E-Auction

Electronic auctions offer an electronic implementation of the bidding mechanism available at traditional auctions. Products displayed may be presented through multimedia presentations and E-auction sites may also offer integration of the bidding process with contracting, payments and delivery.

E-auction operators sources of income are normally through transaction fees and advertising also provide value-added services e.g. guarantee of quality of goods purchased over the E-auction site.

Due to the efficient technology of the Internet and the lower infrastructure cost, small quantities of low value products can also be sold through E-auction. Buyers will benefits from competitive pricing and smaller quantity whilst sellers may benefit from the lower sales overheads and better utilisation of production capacity.

One example of an E-auction site is E-bay (www.ebay.com) which started in 1998 and now has almost 1.1 million visitors a day. It is by far the most successful E-auction site today although many more are coming up. It has recently moved into auctioning art, antiques and collectibles by buying the third-largest auction house in America, Butterfield & Butterfield.