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Comparative Analysis of Online Auction Sites Sample Assignment

Comparative Analysis of Online Auction sites

Introduction:
Online auctions are sales transactions including competent offering or bidding that are carried out over the Internet. Whether the sales take position between individual users, between consumers and merchants, or between business entities, the business model of online auctions have relished a rapid increase in popularity, expansion and development.
Benefits:

The rapid development of these markets is usually attributed to diverse factors :

• The first is that online auctions provide a less costly platform for buyers and sellers on niche markets such as specialized products like antique items to meet and conduct transactions.
• The second factor responsible for rapid development is that online auctions can assist businesses entities to reduce distribution and circulation costs. Those items to be sold online can be kept until the right time of their shipment. This helps in reducing the time and money spent in the packaging of the items meant for intermediaries and also helps to prevent the problems of damages. It helps small businesses to reduce the levels of surplus inventory and inventory carrying costs.
• The Third factor is that online auction sites have substituted themselves with the traditional market intermediaries who deal in specialty products like antiques, sports cards, and other collectibles. Online auctions have powerful feature of extensive listings of items and powerful search feature technologies that create niche markets for specialized range of products. Easier accessibility and the reduction in transaction costs have caused the the intermediaries dealing with specialty items to exit out of the market.
• Finally, we can say online auctions are fun. Users of online auctions apparently enjoy the model of strategic bidding, and sharing their views with other individuals. Most of the online auction sites have incorporated active message boards that provide collectors with a sense of community.

Types of online Auctions:

Open cry auction: Open cry bidding is the type of online auction where the bidding generally starts with low bid or at zero bid and proceeds upward quickly by further increments. The potential buyers are well aware of the current bid amount and they get equal opportunity to raise the bid.
Sealed bid auction: In this type of online auction the potential buyers have no information about about other bidders and the amount of theirs bids. This type of auction is carried out when the seller doesn’t want the bidders to have the information of the other bidders. This causes the potential buyers unable to prepare bids quickly. An example of such kind of auction could be a seller receiving bids from different vendors for any contract.
Dutch auction: A Dutch auction works in the opposite direction. The items are generally offered at a higher price in the initial stage and gradually the bid price reduces until a potential buyers agrees to buy at that price. The first person to bid is only allowed to purchase the item. This type of auction works best when a business is selling a few items which are expensive and possess high demand.
Forward Auction: In this type of auction process there are multiple number of potential buyers or bidders buying from a single seller.
Reverse Auction:  In this type of auction a single buyer requests for a purchase of items from multiple sellers and these sellers post bids accordingly. Reverse auctions play a important role in business-to-business transactions particularly for large-scale, single-time purchases.

What to Look For in an Online Auction Site?
Online auctions should involve buying and selling of items in an easier and safer way. Online auction sites should be easy in accessibility and navigation, it should provide a diverse range of categories and subcategories of various items, customized selling features and strong emphasis on feedback. In addition to the above the site should have detailed information about the item and the auction including images, descriptions, bid history and information about the seller.

The following are the criteria used to evaluate online auction sites:     

1- User Base
More number of sellers in a online auction platform indicates higher competition. But it also indicates that there are more potential buyers. This will result into more options and better bargains. The User base is calculated on the basis of diversity and volume of items which are up for auction and the total number of members the online auction service have.
The market leader eBay has 14 million auctions running at a given time. eBay has more items as compared to any other online auction sites. It has become a generic name when online auctions come into mind. With such a huge user base it has made the competition in the market somewhat insignificant.
As compared to the market leader eBid has managed to win over several dissatisfied eBay users and continues to grow. eBid also offers a Buddy Points system to encourage users to enlist their friends. Buddy points can be obtained when other user signs up with your referral and these points makes you eligible to bid on certain specific auctions.
On the other hand OnlineAuction, still small compared to top rivals has a better user base as it has emphasized on good service quality.

