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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.

A forum is a great way of discussing a topic that you are interested in and knowledgeable about with like minded people or of sharing your experiences and possibly helping beginners in the subject. A well run forum is a pleasure to visit – you feel welcomed and amongst friends.

Running a forum is more than just about letting every Tom, Dick and Harry join and then letting them dictate the ‘mood’ of the forum. It’s up to you, as the administrator, to set some ground rules and abide by them.

Firstly, you must manually activate every new member registration. Spammers are unfortunately attracted to forums like flies to honey, and even the newest forums will start getting a trickle of these every day. Although it’s tempting to allow these to join to up the membership levels to make it look like you’ve got an active forum, allowing these in will be a bad mistake. At the least you’ll be inundated with advertising, and at the worst some very unwelcome posts might be made. You, as the site owner, will be responsible for what’s on your forum. As you go through the registrations each day obvious spammers with made up email addresses or user names which are simply advertising products will be easy to spot. If you need to go further you can check on the IP address and where the person is coming from. If you’re still not sure, do a search at StopForumSpam – an excellent website that keeps up to date records of spammers, as these people try to join every forum going. You’ll soon become quite quick at spotting spammers against bonafide registrations.

You can’t start a forum and then lose interest in it. Unless you are working to activate registrations, moderate comments, administer the forum and contribute to discussions yourself it’s not going to get very far. Running a forum takes time every day.

You need to decide where the boundaries lie and the kind of behaviour you’ll tolerate. Some forums I have been on insist people search for answers already given to similar queries before posting a new question, and when a ‘newbie’ posts they get responses fired at them to search the forum for answers first. Or are you more tolerant, and encourage individual replies? It might take more time repeating the same information, but it does make the forum more personal. What happens when someone asks a daft question, and gets shot down rather rudely by another member? Do you tolerate that? Or do you try to set ground rules for how people should behave towards each other.

Sometimes this might depend on the audience for your subject matter. I run a specialist forum for keeping bearded dragons, and we’re likely to have older children joining as well as adults. Sometimes an incredible ignorance is shown about keeping these reptiles – people should have done their research before taking them on, and as such these poor creatures are now looking at short unhealthy lives unless their owners can be given correct advice on how to keep them. On another similar forum, new members asking stupid questions are shot down in flames, and they leave after making one post, and without gaining any help at all. On my forum I actively encourage all members to be welcomed, and their most basic questions answered so that they get the information they need to the benefit of them, and their pets.

Now this is obviously just an example, but do you want to help and encourage people? Or just have a membership of ‘experts’? That is a decision you need to make, as it’s you, and the moderators you might have to help you, who can influence this by the way in which your members respond to posts and also the way you moderate. Sometimes you need to PM posters who aren’t interacting in the way you want them to, and accept this might lead to losing a member, but if it helps for a better community overall, the loss of one might prevent all those ‘guests’ who visit before taking the plunge think twice before joining. It’s interesting, but I’ve only had one problem with a member in the 5 years I’ve been running the forum and had to ban them. Most members pick up the friendly culture of the forum very quickly.

When your forum starts to become very active you might find it is too much to moderate all the posts yourself. You will find regular posters are flattered if you ask them to become a moderator and help you run it. You should ensure that anyone you ask has views that do not diametrically oppose yours (although healthy debate should always be welcomed), and whose approach to answering posts is in line with the ‘feel’ you’ve developed for your forum. You might also want to appoint someone or more than one (depending on the size and activity on your forum) to be other administrators, particularly to help with the activation requests for new members. Sorting out 150+ spammers a day is better with help! I’m in the lucky position of having an administrator in Australia – from my point in the UK I do the day shift, and he does the night!

You may think you are very knowledgeable about your subject, but it’s great if you attract someone to join who’s known as an Expert in their area. I invited two such people from their contributions on other forums and their expert knowledge and experience has been a real boon to my forum.

If you allow people to sell items or services, you might want to think whether you’re going to let people join just for this purpose, or whether you want to restrict this service to contributing members. You might also want to restrict what they can offer. A good rule is that someone needs to make 10 posts before being able to put up information about what they want to sell.

Something that encourages people to post is always helpful in trying to get a lively forum. Assigning different ranks to people who post above a certain number of posts can encourage people to try to reach the next level. On my Bearded Dragon forum we go from Egg, through Hatching to Adult – obviously not appropriate to many forums, but you get the idea.

I found that forums don’t actually help you to make money – having Google ads on the forum did not bring me any revenue despite a high number of visitors to the extent that I abandoned them. People come to the forum for advice or to chat, not to click on adverts. Linking your response through to informative pages on your website is the best suggestion I can make, and of course, having a forum increases the number of visitors to your main site.

If you have a forum but it’s becoming less active, look at the tone of the posts and see if the feel of the forum has changed. Unless it was once more relevant that it is now (a forum about the London Olympics will be less topical in 2013!) you might want to try to make it more positive, friendly and welcoming to newcomers. This means posting a lot yourselves, and engaging the moderators in trying to turn round the feel of the forum. If a particular member is causing problems, then don’t feel bad if you need to ban them. It’s your forum after all, and it’s totally up to you who you allow on there. You need to make sure you and your moderators keep active and posting – people want to feel important, and like someone ‘official’ to respond to them.

Forums are a great addition to the internet – there’s one set up for almost every niche subject, and people enjoy using them to get information they need, or to share their knowledge. A well run forum is a pleasure to visit, just like going to your friendly local pub. But no one will want to put themselves in the firing line to get abuse from bullies. So it’s your job to keep them out.

Paying attention to your forum and keeping to these best practices will keep your forum active, friendly and attracting the right kind of visitors and new members.