Whilst auctions give the bidder the opportunity to pick up a bargain, there is also the opportunity to create a competitive environment for the sale of items. Although users can be drawn from a wide geographic area, the implementation of an interactive and dynamic user interface can recreate the bustling atmosphere of the offline auction room.
Using Online Auctions To Increase Demand
When markets draw to a close, frequent bidding can give rise to unique market values being derived, as interest in lots heightens.
- Excitement is generated around the bidding process – which encourages people to make purchases. The online auction has been likened to gambling, and can therefore lead to potential purchasers getting caught up in the excitement of the sale.
- Auction sites provide a cost-effective way to market your product or service online. Because of the convenience, accessibility, and potential for getting a good deal, online auctions can readily attract large numbers of users – making them a cost-effective way to market your product and sell online. Because of the built-in, high traffic volume, online auctions are probably the cheapest form of internet marketing available.
- No geographical limitations – this is a strength of the online auction business model. The internet allows bidders to participate in online auctions from anywhere in the world. The cost of participating in an auction is essentially zero. This advantage also increases the number of products and services that can be listed, leading to an increased number of sellers and bidders.
- Price according to demand and stock levels – reserves can be set according to residual value of items for sale. Additionally, stock availability in the wider markets can help derive pricing policies for items on sale via auction.
- Old stock can be mobilised by putting them up for sale. This might provide a different angle to the retail sale item – where products are sold off at a discounted rate. By auctioning these items there is the potential to make higher margins than expected using fixed discount strategies.