Online Auctions: eBay and Beyond: Exploring Popular Sites - Essay Sample

Introduction

Online auction sites are unique in their auctions, feel, and look. Such differences are the contributing factors to the size of traffic to each site and the behavioral patterns of customers during the auction. The sites contain goods that vary in quality, type, and quantity. Some of the popular sites include ebay.com, liquidation.com, and ubid.com. eBay is statistically proven to be the most popular online auction site. It has transformed from being an online auction giant to an online retailer. All the websites apply economic principles to ensure they increase the amount of their annual retail sales. Through these sites, consumers can get information and place bids on various items anytime. This analysis compares and contrasts multiple online auction sites, including liquidation.com, ubid.com, and ebay.com.

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Ebay.com, liquidation.com, and ubid.com are the top three internet auction websites. Their similarity is derived from the fact that they are online platforms where goods and services can be sold (Liu et al., 2010). The sites are the most popular because they are easy to use. They use technology to attract potential bidders across the globe to bid on goods that are in demand.

Similarities of the Online Auction Sites

Currently, most of the existing sites are web-based. For instance, the three websites (ebay.com, liquidation.com, and ubid.com) allow for the exchange of goods between parties without an actual retail operation. E-commerce and internet auction generates revenue of 280 billion dollars annually, and so there is the need to ensure safety from various malpractices, including fraud for buyers (Liu et al., 2010). Besides, there are millions of transactions occurring on these sites.

The transactions are correlated to the demand of the goods and the ability of the market to cater to the demand by providing the necessary supply. eBay is the largest auction site, with over 150 million users. UBID has over five million users, and Liquidation.com has one million users. All three platforms use "English auction," which is an open auction structure whereby the opening bid is publicly posted as the beginning of the auction (Liu et al., 2010). The following event is the "end of the auction," which is as well posted on the item page. During the auctioning time, any registered website and user is allowed to place a bid.

The online auction comprises of different bidders. For instance, in all the three websites, some retailers are motivated to bid by the profit from the transactions. Such retailers often use the pricing strategy that suits the margins that they intend to obtain after getting the items and reselling them online (Ow et al., 2018). Some non-retail bidders apply different approaches during the auction. These bidders always look for a single item to fulfill a need or a want. The pace of auction influences their behaviors in online auction sites. Finally, there are state bidders who are more involved with the sale during the late stages. Bidder survey affirms that eBay has the highest percentage of late bidders (Ow et al., 2018). It is as well shown that late bidding is an approach used to avoid a bidding war. The consumer behavior in these platforms is influenced by sequential-move game theory that requires a close observation while placing bids. However, the online auction process has been improved by technological advances.

Today, the internet allows action platforms to execute real-time bids and actions (Ow et al., 2018). Therefore, there is an improved speed of communication bids as opposed to earlier days when there was a noticeable delay of around four seconds in every bid. Further, there is improved web services that all the websites are benefiting from today. These improvements have enhanced the customers' experience as the auction has been made efficient.

Structure of Online Market Place

The online auction market comprises of a few dominant websites. eBay is the largest by far, attracts a significant market share. Its market capitalization is 79.7 billion dollars as compared to that of liquidation.com, which is 291 million dollars. The online auction sector has a high entry barrier due to the dominant position of the existing websites. For example, the only competition eBay experience is from e-retail based online sites such as Amazon.com, which currently do not conduct auction (Abdul-Ghani et al., 2011).

The online auction sector comprises of a few sites who enjoy monopolistic power. For instance, eBay has over 150 million users, while its nearest competitor barely has 5 million subscribers. Therefore, eBay enjoys a monopoly in online auctions. Nonetheless, some of its actions have been condemned by other online site has they seems unfair. There was a time eBay was sued for antitrust conditions as they had higher listing fees. The website stated that the plaintiffs as well applied many ways to buy, sell, and pay for goods (Abdul-Ghani et al., 2011). They as well said that high listing fees enable fewer bids on competitive products to be placed, and as a result, there are higher average prices. Over the years, eBay has continuously raised the prices without experiencing any significant financial setback. Such a state proves that it can control the costs in the online auction market.

