Auction Power Guide

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Shweta
http://www.articlesbase.com/internet-marketing-articles/basic-marketing-metrics-of-your-online-business-701981.html

Auction Bids To Zero

How about online auction sites where the item gets cheaper with every bid that comes in. How interesting is that? This particular auction house category is titled….’Bid to Zero’.

Imagine if you were bidding on a car or any top brand product….and your bid….did get to zero! Forget it….it won’t happen. Someone will zap it up before that possibility!

With these auctions….the item starts off at the normal sale price….and then goes down with each bid.So if it reaches a price that someone is happy to pay….that’s it….sold. Really….won…would be more accurate.

Reverse Auctions

To continue the same scenario as above, while an item price is being bid down….there could be twenty people biding. Out of those 20 bidders….5 bidders may be looking at paying….say….$500 for the item. All five bidders claim the bid at $500. In this case the online auction sites use a special formula to decide the bid winner.

Another auction bid type is the unique reverse auction. As the name suggests the above scenario does not happen.The bid has to be ‘unique’. To add to that….there are two variations.

1. Highest unique bid….unmatched at the close of the auction….wins the biding.With these the maximum bid is set at a below normal sale price.

2. Lowest unique bid….has to be unmatched at the close of the auction. Another couple of bidders could of each bid…an identical lower price, but their bid would not be unique. With this type of auction the starting price would be at the normal sale price.

You can see that internet technology is the catalyst for these auctions. Offline….the purpose of an auction is to attain the highest possible bid price. The Collins Dictionary defines an auction as ‘a public sale where articles are sold to the highest bidder’. The emphasis with reverse auctions…seems to be more on its competiveness…as opposed to the actual price.

The Next Generation: Social Competive Interaction

It should never be forgotten that the primary purposes of the online auction sites are to sell products. Because the items are sold at a fraction of their normal price…is neither here nor their. It is great for the successful bidders, but every auction bid is paid for. I’ll explain that further.

To participate…you register online,select a username and get some ‘bid credits’. When you go to the site and login with your username….you’ll see your available ‘bid credits’ displayed. As you bid…the number of available bids reduces. If you’re biding on the ‘Bid to Zero’ auction house….the bids are 50cents to 66cents each. That bid puts the item price down 20 cents. The residue….the difference in the bid cost and the item price reduction….goes to:

1.The cost of the purchase of the item

2.The cost of the freight and handling to the winning bidder

3.To administration costs of the online auction sites and their profit

All the costs are taken care of…by the participants purchase of ‘bid credits’. So the emphasis….as I alluded to earlier…is towards the competive nature of the participants. Social competive interaction online….expressed in a style of auction entertainment….WOW! Whenever I was biding at an (offline) auction….I never saw it as entertainment….except when the Guy chasing flies…had an item knocked down to him. That gave everyone else a laugh!

Internet technology has made this form of social competiveness possible. Not the same as the ‘survivor series’ on TV….but maybe more rewarding.

New International Internet Auction Site

A United States company is the latest developer of one of these online auction sites. In building this new system they have gone with quality top brand products to offer. It would be fair to say they have picked the eyes out of the best methods…currently used in similar European auction sites. Eventually they will have as many as eight auction houses…all with various auction styles.

They are making the auctions available on an international basis. Something the other auction sites have been slow to do. I have been advised that they will probably have special delivery arrangements for large items won by bidders living outside of the US…..makes sense!

You Can Become a Business Associate

Also different about this new auction entertainment website is that a business opportunity has been incorporated. Business associates will be able to market the opportunity for the specific purpose of encouraging people to buy bid credits.

What seems sure…is that this social competive interaction as they call it…is highly likely to be very popular. Therefore the business opportunity will very likely….be lucrative!

My Summary

Are these real auctions? You can look at it this way:

Those auction houses where the bid causes the price to rise….even if the rise is fixed at only a penny or a nickel for each bid…do qualify under the definition of an auction.

The auctions where each bid causes the item price to fail….surely are not auctions….but ‘reverse auctions’. As in ‘done’ and ‘undone’.

These online auction sites are a new marketing outlet for the product manufacturers and merchants.They are good business for the auction sites, who make their money on shifting quality products. The bidders could pick-up a new car or TV or computer or a million dollar life insurance policy….for example. Also they could do that for an outlay of $20 worth of bid credits and a whole heap of fun! That seems to make online auction sites….a win-win-win situation….for all participants!

Darcy John
http://www.articlesbase.com/online-business-articles/online-auction-sites-where-the-bid-lowers-the-auction-price-671089.html