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Category: Computers & Technology : Internet and Websites
In the 60s the places to find collectibles and unusual items were flea markets. With the convergence of e-commerce and other technologies, the 90s gave us a new flavor of flea markets -- Internet auction sites. The popularity of flea markets was and still, is due to the obsession people have with collecting the most obscure things and the age-old saying "that one man's junk is another man's treasure."
But, If you thought flea markets had those "hard to find items" and collectibles, you‚ll be astonished by the variety of items being sold on Internet auction sites. At one site, someone was selling a 1970 Elvis jumpsuit for a mere $195.00. The seller says it's an "original" -- one that "The King" actually wore on his way from the limo to the stage door. Another site was hawking a 1985 sample display Superbowl ring for $2,500 supposedly made for William "The Refrigerator" Perry. It was one big ring -- size 23 and it looked gaudy enough to be the real thing. The problem with Internet auction sites is two fold: how do you know if the product being sold is authentic and how do you know the person selling it is honest and on the up an up. The answer is: you don't.
Flea markets are not just an American thing -- there are flea markets everywhere -- although folks in other countries may not call them flea markets. But Americans know a flea market when they see one. The good thing about flea market commerce is no one thinks that fraud or other illegal activities are a part of their fabric and there hasn't been any news about the government or watchdog groups overseeing the activities, which take place at flea markets. Unfortunately, Internet auction sites are not receiving the same "leave well enough alone" attitude by either the government or watchdog groups.
Fraud And Illegal Activity On Auction Sites
Since the birth of Internet auction sites, there have been mounting problems with fraud and illegal activity. In February 1999, a Florida man took orders for computer equipment on two Internet auction sites -- but never delivered the goods. The U.S. District Court of Southern Florida sentenced the man to six months of home detention and three months of probation. This may have something to do with the actual look and feel of an Internet auction site as well as web sites in general as there seems to be a certain amount of credibility associated with a web site. In other words, people think that because goods or services are being sold over a web site, it must be legitimate. Nothing could be further from the truth. And, unlike your neighborhood flea market, some of the Internet auction sites are selling things like pornography and firearms. This becomes a legal issue with the government and a moral issue with watchdog groups. For example: The person selling firearms may indeed have a license to sell firearms and he may in fact be a legitimate business person but how does he know that the person buying the firearm has a permit to own a gun? He doesn't. In addition some of the Internet auction sites were reported to be selling the Anarchist's Cookbook, brass knuckles, drug paraphernalia and UZI machine guns! This is not to say that Internet auction sites cannot be bargain bonanzas --- because they can and for just about anything under the sun. But sometimes bargain bonzanas are accompanied by bonanza drawbacks.
Software companies have also joined the monitoring effort of Internet auction sites. Microsoft said it was cracking down on software pirates using Internet auction sites to sell illegal software. Last year, Microsoft launched a monitoring program designed to "sniff-out" the pirates. And, to further the effort in keeping these Internet auction sites legitimate, eBay, one of the largest Internet auction sites, launched a program designed to assist software companies and other firms ensure that "pirated" goods are not being sold at its auction site. Other Internet auction sites have implemented similar measures.
In one of President Bill Clinton's speeches concerning the growth of the Internet he said, "We must give consumers the same protection in our virtual malls as they now get at shopping malls" -- he was probably referring to Internet auction sites.
The Baskin Robbins of Auction Sites
There are many flavors of Internet auction sites. Some are person-to-person sites, which boils down to a cyberspace classified ad. Others are merchant auctions where a business puts up products for sale for a limited amount of time and then there are the business-to business auctions, which are not usually open to the general public.
Merchant auctions are run similar to a retail store, except the buyer sets the price. They take credit cards, take back defective merchandise and even offer customer service. Most of the items being sold at merchant auctions are either new or refurbished by the manufacturer.
Person-to-person auction sites are similar to buying something through a newspaper ad. The buyer is usually dealing with an individual and the merchandise may be used. Buyers participating in person-to-person auctions should research the seller's credentials. Many of the Internet auction sites make this process pretty easy by providing buyers with an area where they can make comments and rate the buyers. It is up to the buyer and seller to work out the payment terms. And, keep in mind these types of auctions don't always accept credit cards.