2- Fees
Fees is the service charge charged by online auction sites for listing the auction. Some online auction sites also charge for registration and final auction. A seller does not want to spend extra money in listing and final auction.
eBay’s major disadvantage is the fee for sellers. All the sellers have to pay for listing their items along with the final auction fee which is much higher than other competitive auction sites.
eBid’s is successful because of its low fee offering. They don’t charge their sellers to list their items and the registration process is free of cost.
In Online Auction they don’t charge for basic membership or registration. A member can simply register and start buying and selling the products. They don’t even charge for final auction.

3- Selling
Sellers should be given privilege and right amount of control over their items. They should have the power to list their items, categories them or put them into right categories. They should have the power to cancel the bids or make alterations in the description and information about the products like image editing. The online auction should provide the facility of individual seller account with the feature of accessing the inventory of items to be auctioned.
eBay has a robust technological platform with step-by-step process for listing your product and providing appropriate description. You can customize your items listings, block bidders and cross promote your other set of items.
eBid provides sellers a unique feature of opening up on online stores of diverse items by sellers. They can open up to 5 stores simultaneously at no extra cost. They can even see the number of views on a particular product with the help of a simple view counter feature.
Sellers at OnlineAuction can block the bidders who seems to be unfaithful. Sellers also get the facility of removing the listing free of cost.

4- Buying
An online auction site should be easy to handle with fun while looking for your needs. Online Auction sites should provide tools and features so that a buyer should feel confident while bidding. The auction site should provide a clear picture and detailed information about the products. Some sites provide advanced search feature for more customized set of preferences.
eBay is the most easiest and safest auction platform. A detailed information is available for every listed items on eBay including description, picture, information about the seller, bid history, location and payment options. eBay offers search feature facility with the help of which items can be accessed with simple keyword search. Various sub categories are included which makes browsing easier and convenient.
Other top auction sites like eBid and OnlineAuction  also provide and support basic useful features like search option, user account but the leader eBay also has several unique applications such as eBay toolbar and downloadable desktop application that provides an easy and ultimate auction experience.

5- Reliability/Security
Safety and security have prime importance in online auction sites. Buyers should have assurance that they are buying from a genuine source and sellers should have control over their auctions. Most online auction sites have a feedback system where sellers and buyers can rate each other based on transaction experiences. In this way a member can judge the creditability and genuineness of other potential buyers and sellers.
eBay has an internal messaging system, which allows members to interact with eBay personnel to get informed about the quality of products. eBay also relies heavily on user’s feedback through their feedback program. They have encouraged their users to have paypal accounts to carry out safe and secure transactions.
eBid and OnlineAuction also stress on strong feedback systems and they continuously aware their users of various online auction frauds. While eBid allows adult auctions OnlineAuction prohibits adult auctions.

6- Help/Support
Online auction services should provide comprehensive customer support services through several transparent communication methods including email, live online chat, telephone and FAQs.
eBay has the largest customer help and support center. One can easily access various products through simple and advanced search feature, easy to use help feature and a glossary of items and resources being auctioned on the site. eBay provides communication facility through their email contacts and live chat feature. eBay has incorporated search feature in their help section which helps users to find answers to their specific queries.
OnlineAuction is one of the only auction site who has direct contact number for its users which sites like eBay and eBid doesn’t have.

Conclusion
Auctions on the Internet represent one of the most interesting developments in electronic commerce. In the presence of market giants like eBay other competitive auction sites have limited opportunities to tap in terms of user base, technology and easy access. But they can prove themselves to be competitive in terms of lower fees, customer support, strong feedback system and proper monitoring of their user’s preferences so that they can provide a better service.
No doubt eBay has become the market leader due to its robust platform of online auction. With the infuse of latest technology and applications, it has made itself the most preferred destination for online auction. With the adoption and implementation of various 5strategies like concentrating on local and international trading, creation of strong brand, maintaining a strong community affinity and continuous up gradation of site features and functionality eBay has come out to be the world leader in online auctions.

Other Sample Assignments in Management Homework Assignment :

Marketing of Services	Comparative Analysis of Online Auction Sites
Gross Domestic Product

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