Running head: ECOMMERCEeCommerceThe Popularity of Online AuctionsAbstractThe Popularity of Online Auctions The opportunity to shop from the comfort of ones own home has seen a change like never seen before. Within the span of a few short years, what may have began as an experimental idea has grown to an immensely popular hobby, and in some cases, a means of livelihood, the online auction gathers tremendous response everyday, all day. With the point and click of the mouse, one may bid on an item they may need or just want, and in moments they find that either they are the top bidder or someone else wants it more, and you " re outbid! The excitement of an auction all from the comfort of home. With this opportunity to buy sight unseen also comes the opportunity to be scammed sight unseen as well.
There are over 30 million 'hits' each month on the online auction sites, and that is opportunity waiting to be taken for those with the criminal intent of defrauding others. However with a little care and caution, one can have a positive experience doing business on an online auction, and each party can leave satisfied with their 'deal', whether they are the buyer, the seller, or the conveyance that brought it all together. eCommerce The Popularity of Online Auctions " Congratulations! This e Bay item has successfully ended." (e Bay, retrieved 11 April 2002, Sellers Guide, web) Many people each day receive this message in their e-mail box, notifying them that they have won the bid on an item listed with e Bay^a, for sale to the highest bidder. In fact, online auctions have become so popular, they are gathering multi-billion dollar per year business. Top auction sites, January 2002 Site Unique visitors Site Unique visitors eBay 28.
9 million My item. com 860, 000 Yahoo! Auctions 3. 7 million Bid. com 612, 000 u Bid.
com 3. 1 million BuyBidWin. com 487, 000 Andale sites 2. 2 million PhilTanny.
com 279, 000 Q OOL. com 977, 000 Sky Auction. com 262, 000 All auctions 32. 3 million Note: Usage numbers for individual sites exceed total because duplicate users, those visiting more than one site, have been eliminated. The total does not include Amazon.
com Auctions. Source: Jupiter Media Metrix (Mulrean, J. , 5 steps to avoiding auction rip-offs, retrieved 12 April 2002 from MSN Money, web ground for fraud. ) In 2000, the e Bay community transacted more than $5 billion in annualized gross merchandise sales (value of goods traded on the e Bay site). (e Bay, retrieved 11 April 2002, Company Overview, web), and for all of 2001, EBay generated revenue of US$748.
8 million, representing a 74 percent annual growth. That is serious money by anyone's standards. 'EBay has been profitable nearly since Day One,' Morningstar analyst David Kathman told the E-Commerce Times. 'It has stayed profitable while expanding margins and maintaining growth." Vigoroso, M. , (2002) And the E-Commerce Gold Medal Goes to... retrieved 11 April 2002, from News Factor"a Network site: web was founded in 1995, and has become a major force in the "online goods and services" marketplace.
They are the world's largest online marketplace by their own definition, and with 42. 2 million registered users, as measured by Media Metrix, it is not difficult to believe that this is true. (e Bay, retrieved 11 April 2002, Company Overview, from web), EBay began with a mission to try to help "practically anyone trade practically anything on earth." (e Bay, retrieved 11 April 2002, Company Overview, web) As evidence of the success of this mission, there are millions of items listed each day in thousands of different categories. There are items for almost any interest that one could imagine, from sheet music to automobiles to hand tools to real estate. And the variety doesn't stop there. Need a computer? One may find it listed in the proper category, in any configuration from very old and obsolete to the latest greatest machine available.
What about antiques? One can find an antique quilt that is up for highest bid, or maybe an old violin, whose beautiful tones have enchanted many though its years. Tickets. Maybe a ticket to the next concert of ones favorite artist or play production. One can even find that special bottle of wine, some aged, exotic cheese, and the perfect 'mood' music for that special occasion. In this instance it may be true that on e Bay, they have something for everybody, whatever their tastes may be.
Reliability For a business of this nature, the need to be available is all-important. After all, when the only means of access is via 'online', it is of utmost importance to have and maintain an accessible web presence. 'By the nature of the business, keeping its site up and running 24/7 is more important to e Bay than it is to, say, Amazon,' Morningstar. com analyst David Kathman told the E-Commerce Times. 'If e Bay's site goes down, it disrupts a lot of auctions, which have to be rescheduled or cancelled.' However, for the past year, there has been significant reduction in the sites downtime. 'EBay has boasted recently of 99.
9 percent up time, which is pretty good when you consider that they generate 300 million page views a day,' said Kathman. In added attempts to assure even more reliability, auction giant e Bay (Nasdaq: EBAY) has tapped a division of tech titan Intel (Nasdaq: INTC) to provide additional hosting services. 'The arrangement with Intel will complement e Bay's existing hosting facilities,' Pursglove said. 'This means there [are] now additional and diversified hosting capabilities, ensuring e Bay users of continued site access.' (Regan, K. , (2002) "EBay Turns to Intel To Beef Up Web Hosting" retrieved 11 April 2002, from News Factor"a Network site: web). Fraud Society cannot seem to escape the criminal element in the physical world, and so it is the same with online auctions.
For the fourth straight year, online auctions topped the Internet Fraud Watch's list of Top 10 Net scams in 2001. The average loss? A not-so-insignificant $478. Of course, you " ve got eager buyers seeking deals too good to be true and anonymous sellers looking to make a killing. That's a fertile breeding ground for fraud.
(Mulrean, J. , 5 steps to avoiding auction rip-offs, retrieved 12 April 2002 from MSN Money, web ground for fraud. ) One of the concepts that the online auctions were started with was the idea that people could police themselves, but those with the intent to take advantage of others have found the means to bypass this mild safeguard as well. It was envisioned that with the opportunity to give 'feedback' on each other as buyers and sellers, honesty would remain intact. However some have found a way to inflate their ratings which makes them appear trustworthy to do business with.
There are steps to take to reduce the risk of being scammed by a less-than-honest individual in an online transaction, and the first step is to deal only with reputable establishments. At least if there is a problem with the transaction, whether as the buyer or the seller, one stands a better chance of resolving the problem satisfactorily for everyone. So do your homework as to where it is safe to do business. Establish the top price that you are willing to give, keeping in mind how much more than the bid price you will have to give to cover shipping, insurance and tax.
If possible, establish the identity of whom you are dealing with. Have they been operating with this auction service for an acceptable length of time? Do they have any comments about them, either positive or negative? These thing must be considered in an attempt to protect oneself from the risk of being scammed. Another safeguard to consider is, "how will one pay for the goods?" There are payment services available such as PayPal or Bill point. Many of these services offer some form of assurance and insurance against fraud. Or one may want to consider an Escrow service to handle the transaction.
Many of the auction sites have an escrow service to offer their clients, however there is usually an extra fee associated with these services as well. Whatever the means one chooses to minimize the risk of loss due to fraud, in the end it still comes down to the individual consumer and the choices they make. Until the goods are received and all parties satisfied, one should keep record of any and all transactions, whether they are the buyer or the seller. It may help provide proof of what took place, and help get ones money or goods back, if one has the misfortune of being the victim of online auction fraud. References eBay, Sellers Guide, retrieved 11 April 2002 from: web Company Overview, retrieved 11 April 2002 from: web) (Mulrean, J.
, 5 steps to avoiding auction rip-offs, retrieved 12 April 2002 from MSN Money, web ground for fraud. ) Regan, K. , (2002) "EBay Turns to Intel To Beef Up Web Hosting " retrieved 11 April 2002, from News Factor"a Network site: web Vigoroso, M. , (2002) And the E-Commerce Gold Medal Goes to... retrieved 11 April 2002, from News Factor"a Network site: web.