Auction Sites - Business-to-consumer Auctions

BUSINESS-TO-CONSUMER AUCTIONS

Businesses also sell goods and services through auction sites. Small businesses use auction sites such as eBay, Yahoo! Auctions, and Auction World not only to sell merchandise, but also to build their brand and reputation. Online auctions also give businesses an outlet for selling excess inventory that would have remained in their warehouse. Other uses that businesses find for auction sites include test marketing new products to see if they will sell. Occasionally, bidders will drive up the price of item to a level well above what was expected.

Most auction sites post feedback on how well sellers perform. While positive feedback can enhance a seller's reputation, a few negative comments from a small number of buyers have the potential to tarnish a seller's name. In order to ensure positive feedback, sellers must devote more resources to providing high levels of customer service. Auction shoppers tend to be value-oriented and have high expectations for service.

Businesses that use auction sites to list their merchandise must also be prepared to devote time to posting their listings, answering a large volume of e-mail, and managing functions such as billing, shipping, and payment collection. Some of the larger auction sites provide tools to help with some of these chores, and there are even businesses that specialize in providing auction management services to small businesses in the form of Web-based tools. AuctionWatch.com promotes itself as "The Complete Auction Management Solution" and offers a range of services for buyers and sellers.

Selling items to the highest bidder without running a credit check on them leaves sellers open to the risk of non-payment. As a result some of the top auction sites offer an escrow service, where a third party holds the buyer's payment until the product is shipped and received. Escrow services were designed primarily to protect buyers from receiving shoddy or inaccurately described merchandise, but they also offer a measure of protection to sellers as well. At Amazon.com 's auctions, bidders pay using their credit card, and Amazon.com handles the financial aspects of the auction transaction.

Businesses that want to sell at auction have several options. First, they can list their items at the major auction sites. They also can utilize more specialized auction sites that are devoted to business-oriented items. For a bigger fee, businesses can use the services of an auction portal, such as FairMarket Auction Place, which places auction items by category on several other Web sites.