Online auctions are becoming a new and popular means of electronic commerce in the computer age. While there are advantages to both selling and buying in the online auction format, there are also certain pitfalls to be noted, from uncertainty about what you may be buying to problems with sites that crash or otherwise encounter problems from time to time.
The typical sales method for such sites is to have the site display items with a description, minimum bid, and final date for all bids. If a user accesses the site and wishes to bid, he or she sends e mail to the seller, or submits an electronic bid form declaring the price he or she is willing to pay. The bidder will soon receive a reply from the seller confirming the bid. A few sites hold live auctions where bidders compete in real time with other people on the Internet and at the actual auction house as each item goes under the hammer at the same time. Some sites give potential bidders a registration number, and others require bidders to preregister by providing name, postal and e mail addresses, and sometimes a credit card number. Different sites also use different formats for their auctions. Normally, the minimum bid or current high bid will be posted at the site, and the bidder may top it if he or she wishes. Once the auction closes, the person with the highest bid gets the item, and if two people bid the same amount, the item goes to the person who bid first (Tamosaitis 141).
One of the better known online auction houses is EBay, with a web site established in 1995 to facilitate sales from consumers to consumers. EBay makes money through posting fees and sales commissions, and the company does not touch the merchandise or get involved with how money changes hands between buyer and seller at all. An analyst at Goldman, Sachs & Co. in New York, praises EBay's approach to online sales as "the most profitable commerce model out there" with a stock that has room to...