William Vickrey, highly regarded as the founder of auction theory, was an economics professor at Columbia University when he published two papers outlining his views on auctions:

“Counterspeculation, Auctions, and Competitive Sealed Tenders”, 1961, Journal of Finance

“Auction and Bidding Games”, 1962, Recent Advances in Game Theory

In 1996 he received a Nobel Prize “for fundamental contributions to the economic theory of incentives under asymmetric information.” It’s important to understand that asymmetric information is an essential component of auctions, where potential buyers have varying levels of knowledge about the value of the item.

Although Vickrey considered his work on auctions as “one of my digressions into abstract economics, at best of minor significance in terms of human welfare”, to those of us who work with online auctions, much of what he outlined is useful to understanding our marketplace.

Vickrey identified 4 general types of auctions:

English

Dutch

First-price sealed bid

Second-price sealed bid

English Auctions

The most common type of auction is the English Auction, although it may also be known as an ascending price auction. In ascending price auctions each subsequent bid is higher than the previous one. This is the most popular type of auction for single items.

Although traditional ascending price auctions use a “soft close” format - where bidding continues until a final bid is placed, the majority of today’s on-line auction sites use the “hard close” format - also known as a ‘time interval” auction having a set time limit, regardless of ongoing bidding. It’s important to note that in a “soft close” format, bid snipping, that is bidding during the last few seconds or minutes on an item, is eliminated since the auction stays open as long as bids are being made.

In an attempt to minimize bid snipping and provide more of a “soft close” characteristic to their “hard close” auctions, eBay allows bidders to use “proxy bidding”. In proxy bidding, a bidder enters the highest price they are willing to pay for an item when they first bid. The bid begins at the lowest possible level and increases automatically only if their original lowest bid has been beaten. For more in-depth information on the “proxy bidding capability on eBay go here.

http://pages.ebay.com/help/buy/proxy-bidding.html

Amazon.com currently offers a feature for their auctions called “Going, Going, Gone.” The Going, Going, Gone” feature extends the end of an auction for 10 minutes if a bid is placed effectively creating a “soft close”. For more information on the “Going, Going, Gone” feature on Amazon go here. http://www.amazon.com/exec/obidos/tg/browse/-/1161360/103-1666189-8415007#going-gone

From the buyers standpoint a “hard close” format is preferable since they may be able to make a final bid before others can react, possibly winning the auction at a lower price.

For sellers, a “soft close” format provides an opportunity to realize the maximum price for an item by removing the time restrictions for an auction. As long as bidders are bidding the auction remains open.

Dutch Auctions

As you may have guessed, the concept of the Dutch auction originates in the Netherlands. Unlike English auctions which utilize ascending price methods, Dutch auctions are descending price auctions and are commonly used when multiples of the same items are to be auctioned. In a Dutch auction the bidding starts at a relatively high price which is driven progressively downward by bids.

As an example of a Dutch auction let’s say you had 10 items you wanted to sell for $20 each.

Bidder A bids $18 for 6 items

Bidder B bids $17 for 5 items

The final result is:

Bidder A would receive 6 items for $17 each

Bidder B would receive 4 items for $17 each

Please note that most Dutch auctions allow bidders to refuse an order for a lesser number of items than what they bid on. A “soft” or “hard close” format may be used in Dutch auctions although the most common is the “hard close”.

First-price Sealed Bid Auctions

Sealed bid auctions differ from the English and Dutch in as much as the bids are not announced to other bidders. The individual bid is only know to the bidder and the seller. This type of auction may be either buyer-bid, where the highest bidder wins the item and pays the amount of their bid, or seller-bid, where the lowest bidder sells the item and is paid the amount of the bid. This form of auction is common for construction contracting, military procurement, foreign exchanges, and other types of goods.

Second-price Sealed Bid Auctions

Another common name for second-price sealed bid auctions is Vickrey auctions (named after William Vickrey) There is a slight variation to the first-price auction for Vickery auctions. In a buyer-bid auction the highest bidder buys the item and pays the amount of the second highest bid. Or in a seller-bid auction, the lowest bidder sells the item and is paid the amount of the second lowest bid.

The above descriptions provide a general overview of the most popular auction types in use today. Depending on the auction website these general categories may include a number of variations and options such as reserve pricing, open or closed venue, multiple items, fixed price and lot listings to mention a few. Before entering any particular type of auctions make sure you study and understand the rules for that specific type of auction, as the rules may vary from website to website.

