Recent bestsellers products;
- Items for collections.
Thus, today online auction is a substantial part of e-commerce that opens wide opportunities for all of those who are interested in making their business successful. Statistics speaks for itself: according to the report by eMarketer, B2C (business-to-client) e-commerce sales worldwide grew 21.1% in 2012, to top USD 1 trillion for the first time, and 19.2% to USD 1.298 trillion worldwide.
In 2014 , it is expected that B2C e-commerce sales are expected to reach $525.2 billion in Asia-Pacific region and $482.6 billion in North America. China will take in more than six of every ten dollars spent on ecommerce in Asia-Pacific this year and nearly three-quarters of regional spending by 2017. Beginning in 2016, China will overtake the US in spending. Massive gains in China, as well as in India and Indonesia, will push Asia-Pacific’s growth ahead. These countries, along with Argentina, Mexico, Brazil, Russia, Italy and Canada, will drive ecommerce sales growth worldwide. At the same time eMarketer consider e-commerce in other countries nearing maturity.
Nobody hides the fact that auctions come with high risk. For example, a buyer can purchase a product that doesn’t exist; seller can be a subject to false bidding. To reduce the risks it is recommended to implement techniques that test the reliability of people you are going to deal with. Thus, one of the best-working practices is ranking system which allows to see a seller’s rank or a buyer’s one comprised according to opponents feedback.
The future of online auctions looks bright. Many new auction websites appear every day on the web. They are based on innovative software technologies which helps to anticipate users’ expectations. Owning an online auction will bring you to the edge of modern business technologies and allow taking on a new niche before it is fully occupied.