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Auctions in Business

Basic Information

Auctions are a specific kind of market places for the exchange of goods or services. They have been well-known in history for a long time: In ancient Rome already, this type of business was hold in a particular location called “atrium auctionarium”1). Generally speaking auctions are understood as a form of business platform where goods or services are being sold to the highest bidder2).

Auctions on the Internet

Within physical sales, auctions seem to be a rather small and very exclusive part of business – just recently, the auctioning of Edvard Munch’s painting The Scream has attracted widespread public attention3). However, it is rather internet auctions which have become extremely prominent in recent years. Within the framework of e-business internet auctions represent a customer to customer (C2C) model, i. e. sellers are directly linked to customers4). Likewise traditional auctions, an internet auction begins with a start price and within a certain time slot interested customers can place their bids. The one with the highest bid at the end of the auction wins the auction5). Together with search engines, online shops, price services and maps, internet auctions belong to the most popular internet services platforms in the world wide web6). This is underlined by the fact that for example in Germany, 55 percent of all internet users actively use internet auctions7).

The no. 1 - eBay

eBay is the leading and best-known internet auction house today with at least 200 million registered users8). In Germany, it is the online shop with the highest number of visitors. In 2011, more than 22 million visitors attended the website9). eBay is an American company that was founded by Mr Pierre Omidyar in 1995. Legends say that his wife was a passionate collector of candy dispensers and had been looking for a way to exchange them with oth-ers. She came up with the idea of using the internet. Shortly after setting up the company eBay also entered the German market, buying Alando, the first German auction platform 10).

Is there only eBay?

According to German Institute for Service Quality there is a large number of internet auction houses in Germany11). Besides eBay there is for example hood.de, atrada.de, auxion.de, Feininger.de and others. However, they have much less members than the market leader. Therefore they are struggling hard to find a specific niche or special services in order to survive on the market.

Other forms of internet auctions

Apart from internet auctions like eBay there are other forms of auctions. One is the concept of backward auctions. This means that in the auctioning process a certain starting price is set and after time intervals the price is falling. The first bidder wins the auction. Moreover, there are service auctions like Myhammer, Quotatis or Jobdoo, which do not focus on products or goods but rather on services like providing craftsmen for example12).

Opportunities and Threats

As in every kind of business, there can be opportunities as well as threats when we consider e-business and internet auctions in particular. In general, a positive outlook is the fact that sales in e-business have been rising steadily in the last couple of years13). So it seems that positive aspects of e-business and its applications like internet auctions outweigh possible threats or risks. However, some problems have to be taken into account seriously: The misuse of personal data and the security of payment methods14).

Daniel Schlier 2012/05/07 21:56Daniel Schlier 2012/05/08 22:02

1) Mai, Carsten (no date available). Die Geschichte der Auktionen. Retrieved May 6, 2012 from http://www.auktionsecke.de/a_historie_themeneins.shtml
2) Meyers Großes Handlexikon (1985). Versteigerungen. Mannheim: Bibliographisches Institut
3) BBC (2012). BBC News. Retrieved May 6, 2012 from http://www.bbc.co.uk/news/entertainment-arts-17926519
4) Olschimke, Michael (2012). Information Systems Management. Steinbeis MBA, Lecture Script
5) , 12) Rohrlich, Michael (2007). Ihr gutes Recht beim Online-Kauf. Düsseldorf, Data BEcker
6) , 14) Fittkau & Maaß Consulting GmbH (2010). Trends im E-Commerce. Chartsammlung zum W3B-Report. 31. WWW-Benutzer-Analyse W3B. Studienmaterial
7) Bundesverband Digitale Wirtschaft (BVDW) e.V. (2011). Digital Insights - E-Commerce. Studienmaterial
8) , 10) Schieb, Jörg; Brunsmann, Jörg (2007), Der Online-Marktplatz. Berlin: Stiftung Warentest
9) Nielsen Media Research (2011). Besucherzahlen der größten Online-Shops in Deutschland im Januar 2011. Retrieved May 6, 2012 from http://de.statista.com/statistik/daten/studie/158229/umfrage/online-shops-in-deutschland-nach-besucherzahlen/
11) Deutsches Institut für Service-Qualität GmbH (2009). Dokumentation Bestes Internetauktionshaus 2009. Studienmaterial
13) Goldman Sachs (2011), Prognose des E-Commerce Umsatzes nach Weltregio-nen im Jahr 2010 und 2013. Retrieved May 6, 2012 from http://de.statista.com/statistik/daten/studie/187663/umfrage/e-commerce-umsatz-weltweit/
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fundamentals/market_places/auctions2.txt · Last modified: 2012/05/08 20:03 (external edit)