Copyright © Steven Woodward - All Rights Reserved

Steven Woodward is the owner, editor and publisher of the Auction Sellers Network (ASN); a web site for individuals and companies who are serious about utilizing the online auction marketplace for their business. In addition to topical articles, ASN provides an extensive resource center, news feeds and member forums. For more information, or to become a member, please visit us at http://www.AuctionSellersNetwork.com

No permission is needed to reproduce an unedited copy of this article as long the About the Author tag is left in tact and included. We do request that we be informed of where it is posted and reciprocal links will be considered.

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The internet and world wide web are the wonders of the century, and eBay is one of the marvels to spring from it.

However, like all good things there is a downside, and that is it provides a fertile ground for fraud and deceit.

Fraud on the internet borders on being out of control and about 65% of reported fraud emanates from eBay.

I’ve been a user of eBay, mostly as a buyer but with a small amount of selling experience, for six years and generally my personal experiences have been positive.

But I have had a couple of bad experiences, one serious, and I am a student of the subject of fraud, due to the subject of my web site.

Ebay and it’s sister organization Paypal do a lot passively to assist users, in their tutorials, but I feel they are not pro-active enough.

For one thing eBay downplays the problem and quotes very low percentage figures for fraud. The problem is that the volume on eBay is so immense that one tenth of one percent represents many millions of dollars.

Another factor is that they have provision on their web site for reporting scams but they discourage it’s use. If anyone posts anything too sensitive they are knocked off.

This is somewhat understandable but as a consequence they have encouraged people to publish anti-eBay web sites. They should wake up and “Smell the Coffee”.

They are also encouraging more than normal competition, much of it not as desirable as we’d like it to be.

This problem goes far beyond just eBay it’s affecting all internet business.

Internet business only represents about 4% of the total and should grow at a tremendous rate. The potential is beyond the imagination. There are many advantages to internet marketing and financial advantages are passed on to the consumer.

This constant well published barrage of complaints is inhibiting the growth of buying on the internet. Many of my acquaintances will not buy on the internet because they fear being ripped-off, and they have good reason to be fearful.

This is not meant to denigrate eBay but is meant as a “Heads Up “. eBay certainly has the financial means and the talent to mount an aggressive campaign to control fraud and they should do it and soon.

They don’t even prevent fraud in their own back yard. One example is to do with shipping charges. Many dealers pad their shipping charges to compensate for eBay and Paypal fees, because their profit margins are thin.

But I’ve seen a selling price of 99 cents for a new computer with $420.00 in shipping and handling. This is outright fraud.

I figure if a seller will cheat eBay they’ll certainly cheat me.
I believe lowering their overall fees and assessing them on the total sale would put a stop to this abuse. It would benefit honest sellers as well as buyers. Also in this case if I had to get a refund I would get 99cents back. Give me a break!!!

Written by: George W. Cannata, author and publisher of http://www.caveatemptorus.com
a web site dedicated to informing readers how to avoid fraud and get the most for their money.

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Some online auction sites sell all sorts of items, while others are highly specialized. Some of the larger online auction sites, like eBay, have additional separate auction sites for certain items. One such example is eBay Motors for vehicle auctions. A number of online discount stores, like overstock.com, also have auctions of all kinds of clearance merchandise, from cameras to rugs.

To assess whether an online auction site is reliable, take the time to familiarize yourself with the site and take an auction tutorial if offered. Most reputable auction sites allow bidders to return auctioned items within a specified time period if they are not satisfied. Better auction sites also have readily available customer service. However, even if a site has good business practices, individual sellers may not. Do not do business with an online seller who cannot be contacted, or who offers a better deal via email. Find out what shipping costs may be involved, and how you are expected to pay for them. Before buying an item, always research its quoted value and make sure you are getting your money’s worth.

Signs that a seller is providing full information include a complete description of the item being auctioned, photographs and a willingness to answer any questions a potential bidder may have. Sellers are also susceptible to payment-related fraud, and should always check that a buyer’s payment or escrow service is genuine before agreeing to accept payment through it.

Once you are ready to bid on an item, put in a bid and stick to it. Maintain copies of all correspondence regarding your bid in case there are any disputes later. Payment is usually more secure through an online payment or escrow service; never provide a credit card number to an individual seller. Your local Better Business Bureau can provide information on legitimate payment and escrow services.

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Online auto auctions can save you as much as 50 to 75 percent on the price of a vehicle. While some general auction sites have vehicles listed, other sites specialize in selling vehicles only. While online auctions can save you a lot of money, they are best approached with caution and a better understanding of how they work. While the cost of a vehicle may be low, most auto auctions also charge a buyer’s premium, which can add between five and ten percent to the final price you pay.

