Internet auctions - future of e-commerce.
This afternoon I'm going to talk about internet auctions - how to make money on them and what are the outlooks for future in this segment of e-commerce. I've divided my presentation into four parts. First I would like to make a short indtroduction and then I would like to move to the world of Internet auctions - I'll focus on aspects of setting up a business. Afterwards I'll discuss the future of e-business. At the end I would like to sum up main issues.
Ok, so as you may know, Internet is a place for everyone, where you can do almost everything: get information you want - from daily news to technical help, meet friends and chat with them, send and get e-mails, send text messages to your mobile phones and… you can BUY. A lot, lot of things. There are two types of portals where you can buy items. One is a typical shop, where you can buy a specified range of product. The other is auction - the big international market where you can buy whatever you want, from wherever you like, for the price YOU want to give. This type of trade is becoming the most popular here in Poland. Almost all products (especially second-hand) on the auctions are even 50% cheaper then in a traditional shops.
Now I would like to move to business aspect of internet auctions.
Online auctions have advantage over traditional distribiution channels in several fields. First is the cost of selling. The biggest and the most succesful auction currently is allegro.pl which charges a few percent fee from the value of sold goods. It also charges for every form of distinguishment, exposure product or extra photos (e.g. your offer will be noticed after opening the main page).
The cost of selling things even on paid auctions is not very big. As you can see on the screen, price for exposure is closing in 2zl (without extras) and the commission for sold item is from 4% to 0,5%. On the next screen you can notice prices for some extras, from which you can choose, if you want your auciton to be distinguished from other auctions.
Price list is also at the competition - Aukcje24.pl. However other platforms don't demand currently any payment.
To those fees, you have to add costs of internet connection and digital camera.
When selling goods in traditional form of distribiution, costs of sold product very often outstrip its initial value. In case of having one's own shop, price includes rent of office, media, exposure, paycheck for personnel, etc.
The second important advantage when selling on e-auctions is the range of the recipients. The location of company is no longer a barrier to reach customers. In normal distribiuton the offer is usually local.
Administrators of auctions usually try to draw attention to as many buyers as possible. For example, Allegro has links to its web page at many internet portals. Thanks to this, sellers on auctions have less advertisement expenses.
Online selling has also disadvantages. First of all, physical contact with client is lost. That for some kind of commodities is not good. Besides, on auctions not everything can be sold.
As mostly young people participate in them, its also hard to talk about mass character of sale. And not always each auction is successful, but that does not prevent the seller from exposing goods one more time.
When making virtual transactions a very important thing is honesty of a buyer, as well as seller. Before dishonest exposurers and light-hearted buyers there is an extended system of comments. Comments are written by participants of auction after transaction between each other . The more positively the better. Several negatives disqualify that person.
What can a salesperson do, who has set up his auction for the first time and hasn't collected any points? His offer and presentation must be excellent prepared. All commodities should have photos and good, honest description. Also everyone can make their own web side. It's good if there is address, real company name and a short presentation of activity.
On one auction it is possible to sell several objects, but for all of them possible fees are calculated separately. Auction does not always come with bidding. On all portals there is option that allows setting one price for product.
This is called “Buy now” and after using it, auction ends.
The form of payment for a bought commodity depends on a seller. It can be a transfer on account before supplying product. It also can be made at delivering package. Usually cost of delivery is paid by buyer.
Current leader on Polish e-auction market is Allegro.pl. You have to pay, when selling on this portal, but you have guaranted access to biggest number of recipients. As managers of Allegro are announcing, there are 1,5 million registered users.
And this birngs us to the next part of presentation.
Of course nobody knows what the future holds in store for us, however I think it is quite easy to make predictions what will happen with this typical market. We live in the age of internet - which is a big global village. It brings advantages and also problems for companies providing internet auctions. On the one hand, the range of customers is almost endless, on the other hand, there are a lot of competitors at the world market. So to survive, companies have to merge. How will this affect us, clients of e-auctions? I see only advanteges. Wider choice of product, more challenging prices, opportunity to buy goods unavailable at home market. For sellers it means access to more customers which comes with more profits.
In the near future I think that there is an other thing that will develop very fast at e-auctions - services. It is a very large market but a few people know how to promote on the internet and do not spend a fortune. It's is more or less possible, but in my opinion it will come from needs of market.
Finally, it is time to sum up the main issuses.
As internet auction are becoming the easiest way to sell and buy all kinds of goods, it's hard not to believe opinions that this niche of e-commerce will steadily rise for a long time. Simplicity of bidding and the extra-wide range of products, made e-auctions very popular in many circles, especially young people. Low cost of selling commodities attract sellers to move from traditional to virtual market.
It makes very good prospects for future.