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The latest and ,to date, one of the most
profitable forms of consumer-driven e-commerce. There are two board categories
of online auctions.
Online auctions have proved a big success
with internet users, largely because they do not rely on the fixed pricing
favoured by most online retailers. Most sites run in much the same way as
their real-world counterparts. Sellers post a description of their item for
sale, set a closing date and an optional reserve price, and wait for
customers to bid. personal auctioneers make money by charging sellers an
initial insertion fee and then taking a commission on the sale.
The biggest name in the personal auction field is eBay, founded in
1995 by Pierre Omidyar, following an observation by his wife, a collector of
confectionery dispensers, that people with interests in specialist items
should be able to trade them online. This has turned out to be one of the
internet's most persuasive ideas, as reflected in the large number of
companies that have followed in eBay's path. But none has yet matched the
enthusiasm of eBay's visitors, who line up online daily to trade millions of
items for millions of dollars. Omidyar's community-building prowess
has resulted in that most elusive of qualities in an internet company :
profitability. This has been achieved as a result of a business model
requiring no storing of goods, no carriage costs and, indeed, no interaction
at all with the items for sale. The company simply charges the seller a flat
fee and a percentage of the sale price.
People can now indulge their passion for auctions every where from
amazon to yahoo. eBay in particular has done a good job of introducing
systems for protecting its buyers , who have continued to trade items of
every conceivable type online and helped to maintain eBay's profitability at
a time when most other internet companies have been paralysed or
extinguished altogether by the downturn in high-tech stocks. In 2002, the
company's net revenue exceeded $ 1.2 billion dollars and it reported 62m
registered users; its stock price has remained consistently high as a
result.
Despite its continued success, eBay has not felt itself able to
provide a service to every customer. One man's attempt to sell his soul
online was quickly squashed by the company's lawyers, who claimed that there
was either nothing to sell or that it fell under the site's ban on the
auctioning of human body parts or remains. More recently, the company has
banned the sale of advertising space on a man's body, Nazi memorabilia and
remnants of the Columbia space shuttle. |