Government auto auctions are probably the largest source of vehicles put up for auction. Law enforcement officials may confiscate and sell property, including vehicles, from criminals or people who default on their taxes. Because storage space can be extremely expensive, these seized goods are often sold at ridiculously low prices. Financial institutions may also repossess cars when car owners default on car loan payments.

In recent years, a number of fly-by-night websites purporting to provide links to government auto auctions have sprung up. These sites charge a fee to provide information on the location and timing of upcoming auctions, but often the information provided is obsolete or false. If a site is difficult to navigate and you are unable to speak with a customer service representative, try and avoid it. Most reputable auction sites offer a complete refund and provide customer service.

Some online auction scam operations attempt to sell vehicles that have been salvaged in one state to customers in another state. Many auction houses perform no check, or only a cursory check, on a car’s title. To avoid losing money on an online car auction purchase, it is always a good idea to check that the car’s title or vehicle history report is clean.

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Many a times we find people fail in business and going bankrupt. If we dwell deeper for reasons, we find that the people venture into business without putting together a business plan in place. For any business to succeed it is imperative that we have a good business plan before we launch into it. Over the years the online auction business has taken the world by storm. And to sustain and succeed in the competitive online auction business, we must act in line with the business plan we create for our business.

From my own personal experiences, I tried to put together what it takes to create a business and how should we go about with it, that I’m sharing with you today.

The online auction sites are an excellent to sell a product for a good price. What makes it so different from the conventional stores and malls is you have all the time in the world to surf the listings and more so, the bidding takes place for days not minutes. It is an excellent opportunity for budding entrepreneurs to make a successful business by selling real estate properties to use cars if you have the persistence and the will to do it.

The Fundamental Idea

Basically your primary role is to play an intermediary role of a catalyst helping people buy products of their choice. To get started, you don’t need to stock items for you can start placing drop shipper’s items on auction sites. This concept is by those who don’t wish to stock inventory of products sold for future delivery through mail order, catalogues and Internet Advertising. When you send single unit orders to the manufacturers or major stock distributors, they in turn ship the item directly to the customers found at online auction, benefiting them by savings on advertising and costs to middlemen. This way your stocking inventory risks are minimized with added savings on storage, insurance, overhead and keeping them until sold.

Advantages:

Starting a business with minimum capital. You lose a few dollars in eBay fees if your items don’t sell.

Disadvantages:

The hindrance is no public information on general sales methods and techniques used. Time is essence, you’re required to work all the time to run the business, since this is not a passive income method.

Mistakes to Avoid:

Keep in mind the days when auctions are in full swing, usually on Sunday evenings. A wrong auction expiration time could be fatal.

Give adequate attention to your listings. Provide complete information to the prospective bidders so that they can act fast. Avoid flashy designs and animated texts. They only make customers irritating, resulting in loss of business.

People usually don’t bid on Reserve. Avoid it. Obviously the customers don’t like to receive a message ‘Reserve not yet met’ message.

The fundamental rule for any business is having a Business Plan. The fundamentals must be strong. Have a definite business plan and work accordingly.

Stability is the key. Your business model must be stable. Keeping changing the suppliers and manufacturers otherwise you could get bogged down with a few only.

Pradeep Aggarwal is the creator of Auction Spectrum the online auctions hub. This site is dedicated to helping people start and run a successful online auction business by providing Internet Marketing Tools to build profit making websites.

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Yes, you read that correctly: ten years. eBay was created in September 1995, by a man called Pierre Omidyar, who was living in San Jose. He wanted his site - then called ‘AuctionWeb’ - to be an online marketplace, and wrote the first code for it in one weekend. It was one of the first websites of its kind in the world. The name ‘eBay’ comes from the domain Omidyar used for his site. His company’s name was Echo Bay, and the ‘eBay AuctionWeb’ was originally just one part of Echo Bay’s website at ebay.com. The first thing ever sold on the site was Omidyar’s broken laser pointer, which he got $14 for.

The site quickly became massively popular, as sellers came to list all sorts of odd things and buyers actually bought them. Relying on trust seemed to work remarkably well, and meant that the site could almost be left alone to run itself. The site had been designed from the start to collect a small fee on each sale, and it was this money that Omidyar used to pay for AuctionWeb’s expansion. The fees quickly added up to more than his current salary, and so he decided to quit his job and work on the site full-time. It was at this point, in 1996, that he added the feedback facilities, to let buyers and sellers rate each other and make buying and selling safer.