Business-to-business auction sites are nothing more than a place for manufacturers and distributors to get rid of excess inventories -- to other businesses.
What is needed to make a consumer-to-consumer auction site work is a lot of repeat buyers and sellers. Ebay, an Internet auction site, has been very successful in getting repeat buyers. One of the reasons for its success is that it publishes comments from buyers right on its site. So, if a seller is a bit unscrupulous -- he probably won't be selling things for long on eBay.
CityAuction, another Internet auction site, does something very similar on its site. It not only publishes the comments but it identifies the specific auction that inspired the comments. Again, a seller who may be hawking pirated goods or selling something that isn't quite what he says it is isn't going to last long at the CityAuction either.
Another popular auction site is Yahoo, which is getting quite a name for itself in the Internet auction business. The main reason is that both eBay and CityAuction charge the seller a commission (between 25 cents and $2 ) and Yahoo does not. Besides, Yahoo has the advantage of marketing its Internet auction site to literally millions and millions of people from its home page. Although eBay has formed a partnership with AOL, which can feed it lots of business -- eBay is only a link from AOL and not the whole enchilada like Yahoo. Other partnerships include and Snap, Classified2000 and Excite and Onsale and Yahoo.
Ebay.com is the most popular of the Internet auction sites and offers over 100,000 items for sale .The California based company also went public last September and in January of 1999 its shares were up 1,500 percent. A Frenchman named Pierre Omidyar who posted an ad on the Internet for his wife because she collected Pez candy dispensers founded the company. Realizing that he had literally walked right into a gold mine, the rest is history. Ebay had sales of $200 million in 1998. Experts agree that a lot of its popularity has to do with the fact that before a deal is concluded buyers and sellers often exchange e-mail about the products and both buyers and sellers can rate the traders they interact with on the site. However, with all the glory, eBay has also had its share of negative comments. At one time it came under fire for allowing items such as hollow-point ammunition and switchblade knives (to name a few) to go up for auction on its site. And in January of 1999 the Internet auction site announced that the federal government was investigating its site for potentially illegal transactions. The company issued a statement on January 29, 1999 which said: "On January 29, 1999, the company received requests to produce certain records and information to the federal government relating to an investigation of possible illegal transactions in connection with the company's site." However, two weeks prior to January 29th, eBay instituted a new system of anti-fraud rules in an attempt to cut down on illegal activities on its site.
Onsale.com is an Internet auction site specializing in computer and electronic equipment. In 1998 a report by Keenan Vision, Inc, retail analysts based in San Francisco, stated that Onsale did over $100 million in business in two years of operation. Not a bad chunk of change considering it took Butterfield and Butterfield (a non-Internet based auction company) 100 years to do the same amount of business.
Bid.com is a unique Internet auction site because it offers its customers the Dutch auction. A Dutch auction is when a seller auctions multiple quantities of the same item and sets a minimum bid price. Buyers can then specify how many of the items they want and the price, which they are willing to spend. When the auction closes, the goods are sold to the highest bidders, in terms of quantity and price, at the lowest price. Because Bid.com is located in Toronto, Canada it actually operates two separate auctions for Canadians and Americans due to the constant fluctuation of the exchange rate.
Going-going-sold.com is a unique Internet auction site because it has put itself into a "niche" market by selling used laboratory equipment. So, if you are in the market for a microscop, this is this auction site for you. Although its targeted market is somewhat specialized, it actually makes a lot of sense. Laboratory equipment (like computers) becomes outdated quickly, but is very expensive to replace. And, since not all buyers need the latest equipment, this is a good place to get needed equipment at a reasonable price.
Priceline.com is the frequent flyer's Internet auction site. It specializes in airline tickets and hotel rooms. According to the folks at Priceline, over 1,000 airline tickets and rooms are sold every day. The flavor of Priceline is "name your own price" as it allows would-be buyers the opportunity to name the highest price they are willing to spend for airline tickets, then it checks whether major airlines will sell a seat at that price.
