Selling your soul online
Summary Description 5 Minute Guides presents an overview of online auctions.
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Roullas Top10 Simon Vandore

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Editorial InformationArticle Location http://www.newswire.com.au/0003/5mgauc.htm
Article Topic 5 Minute Guides
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Post Date 30/03/2000 08:13 AM Status Posted Entered by Simon Vandore on 27/03/2000 05:04 PM


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Why are online auction sites always in the news?
Because people are using them. It's the online craze of the moment. Shares in the companies behind online auction sites are fetching high prices and their revenue streams (user fees, commissions and advertising) seem to actually work. Buyers and sellers can be anywhere in the world, making bids and showing items from the comfort of their own homes, and the online environment makes it easier for sellers of obscure items to find the perfect buyer. In any auction there are bargains to be found, and fortunes to be made -- it's no different online except that it takes place globally, rather than in a single room.
Auctions? Why not just classifieds?
Classified advertisements tend to be a whole lot more civilised than auctions, but there are certain things that sell better in the auction environment, such as rare collectibles. It's hard to put a mutually satisfactory price on something when you place a classified -- the advantage of an auction is that the buyer and seller are forced to reach agreement on the value, rather than being turned off by the initial offer or asking price. The Web auction environment is primarily the domain of second-hand goods, but some businesses have taken to selling their new products via auction.
What's this eBay thing I keep hearing about?
Hosting over 2.5 million auctions a day, eBay is the original online auction house. It's just a Web site full of auction listings, categorised according to subject in a similar way to Yahoo's index of Web sites -- Yahoo itself now has a rival auction site. Anyone can become a member and sell items (paying to place an advertisement on eBay, and then paying a small commission based on the final sale price) or make bids. It's a secure environment, where users' identities are hidden until they contact each other to conduct a transaction. Though it operates on a global scale, eBay now has localised sites including an Australian version. Other online auction sites include Stuff and Fairfax's Sold.com.au.
How does an auction work online?
The usual format for an online auction is for the seller to place a description and maybe some pictures of the goods on the auction site, perhaps setting a reserve price (the minimum to be accepted). Bidding then opens and continues for a number of days (the time remaining is displayed by the site). The host site takes no responsibility for what happens next, but imposes an honorary system of rules on participants. Once bidding closes, the seller and highest bidder must contact each other within a set period and conduct the transaction. Each is aware that the other may place positive or negative comments in their counterpart's eBay profile and rate performance -- as it is desirable to have a positive performance rating (particularly for high-value or high-volume auctions), both parties will usually be well-behaved and honour the transaction.
What about Dutch auctions? Sounds dodgy . . .
If a seller wants to move several identical items fast in an online auction, he or she may elect to use a 'Dutch auction'. The seller nominates a starting bid and states the number of identical items for sale. Bidders submit buying prices and the quantity they wish to purchase. When bidding ends, the lowest successful bid wins and gets the first of the items. The next winning bidders pay the same low price as the winner, until all the items in the batch have been sold. While eBay has a Dutch auction option, the primary exponent of this style of trading is uBid.
Aren't people just selling junk no-one wants?
Sure, some people are trying to find a buyer for their great grandmother's woodworm-infested, guano-encrusted rocking chair, and sometimes they even succeed. On the other hand, people keep coming back to online auction sites because of the bargains they do find. It may seem like junk to you, but it may be exactly what someone else has been searching for. Then there are the weird auctions -- recently someone tried to sell his soul on eBay. The company deleted the auction and the user's account on grounds that there was no proof the item for sale existed. There have been attempts to sell planet Earth for $US1 million and even someone's 'rare bottled fart collection' attracted several genuine bids. And there's plenty of other stuff being sold on eBay which blurs the lines between fiction and reality. For example, a whole section is devoted to the sale of items existing only within the online gaming universes of Ultima Online and EverQuest. Rare in-game swords, which are actually just data on a hard drive in California, might sell for $US120. A well-equipped level 50 character in EverQuest can go for thousands of US dollars. Makes you wonder.


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