In 1997, Omidyar changed AuctionWeb’s - and his company’s - name to ‘eBay’, which is what people had been calling the site for a long time. He began to spend a lot of money on advertising, and had the eBay logo designed. It was in this year that the one-millionth item was sold (it was a toy version of Big Bird from Sesame Street).

Then, in 1998 - the peak of the dotcom boom - eBay became big business, and the investment in Internet businesses at the time allowed it to bring in senior managers and business strategists, who took in public on the stock market. It started to encourage people to sell more than just collectibles, and quickly became a massive site where you could sell anything, large or small. Unlike other sites, though, eBay survived the end of the boom, and is still going strong today.

1999 saw eBay go worldwide, launching sites in the UK, Australia and Germany. eBay bought half.com, an Amazon-like online retailer, in the year 2000 - the same year it introduced Buy it Now - and bought PayPal, an online payment service, in 2002.

Pierre Omidyar has now earned an estimated $3 billion from eBay, and still serves as Chairman of the Board. Oddly enough, he keeps a personal weblog at http://pierre.typepad.com. There are now literally millions of items bought and sold every day on eBay, all over the world. For every $100 spent online worldwide, it is estimated that $14 is spent on eBay - that’s a lot of laser pointers.

Now that you know the history of eBay, perhaps you’d like to know how it could work for you? Our next email will give you an idea of the possibilities.

Kirsten Hawkins is an Ebay and internet auction enthusiast from Nashville, TN. Visit www.auctionseller411.com/ for more great tips on how to make the most from Ebay and other online auctions.

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eBay offers sellers the opportunity to instantly connect with millions of customers.

eBay, the giant online auction house, offers the opportunity for sellers and buyers of almost every type of merchandise to connect. Buyers can search eBay for deals on brand name clothing, hard to find collectibles, and rare antiques.

Inside eBay you will find categories, and subcategories, covering thousands of different products.

A browser can easily spend countless hours searching eBay for unique items that match almost every type of interest, no matter how eclectic.

eBay has developed a strong online auction that has enabled thousands of people to set up full time businesses, based exclusively on eBay.

So how can you enter the lucrative market of eBay?

1. Know the eBay market. Before you decide to sell on eBay you want to research what sells and doesn’t sell on eBay. You would be surprised at what sells, and what doesn’t. Remember that people shop on eBay for different reasons than they shop at a local mall.

2. Review eBay product sales. How does your product sell on eBay? When does your product sell for the highest price on eBay? What are buyers on eBay really looking for, when it comes to your product?

3. Frequency of eBay auctions. How many auctions are being finalized on eBay for your product? A high number of finalized auctions on eBay, indicates a high level of interest on eBay for your product.

4. eBay profitability for your product. Are the auctions on eBay ending at a high enough profit to give you a profit? The profit can be low, as long as the volume on eBay makes up for it.

eBay definitely offers plenty of opportunities. eBay businesses can develop six figure sales while avoiding many of the high fixed costs of non eBay businesses.

You can be successful in the eBay marketplace provided that you have fully researched eBay, and you understand what it takes to be successful on eBay.

Donny Lowy operates the following sites,
http://www.closeoutexplosion.com

http://www.wholesalecloseoutforum.com

http://www.wholesalequest.com

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Online Auctions are often called the “Entrepreneurs Dream’, because it is the easiest and the cheapest way to make money. And who doesn’t want to make money and grow rich? The online auction giant eBay has more than a million hits a year. And these are targeted customers. Unlike the regular auctions, in online auctions the customers are already there and they will come to you provide you go about it the right way. So how do you build your ezine subscription list with online auctions? Here are a few hints-

1. Decide who your targeted customers for your ezine are. For example if you are selling herbal health products, then customers who are interested in computers wont be looking at your site.
2. Choose the correct category for your products. To get an idea how to do this you can visit one the online auction sites. For example if you are selling leather belts, you can list it under apparel and accessories. Again, you have to list if it is for men or women.
3. Then you have to offer your item to the customers. To do this successfully you have to describe your product in a very positive and seductive way? How do you do this? List out the different colors of leather belts available, different sizes of belts. Offering a guarantee is also a sure way to make people know that you are genuine. You can also use positive feed back for previous customers who have bought the product from you.
4. A picture speaks a thousand words. So make sure you have good photographs of the product, so that customers can have n idea of the product that they are going to get.
5. Make sure that your product is listed with a very attractive headline. As the space for headlines is small in online auctions you have to express a lot with very few words.
6. Work in references and links throughout your sales copy to your ezine. Mention your ezine many times throughout your online auction site. Put your listing on some of the biggest online auction sites on the Internet. Some of the big online auction sites charge for a listing but it is free on smaller online auction sites.