Bidder's Edge is the shopper's shopper. The company has a partnership with Lycos, but Bidder's Edge, Inc. is responsible for the technology behind the site as well as the databases. Bidder's Edge provides buying tools for people shopping at Internet auction sites. It allows shoppers to search its database for products and pricing information. As e-commerce grows, companies like Bidder's Edge are becoming popular because they empower the consumer by simplifying the auction process and hopefully giving the consumer "the bidder's edge." Bidder's Edge does not provide any of a buyer's personal information to anyone without authorization from the buyer.
BidFind -- another shopper's shopper -- will search Internet auction sites for a specific item. Buyer's using this service can quickly determine if the item they want to purchase is available and who's listing it.
Show Me the Money And Proof Of Age
No everyone can participate in auctions. Most Internet auction sites require registration and it is usually only open to those 18 and older. Internet auction sites are not supposed to allow the sale of certain goods and services including illegal drugs, pornography, stolen merchandise and live animals. In addition, there has recently been an ongoing effort to eliminate the sale of goods, which infringe on copyright laws including pirated software and bootleg CDs, VCR tapes, etc.
Internet auction sites take advantage of the beauty of cyberspace -- the opportunity to browse at a person's leisure any time of the day or night without being irritated by a salesperson or an auctioneer. Other advantages include convenience and price; after all it wouldn't be proper if you showed up at the Sotheby's auction in your jammies!
Auction does not mean good deal and Internet auction sites do not guarantee that the buyer is getting a good deal. Nor, do they guarantee that the buyer could not get the same item at the local mall for the same price or less. Buyers participating in Internet auction sites should get into the habit of reading the fine print as they may be surprised to see words like "refurbished," "close-out," or "discontinued." In addition, calculating the shipping and handling is also a major consideration as it may be cheaper to drive to the mall and buy the product there.
Online Shopping As A Past Time
Internet auction sites are not going away as they are really nothing more than what people have come to expect when it comes to shopping: 24 hour a day, seven days a week availability. The 24-hour television shopping networks have not been on TV this long because no one is buying anything. This 90s phenomenon of Internet auction sites is even spilling over to retailers. Sharper Image, which sells high priced gadgets through a catalog and several retail stores, added an auction to its web site to increase traffic. It is auctioning off its own merchandise. This type of Internet auction site will add another flavor to this growing business. Egghead Computer stores, which also have a web site, are associated with the Surplus Auction while MicroWarehouse, a seller of computer products, is affiliated with the WebAuction.
Psychology and Online Shopping
For most cyberspace shoppers, Internet auction sites are just another place to buy collectibles or unusual items, however some experts are concerned that these sites can evoke a high that could lead to financial and psychological despair. That's right -- addicted to Internet auction sites. In the book "Psychology and the Internet: Intrapersonal and Transpersonal Implications," psychologist Mark
Griffiths says visitors to Internet auction sites will know they are addicted if:
The activity becomes the most important part of their life
The user experiences some type of "high" from the activity
The user needs increasing amounts of the same activity to achieve that high
The user experiences withdraw symptoms such as irritability
Apparently this is not something to sneer about as in 1996, the Computer Addiction Services was formed at McLean Hospital in Massachusetts.
Groups such as the National Consumers League are lobbying for more government action in association with e-commerce, but are somewhat hesitant. As even though the organization feels that there needs to be rules for Internet commerce, as there are for telemarketing and other types of commerce, they don't know if that means new rules. In addition, many groups are hoping that the Internet auction sites take on this responsibility before the government steps in and starts making rules.
Before purchasing an item from an Internet auction site, do your homework and find out how the site works. Take the time to learn what to check for, how to find and read the "fine" print and when to get out while the getting is good.
Web Links
http://www.priceline.com
http://www.eBay.com
http://www.onsale.com
http://www.going-going-sold.com
http://www.auctionwatch.com
http://www.bid.com
http://www.auctionguide.com
http://www.auctionInsider.com
http://www.cityauction.com
Leslie C. Wood is a freelance writer based in Philadelphia, PA. Her articles have been published in national magazines and
newspapers as well as on many web sites. For more information, visit her web site at http://writer4u.com
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