Online auctions present significant opportunities
If you’re one of the millions of consumers who has caught the online auction bug, you already know that you can make—or save—some serious coin on the Web, simply by knowing your way around the online auction community. And as an electrical contractor with a Web site, you have also probably realized that such auctions offer you the opportunity to promote your business in a new venue, and market to an entirely different customer base.
Granted, you are probably not going to shuffle off to eBay or some other auction site to try and market your services. But such sites do offer you a perfect opportunity to unload capital equipment you no longer need—or pick up secondhand equipment for your business at below-wholesale rates.
Indeed, in a recent check of for keyword “electrical” on eBay (www.ebay.com), the online Web auction leader, more than 1,700 industry-related items were listed. The top ticket item: an entire electrical contracting business was up for sale, including its building, for a starting bid of $95,000.
If you’re looking to make your own foray into online auctions for the first time, you will find that all of the groundwork has already been done. On any given day, there are now more than 12 million items in more than 18,000 categories listed on eBay alone, according to Kevin Pursglove, an eBay spokesman. All told, the eBay market site realized $14.87 billion in gross merchandise sales for 2002.
Moreover, you’ll find that the concept of online auctions is still so new that novelty alone brings in traffic that otherwise would be non-existent. “Online auctions are the hottest emerging trend in dynamic pricing,” said Dennis L. Prince, author of “Official Guide to Online Buying and Selling,” published by Course Technology (www.course.com), and an analyst of online auctioning. “People drop by to see what’s happening, and bid, bid, bid.”
Other than being fun for bidders and buyers, eBay and others continue to attract droves of buyers simply because of their reputation of being a magnet for great deals.
“Online auctions now offer millions of items—so many, in fact, that it’s common to find overlooked [and therefore underpriced] items,” said Prince.
Such auctions have also orchestrated an unintended side effect. Hordes of business buyers, who previously felt uncomfortable making online purchases, have been converted after participating in online auctions. The reason: many auction sites keep a running history of customer comments on the sellers’ performance. Indeed, some “power sellers” on eBay have written endorsements from hundreds of satisfied sellers—records that sellers in the brick-and-mortar world would be hard pressed to replicate.
Of course, as with most business transactions, things can get ugly fairly quickly if you happen to run into an unscrupulous buyer or seller. Ditto for buyers and sellers who don’t understand the game, or don’t communicate well in an online environment. So, if you’re looking to make the plunge into online auctioning, you’ll want to know your way around before you get in too deep.
As an established businessperson, you’ll quickly find that offering your own items and services for auction on services like eBay requires all of the same best practices that any decent seller cultivates in the offline world. First and foremost: Be sure to turn around a response to every e-mail within 24 hours. “Remember, sometimes bidders who ask questions are testing the water,” said Prince. “Your responses beckon, ‘Come on in, the water’s fine.’”
You will also want to clearly state the terms of the sale, including your policy regarding return of the item, and the rate you will charge for shipping. You can save yourself a number of superfluous e-mails about shipping costs by posting the shipping dimensions and weight of your item, and then offering links to the shippers available. Potential buyers can then calculate the exact shipping costs by entering in your zip code and theirs.
If you are trying to unload an aging vehicle or similar motorized item on eBay, you also may want to advise potential buyers of eBay’s Pep Boys’ 25-point check inspection.
Of course, if you’d rather not sweat any of the cyber-details, some online auction sites offer the services of independent agents who will handle all the particulars for you. For a model of such personal assistant services, check out eBay.com’s Trading Assistants Program at http://pages.ebay.com/tradingassistants.html.
Once you’ve gotten the hang of online auctioning, you also may want to use such services to source incredible bargains for your own firm. As a buyer, you may find astounding deals, because some sellers simply do not know the value of the items they’re offering, according to Prince.
In addition, you will often find sellers are more eager to please in the online auction world, because many auction sites keep that easily accessible record of buyer comments for all to see.
As a business buyer, probably the easiest way to introduce yourself to online auctions is to engage in a few inconsequential auctions on eBay. Participating is a snap, really: You enter the amount you want to pay, monitor the auction, and wait for an e-mail alert from the auction site informing you if you have won or lost the auction.
Once you are ready to move into higher ticket items, you will, of course, want to focus a little more closely on the purchase. Prince suggests that you ask the seller for additional images of higher-end products, taken from various angles. And he says you’ll want a guarantee of a documented history of ownership for the merchandise.
If there is any negative feedback posted against the seller on the site, you will want to ask for an explanation, Prince says. Inevitably, high volume sellers will most like encounter a tiny percentage of negative feedback—a crank or two who cannot be pleased, no matter what—and probably should be given the benefit of the doubt in those circumstances. But be wary of any seller that generates a pattern of negative feedback.
Meanwhile, look out for the placement of bogus bids by the seller in an effort to drive up an item’s price. “With this scam, a dishonest seller will make use of multiple user IDs, or will enlist associates to place bogus bids.”
You can minimize your exposure to such ne’er-do-wells by watching for recurring user IDs that are used to place bids on several auctions run by the same seller, Prince says. Also monitor recurring patterns, in which the same bidder or bidders place last-minute bids with auctions run by the same seller. “You should also watch for bidders and sellers who regularly bid on one another’s auctions—especially if they never appear to win,” he said.
Either way—as a seller or buyer—you’ll find that online auctions are a tool of competitive advantage that are well worth the time and effort to add to your Web arsenal. EC
DYSART is an Internet speaker and business consultant based in Thousand Oaks, Calif. He can be reached at 805.379.3673 or firstname.lastname@example.org.