o Very clear defined policies and procedures must be enacted when and if any wrong transaction occurs.
o Rating of buyers and sellers facilitates the identification of sellers who do not exist at the end of bargain.
o Fees and commissions must be mentioned on the site. Most of the sites do not charge any fees from bidders but sellers often have to pay small fees for listing the items and commission on selling any item. So the bidders must compare online auction sites for the fees and commission rates to get an idea of the current rates.
o A good online auction site must have escrow services such as PayPal. These services make the selling and buying more quick by preventing buyers and sellers from becoming intermediary. The buyer can directly send the small fees and payment to the escrew service, after receiving funds escrew gives instruction to sellers to ship the goods. When buyer receives the goods in acceptable condition, funds are transferred to seller via escrew service.
o A good online auction site must have the international payment and shipping option. Commercial sites support international sales.
Advantages of Online Auction Sites
Online auction sites offer several advantages:
o Online auction sites do not stop businesses to carry on sales through traditional sales method.
o An online auction site also reduces the distribution cost of a product. It can be stored at one place until it is ready for shipping. It will also reduce the packaging cost of items for distribution to intermediaries such as retail stores. It will also protect goods from damage and keep them safe.
o Online auction also helps small businesses to sell their seasonal, discontinued or damaged goods often with profits and eliminate inventory expense to store them.
o Online auction sites open the door of international markets for small businesses and help expand global market. That is almost impossible to achieve via normal marketing channels.
o Online auction sites also help new businesses that offer new products and it becomes easy to set a market price based on supply and demand.
o These sites also help to find out what customers are willing to pay without making time-consuming expensive market research
Disadvantages of Online Auctions
Online auctions do not provide buyers with an option of personally viewing and evaluating items before purchasing.
Another major drawback is that it is also not possible for every business to take part in online auction. Companies have to host their own auction websites and for this purpose they need to hire trained technical staff.
Source by sbobet