Some of the online auction sites are listed below
http://auctions.amazon.com
http://auctions.cnet.com
http://auctions.lycos.com
http://auctions.msn.com
http://auctions.yahoo.com
http://www.ebay.com

Once your ad is put up then it is time for you to put up your feet and relax. Your ad will create a steady stream of subscribers for your ezine.

Pradeep Aggarwal is an Internet Entrepreneur and a leading Online Business consultant, He has conducted many workshops and seminars across the world empowering people on How to start money-making Home Based Business. He also provides niche Website Promotion Tools for internet marketing timings.

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If you are an eBay store seller you can access additional listing format known as Store Inventory format. You can use this format to complement and extend your eBay listings beyond the ‘online auction’ or ‘fixed price’ formats. Though Store Inventory listings have a longer duration and lower Insertion Fees, they have limited visibility compared to the Online Auction and Fixed Price formats.

Anyhow, to save on time you have the option to edit multiple Store Inventory listings instantly. For instance if you intend to change the ‘Buy It Now price’ or any other feature, you simply have to follow a few steps. Click on the drop-down menu and select ’store inventory’ of ‘items I am selling’ view of My eBay. Click on the link ‘Go’. Here only your Store Inventory listings will be shown in the list. If you are using Selling Manager Pro then you can go to the Active Listings view and click the ’show store item’ button. Next, select the listings you want to edit by clicking the checkbox besides each listing. Now click on the ‘edit item’ at the top of the view. Edit item page will now be opened where you can edit fields for each of the listings as required and then click the ’submit’ button. Instantly your desired changes will take place.

If you want to make changes for bulk listings, you have to choose the same conditions for each item before sending. For instance, this editing will not work if some items are ‘new’ and ‘refurbished’ whereas a few are simply “new”. If your items are in the same category, same condition option is fulfilled and your work of editing bulk listings becomes easier.

Donny Lowy runs http://www.closeoutexplosion.com an online wholesale and closeout business that supplies eBay sellers, retailers, and flea market vendors.

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Even if your investigation of eBook selling has just started, you are probably already knowledgeable about some of the basics. You have learned that there is a growing demand for information on a variety of topics and that eBooks are a great way to provide that information. There is, you have been told, a demand for eBooks.

What you might not yet know is that there are basically two groups of consumers who have an interest in eBooks. Deciding on the group you want to market will have a profound effect on your eBook business.

The first group is the one most of us initially thought of when the idea of eBook sales was first introduced to us. These are the people who have an interest in specific information, products, hobbies or other matters. Dog fans, for instance, may have an interest in an eBook on dog training. Fans of a best-selling author will have an interest in purchasing that writer’s eBooks. We can refer to this as the consumer market.

The consumer market is a rapidly growing segment for eBook sales. As people become more and more acquainted with nontraditional methods of information delivery and grow increasingly comfortable with technology, the eBook will continue to grow in popularity. If you have the right titles, put them in front of the right consumers, and offer the right prices you can generate impressive sales numbers with eBooks.

There is, however, a second market. That market is composed of people just like you–those who are interested in pursuing eBook sales as a means of generating income. You probably have less of an interest in what an eBook is about. Your concern, instead, is wisely placed on your ability to obtain resell rights and then to sell the book profitably.

As a member of this market, you are probably keenly aware of what is being pitched to it! People are offering you the rights to large bundles of eBooks inexpensively, maintaining that you can sell them separately again and again to generate huge profits. Others are offering you a single eBook at a very high price, arguing that it is a quality product with a huge potential readership that warrants your attention.

These two market segments, in essence, point someone who is considering eBook sales in one of two directions. Either they can focus attentions on finding books for end-users or they can concentrate on making sales to those who will eventually move the books on to end-users. For all of the technological and strategic advances of online enterprise, it seems the online eBook world mimics the traditional brick and mortar world in that one is usually either a retailer or a wholesaler. Of course, it is possible to perform both functions, but one will naturally tend to gravitate toward one option as a byproduct of the inevitable efficiency of specialization.

The approach one chooses toward the eBook marketplace will dictate which direction suits them best. Whether as a retailer or a wholesaler, there is great potential in selling eBooks online (particularly via eBay).

John Thornhill is an eBay powerseller who trades on eBay under the username planetsms. For more advice on how to succeed on eBay with information products visit http://www.planetsms.co.uk

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