The Positives and Negatives of Online Auctions

Internet auctions have become increasingly popular over the years for a number of reasons, from their broad geographical reach to their absence of time limits. If you are contemplating moving into this area of selling there are a wide variety of attractive benefits to consider, but also some negative aspects to take account of. Here is an outline of some of both the pros and cons:

Cost-effective

Auctions can be one of the most cost-effective ways of selling goods online. There’s a plethora of cost saving measures sellers and auctioneers can take. It is considerably cheaper to organise an online auction than an offline auction event – with an offline auction money needs to be spent on a venue, a professional auctioneer, item storage and various other necessities. There are comparatively few expenses to worry about online… Auctions can also be an excellent way of liquidating old or excess stock. Selling these items by auction tends to bring in significantly higher profit margins than selling them off at a fixed discounted rate. Marketing is another area in which Internet auctions can save on costs. Marketing materials in the offline world can be costly and time-consuming to produce and distribute. Online marketing is relatively cheap, and has numerous other advantages.

High profits

Online auctions are open 24 hours a day, 7 days a week. They can go on for weeks (or even months). This is in contrast to physical auctions, which typically last for no longer than a few hours. This lack of time constraints is a great asset. It means that bidding can carry on for longer and thus lots are likely to sell at a higher price. Bidders find the competitive environment of auctions exciting and exhilarating. This is true of Internet auctions just as it is of auctions in general. This atmosphere can encourage participants to bid for items at significantly higher prices than they would in other situations. It is not surprising that online auctions have often been compared to gambling. As in gambling, participants can become caught up in the excitement of the event and become increasingly reckless with their money. This can lead to prices being driven well above and beyond market value.

Wide reach

Whereas in the offline world auction attendance is limited to those who can manage to physically be present at the event, auctions on the Internet can potentially be accessed by a vast and diverse audience of people from every corner of the globe. Items can be sold to people sellers would never have had access to previously. The larger the number of participants in an auction, the higher the prices that items are likely to sell for. There can also be a larger number of products up for auction. The increased reach of online auctions can allow sellers and auctioneers to create new specialist markets within their sector. Online auctions provide an astonishing degree of access to unusual or niche items that rarely turn up for sale in normal circumstances. For example, in the offline world machinery tools may become available for sale only occasionally and go for a high price when the do come up for sale. There is a wide geographic market for these items online. If marketing is targeted effectively, you can make lucrative sales.

Efficient marketing

Trading online offers the opportunity to market products in an exceptionally efficient and effective way. Data from your website can be used to identify customers’ and visitors’ buying and viewing habits. This means you can make highly informed decisions based on your customers’ interests and tendencies, and target your marketing activities more accurately. Social networking and blogging are very useful tools for anyone with an online business. Social networking can provide a steady stream of contacts and sales leads, as well as allowing you to publicise your auction site in a general way. If you frequently take part in online discussions relevant to the goods you sell you can offer your advice and expertise in the area and encourage people to put their confidence in you as an auctioneer or business partner. Writing a blog can also provide excellent publicity and customer interaction, as well as another route to your site for search engines.

Downsides

However, Internet auctions can also have their downsides…

• All websites are vulnerable to technical glitches. Technical glitches could cost you significant amounts of money, and customers who encounter a glitch when using your site may be permanently put off from buying from you.

• Criminal activities are something else to which e-commerce websites can be susceptible. If customers pay for items through your own site it is important that you scan the server for any potential security risks and comply with PCI DSS requirements.

• It shouldn’t be forgotten that there is still a significant number of people (particularly older people) who are not adept at, or not enthusiastic about, using the Internet to buy goods. Basing all commercial activity online may cause companies to lose these customers.

• Online auctions tend to lack the bustling, highly-charged, highly competitive atmosphere of auctions in the real world. This could lead to less competitive bidding and thus lower prices. Online auctions tend to see a dramatic surge in bidding activity towards the end of the auction, rather than sustained competitive bidding throughout the auction.

