Auctions have been taking place since around the early fifth century - this practice has continued into modern times and, in recent years, has been adapted to the internet to become what is known as online auctioning.
This concept has taken the online world by storm - by 2006 online auctions are expected to generate an estimated $48.5 billion in sales (Guerrilla Retail, 2003). The industry is growing at a remarkable rate and provides consumers and businesses with new and innovative ways to buy and sell obscure or highly specialised products which were previously inaccessible through traditional marketing methods.
Online auctioning is used in a variety of business relationships, more traditionally in the consumer to consumer (C2C) and business to consumer (B2C) markets. More recently, this area has expanded to include B2B, or business to business - a highly lucrative sector of the market. These relationships are discussed later in this document.
In the context of online auctions, the word "seller" does not necessarily refer to an individual - these terms encompass a wide range of participants ranging from large multi-national corporations to SME's (small-medium enterprises) right through to a single person selling home-made goods from their own residence. Likewise, a buyer can be any of the above entities.
As with any new and innovative concept, there are pros and cons that need to be considered by both buyers and sellers before participating in online auctions. Although convenient, there is an element of risk involved in participating in such auctions. This essay discusses and evaluates the positive and negative aspects of online auctioning for consumers and businesses alike with a view to answering the question - why online auctions?
There are a number of different types of online auctions - the most common of these is the 'english' auction as...