Internet auction sites have a common strategy that allows them to offer different goods at a desirable discount to shoppers. The discounted products are often purchased by small sellers who intend to acquire products for large audiences without disclosing their national presence. Such a state has enabled the websites to create a niche of consumers who goes to the specific sites for a particular reason that is influenced by the products and services offered by the site (Abdul-Ghani et al., 2011). Therefore, product differentiation of the websites makes their operations unique and attractive to different customers.

Differences in Online Auction Sites

Online auction websites have a few niches that can be associated with specific platforms. For example, liquidation.com is unique through its selling approach. The sellers in the site are allowed to sell surplus inventory in bulk lots. A comparison of how this site works and eBay shows that the two have different buying rules. Buying in liquidation.com is only allowed if the buyer is purchasing in lots or rather more than one of the said items (Gregg & Walczak, 2010). On the other hand, eBay allows single purchasing of most of its items. Both approaches used by the two sites have their advantages and disadvantages. In liquidation.com, buying in bulk is beneficial to those intending to resell goods as they are likely to receive massive discounts. Such difference shows that liquidation.com can bid on large quantities of items, while the other sites, including UBID and eBay, are more concerned with individual consumer and buyer actions. The internet auction sites trade in different markets. The items on eBay include motorcycles, boats, cars, among other locomotives. UBID, on the other hand, does not mostly trade-in locomotives.

UBID has a niche for currency and collector coins (Adomavicius et al., 2015). eBay faces indirect competition from Amazon.com; however, the competition would have been different if Amazon had not shifted to online retail. Online retail is more lucrative and easy to manage as compared to the online auction. Therefore, Amazon's shift was the right thing to do to avoid competition in the online auction sector. Online retail offers fixed-price listing, thus attracting more shoppers. Nonetheless, eBay has modified its operations to suit its customer base. For instance, it has struck deals with various Web retailers, including Buy.com. The agreement with By.com was appropriate for the company (Adomavicius et al., 2015). The company was to sell millions of electronics, DVDs, books, and other items on eBay at a desirable discount. Such deals have been lucrative and have enabled eBay to remain competitive in the auction sector.

Conclusion

In conclusion, online auction websites can create a forum for easy auction that attracts willing bidders. Through this, they can generate revenue for themselves and as well generate income for their clients. The sites must observe customer satisfaction since customer retention is crucial. eBay, Liquidation, and UBID are the top online auction sites. They have various similarities and differences. For instance, they both provide an online place for ordinary items to be bought and sold. The sites rely on technology that attracts potential bidders from across the globe to transact. With the growth of the global market and e-commerce, there is a need for web-based platforms to facilitate easy transactions and enable people from different places to transact in a secure environment. Besides, it enables organizations to come into contact with potential clients. As a result, they are able to generate more revenue. Internet auction is a major way of attracting bidders without relying on physical strictures.

References

Abdul-Ghani, E., Hyde, K. F., & Marshall, R. (2011). Emic and etic interpretations of engagement with a consumer-to-consumer online auction site. Journal of Business Research, 64(10), 1060-1066.

Adomavicius, G., Gupta, A., Sheffler, Z., & Yang, M. (2015). Computational Strategies for Inventory Liquidation. Available at SSRN 2883863.

Gregg, D. G., & Walczak, S. (2010). The relationship between website quality, trust and price premiums at online auctions. Electronic Commerce Research, 10(1), 1-25.

Liu, C. T., Guo, Y. M., & Hsieh, T. Y. (2010). Measuring user perceived service quality of online auction sites. The Service Industries Journal, 30(7), 1177-1197.

Ow, T. T., Spaid, B. I., Wood, C. A., & Ba, S. (2018). Trust and experience in online auctions. Journal of Organizational Computing and Electronic Commerce, 28(4), 294-314.