There are numerous benefits of Internet auctions to sellers, buyers and market makers in an auction.
Internet technology has changed the manner in which business can be conducted, online auctions allow users to participate in online markets without the limits of time or geographical location. This nature of doing business online is flexible; just with a computer device and internet connection, users can buy products online cost- effectively, this platform has a lot of advantages and a few disadvantages.
Advantages include:
A physical location is not necessary
The products being sold in an online auction do not require a physical location, it is possible to manage the inventory online. Once a sale has been done, then the product can be shipped physically, this offers flexibility to online users as they do not need to cover any geographical distance to get to where the product is located. The physical appearance of the item can be posted online where users can check the status of the item.
Convenience
The bidders can get involved in an auction from any location or nationality, there are no limitations as far as time, or person participating in an auction are concerned. Bidders can participate in an auction while carrying on with their activities such as travel, at the comfort of their homes, or an office using any computing device connecting to the internet (Yen 2013).
Information
Online auctions have the capacity to provide enough information to everyone participating at the same time, the information regarding each auction can be neatly presented on the websites. All documents of the products can be made available; there is no confusion to obtain details when necessary.
Effective use of Time and Money
The nature of doing business online does bring the advantage of saving time and money, as there is no travel time to reach your destination, all that is required is to enter an auction site and begin transacting in real time regardless of the location (Zhang, Hong, et al 2014).
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Choice
Online auctions offer multiple options and a variety of product online conveniently; the products are well categorized making it easy for users to search their products or compare prices.
Quick Response
In physical auction rooms getting information on product in time may not only be slow but also impossible. Online auctions make it possible to see bidding results instantly, the bid amount or price is updated as the bidding is placed and when there is a winner the results are immediate.
Bidding Time
Each time a bid is placed, the bidding count down can be automatically managed by adding 20 or 30 seconds as set by an administrator, this allows the time for bidding to be extended giving more time for bidders.
Value for Money
The main advantage for online bidding is that it provides opportunity to compare prices online, the bidder can carry out a research on which product quality and prices other online auction sites have before bidding on products online (Korgaonkar et al 2014)
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Effective Marketing
For Sellers online, resources offer collective intelligence that reveals user interests, behavior and buying habits. This information can be used to make more effective sales online. This data can also be used to drive email marketing methods, tailoring to user’s interest and behaviors.
Low Capital
For sellers, there is no need for extensive capital setting up a physical store and consequently maintaince cost of that store, it eliminates all the capital and costs that are required to run a physical store.
References
Korgaonkar, Pradeep, Maria Petrescu, and Enrique Becerra. "Shopping orientations and patronage preferences for internet auctions." International Journal of Retail & Distribution Management 42.5 (2014): 352-368.
Yen, Chiahui, Meng-Hsiang Hsu, and Chun-Ming Chang. "Exploring the online bidder’s repurchase intention: a cost and benefit perspective." Information Systems and e-Business Management 11.2 (2013): 211-234.
Zhang, Hong, et al. "A framework for truthful online auctions in cloud computing with heterogeneous user demands." IEEE Transactions on Computers 65.3 (2016): 805-818.