• Some bidders engage in a practice known as “sniping” – not placing any bids until the very last moment of an auction (when it is impossible for other participants to place competing bids) so as to avoid a bidding war that will drive the price higher. Naturally, this is not very beneficial for sellers and can result in lots selling for well below market value when in a physical auction they would have sold for a higher price.

Overall, the benefits of online auctions tend to outweigh the risks and downsides. However, it is important to research and consider all aspects of online auctioning before making the decision to move into this area of commerce.

Intermediate Ways to Product Creation

Creating a product with a success guarantee is difficult. But one can initially take certain precautions while designing or creating a product, so that the product becomes successful after it is launched. Here are some ways to product creation that will help in making the product successful

The first step to successful product creation is to make an in-depth study of the previous products that are of the same nature of the new one. Find out their pros and cons. If a particular product has been popular among the people find out why and if a similar product has been unsuccessful find out the reasons for its failure. Research has always proved to be the key to popular and perfect product creation.

The next way to targeted product creation is creating the product according to the needs of the probable consumer. The product creation should be such that it greatly fulfills the desires of the probable consumer. Creating a product that suits the demands of the consumers is the best way to attain success. Carry out surveys to know the desires and requirements of your consumers.

Proper time management is also a key factor for successful product creation. If you target to complete your products by a particular time of the year, may be because it is the best time to launch it, make sure that you do that. If you so not complete your product creation within the time schedule, then you will lose the favorable market conditions of that time. Also getting late in schedules means, delay in starting a new venture.

New Online Shopping Deals Through Reverse Bid Auctions

Consumers are always looking for a way to save money on the items they want or need. Most of the items purchased online are luxury items and not necessarily a necessity. People need these luxuries to entertain themselves and when they can find these goods at a fraction of the cost they’re quick to spring on them. For years people have turned to sites like Amazon and eBay to find the lowest prices on consumer electronics and other goods but things are changing as people consider the potential discounts available.

One of the primary differences between traditional auction sites like eBay and pay per bid auction sites is that buyers pay a fraction of the cost consistently. This rarely happens on major auction sites, where the final cost is often just under the retail value. Image the delight of buyers on bid auction sites that get a MacBook or new LCD television for under $100.00.

This goes to show why reverse auctions and other pay per bid auctions have grown steadily in popularity as more people discover the savings to be had beyond the traditional auction model.

In a traditional auction buyers are competing against one another to purchase an item from a seller. As they bid, the price increases until one person stands out willing to pay the highest bid. The auction finishes and the product goes to the highest bidder.

Reverse auctions work in much the same manner in that they have a seller that’s offering an item for sale. A number of buyers all bid competitively in order to win the item that’s being sold. That’s where the similarity ends however. In a reverse auction, bidders are placing bids in order to drive the price down. When the auction finishes, the item goes to the lowest bidder. Some auctions force you to drive the price to zero before you can win, others let you continue to bid down the price until the price just gets to be too tempting and someone scoops it up in a “buy it now” fever.

Reverse auctions and other bid auctions have matured into a billion dollar global business yet they tend to remain under the radar. The primary reason is because they’ve only become common to consumers in recent years. Previously, these types of reverse auctions were used by business to business networks and government agencies.

There’s a great deal of excitement for consumers now, and it’s helping that popularity climb as more people hear about. The tension and nail-biting excitement really gets people going and can cause the adrenaline to surge in the last minutes and seconds of an auction. In many reverse bid auctions the potential buyer has to make a decision quickly about buying an item as they reveal the price lest someone else scoops it up.

With many bid auctions, there’s a constant overhanging chance that the item could get scooped up by another bidder at any time. Gone are the days of the constant flow of bids and “outlasting” other bidders. A strong strategy is needed for buyers that want to take a great deal home without overpaying in the excitement of the auction.