Nowadays everyone is quite aware of online auctions which involves buying and selling of goods with biddings. You might have heard about people who buy and sell things over the internet with online auction sites like eBay. Online auction websites are increasingly becoming popular for buying everything right from used pots, pans to valuable fine arts. What are these all about? How to start an online auction business on your own and make it a profitable one? This article is all about the same.
Who can start an online auction business?
Virtually anyone who has some startup money and time can start online auction business, but you need much of effort to get that going. Based on the demand for the products sold on your site, your online auction business serves as a great supplement to become highly profitable.
In 2002, online auction businesses determined to a 30% of online transactions in eCommerce. Whereas in 2017, they have grown to a huge scale and taken away eCommerce predictions by surprise!
According to a Market Research Report in April 2017, the eCommerce & Online Auctions in the US – IBIS World estimates that the annual revenue of the online auction business will be in the range of $394bn. and it is expected to grow at an impressive rate of 13.3% every year.
Why to Start Online Auction Business?
An online auction business has the following benefits:
No geographical location required – inventory can be managed online, and upon sale, it can be shipped physically.
Convenience – bidders can participate from anywhere, anytime – no limitation regards to time, place, and person.
Time & money saving – no need of traveling, just logging in makes it possible to participate in the auction.
Quick result with instant price update – as it is online, the bids are instantly updated, and the results are flashed without time delay.
Compare prices – gives the opportunity for the user to compare price online before taking the bids.
Time extensions – total bidding count down can be increased when a bid is placed.
Many bidders – since this platform allows to bargain wide variety of items at lower-than-retail prices it attracts huge consumers.
Many sellers – alternatively it also draws many sellers as it allows to sell higher-than-retail prices.
How to Start an Online Auction Business?
Firstly you need to be familiar with the process of buying and selling, and you need to understand how the auction is performed. So far, the biggest online auction website is eBay that boasts millions of users worldwide.
Other popular auction websites include:
- Yahoo Auction
Start off with experimentation. Buy an item of your choice from such sites to get the feel of how it’s done. This will let you have an overall insight into the process of registering, bidding, paying for the goods and delivery practices.
The online auction represents a global marketplace for selling just about anything!
Online Auction Business Model: How does it work?
Sellers set-up their account, profile or store based on the selected auction site’s parameters and upload products, descriptions, photography to attract customers. Buyers can search and bid on the available products within a selected timeline and bid price.
Buy it Now (Buyout): This is a feature that gives your customer the facility to buy your pr at a set price without having to wait for the auction to get over.
Reserve Price: The lowest amount is set for the seller to sell his item and the bid will start from the least price and if it does not meet the reserve price the auction ends without a winner.
Proxy Bidders: Bidders set a maximum price they are willing to pay for a specific item and the software automatically keep bidding until the auction is won or the price limit has been reached. This allows the bidders to bid even when they are not available online.
Dutch Auctions: if a seller has many of one item, he can sell it as multiple or dutch for a fixed price or auction. When done as an auction, the bidder may choose the quantity (no. of items) and the price he wants. The buyer can only outbid if the total cost including the no. of items multiplied by bid price is higher. And, the winning bidder will pay the lowest successful bid.
Online auctions are an important part of today’s internet commerce, and the auctioning websites like eBay even had revenue of 9 bn. Dollars in the year of 2010. Nowadays building and maintaining a website is as easy and all is you need is an online auction software.
The software takes care of the product categorization, and it serves as the means of communication, handle bids, payments and shipping and in short it regulates the process to auctioning and functions without any time delay. This automation results in a reduced price for the items compared to a regular face to face auction while providing the seller a good profit.
Features Required for an Online Auction Business:
The online auctioning business has given new ways of online selling in which anyone can sell anything to anyone around the globe. But, here the seller is not the only person generating income, and the one who gets profit is the website / marketplace owner. It is because having an online auction website will help you charge fee for practically anything including: new account, no. of items for sale, bids, commissions, photo gallery, product description, etc.
Here are some features you need to build an online auction website and generate income:
Proxy Bidding System:
It is a kind of software that enables to automatically place the bid on behalf of you to the maximum possibility for the highest bidding. This allows you to stay as the highest bidder and winner of the auction process. However, in the proxy bidding system, the proxy bidder will remain confidential throughout the auction.
BIN (Buy It Now) Functionality:
As said previously, this allows the seller to set an option for the seller in addition to bidding. This ensures both the buyer and seller is favored with the price. The seller may accept the price of the product without placing the bid to the buyers.
Reserve Price Selling System:
This allows the seller to place a minimum price that the seller accepts to sell his item. It obligates to sell the item, not above the actual cost of the item.
RSS or Automated Emailing System:
It stands for “Really Simple Syndication”, and it makes your list/collection automatically available to the users as daily deals via email.
There are a lot of gallery scripts to upload your product images on to the auction website. It lets you host your items and showcase them with a variety of images with additional segmentation like categories, tags, and more.
This allows you to perform payment processing with control over high-end encryption. Some of the widely used payment gateways include:
- Offsite Payment (Simple Checkout)
- Server Integration
- Direct Post Integration
- Own Secure Payment Server
Multiple Income Models like Pay per Bid, Pay per Contact, etc.
This generally refers to a business module that allows the bidder to pay a nonrefundable amount to place a bid on the products in the auction.
Community or Bulletin Forum:
A community builder or bulletin forum for discussion will help you manage connections on the auction website. This allows the buyers to communicate with the sellers or other bidders via the forums.
Why choose ionwe eAuction Software to build your Online Auction Business:
Ionwe has the best online auctioning software available. All you need is a web server, domain name and we will be taking care of the rest. We have the entire components designed ready to be installed, run and configure it for you!
The cost to build an auction website differs based on the requirements of your online auction business plan. We have online auction software models for both forward and reverse auctioning which are ideal for you to start your new online auction business.
Are you planning on starting an online auction business and looking for the best online auction platform to get your business started? Let us know by filling your requirements in our contact form.