Auction fever
April 2004
I love markets and auctions; street markets, junk or fine art auctions, any of them. They can work well online, too, as the Internet can provide the perfect opportunity to match seller and very distant buyer.
Once you find the right internet “meeting place”, it might be possible to find someone, somewhere, anywhere, who is selling just what you want. Or someone who wants to buy what you’ve got.
The most successful such site is www.eBay.com (www.eBay.co.uk over here), an auction site which was started in 1995 and has left most of its competitors panting in its wake. It made profits of almost $500 million last year (don’t believe anyone who tells you that all dot com businesses fail).
To list something costs £2.00 or less, setting a reserve costs 2%, and if it sells you pay a percentage of the sale price (1.75% to 5.25%). Auctions last up to ten days; there is no Buyer’s Premium.
Of course, where your local auction room wins is in providing the opportunity to assess the goods in the flesh, and take them away after the sale. At eBay all you have to go on are some text and a picture, and perhaps an email conversation with the seller, if there’s time. In addition you will have to pay for delivery of the bought item.
This doesn’t seem to worry many people, however. eBay say that they have more than 42 million registered users worldwide, and that every day more than one million new items are added, split over more than 9,000 different categories.
Part of this success is, I believe, due to their “feedback” system. After a purchase, you are urged to submit a short report on how the transaction went, giving the seller a positive or negative score. This forms a permanent and public record which future buyers can see before bidding, and therefore discourages rogues and spivs from dealing more than once. If a seller has a string of bad references – you just don’t bid.
Do remember that, as with all auctions, once you’ve bid, you are committed; if you are not outbid, you must pay. Buyers are given public ratings by the sellers, too, and persistent non-payers are suspended.
So what is eBay best for? As a buyer, I would say that it works well for very specific items you know plenty about; if you need that lawnmower spare part, a particular book, theatre ticket or digital radio, then it’s fine. You know what you are getting.
On the other hand, if you are browsing, and just buying something that looks pretty, then you are taking a much bigger risk of getting a pig in a poke.
Remember also that you are not immune from auction fever is just because you are not in a real auction room, so don’t get carried away. Bidding online is very easy, so keep your bidding finger under firm control.
My advice is to learn what’s going on before you get too involved. There are undoubtedly bargains to be had, but not everything is cheap. Choose some items that you know something about and spend a little time watching the auctions without bidding. And don’t overlook carriage charges, as they can often negate an apparently cheap price.
The reassuring part of all this is that, as ever, there is nothing new under the sun. Market places have been the lifeblood of human exchange for as long as trade has existed, and eBay is just another market place that works in the same way. All the Internet has done is to increase the size of the room, and to lengthen the opening hours. Everybody wins.
