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Introduction to Auctions and Marketplaces

Friday 20 November 2009
by SaleHoo.com

Success Story

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If you've ever been to your farmer's market, a European village market, or a Moroccan or Turkish Bazaar, then you will be familiar with the concept of a market place.

Markets have existed for thousands of years, all over the world, for selling items of all shapes and sizes. Their purpose is first and foremost to allow buyers and sellers to meet, conveniently, in a public place, for the efficient trading of goods.

Whenever there is a demand, markets have been used to supply it! Historically, markets have been used to sell everything from rice and jewelry to slaves and magic love potions.

While most markets these days sell wares just by product display, some markets also employ the auction system. Auctions create excitement and encourage competition, and many sellers find it a great way to drive up prices and increase profits.

Among the many uses of auctions, one of its most infamous purposes was to allow land owners to buy and sell slaves.

Today however, auctions generally have a much less sinister purpose! Most are used to sell big ticket items such as real estate, art, and cars.

So as you can see then, market places and auctions are not new concepts. But over the last 10 years, a phenomenal development has provided a new platform for markets and auctioneering, causing a massive, world-wide revival in auctions and marketplaces.

And what is it?

The Internet.

This one, incredible development has already changed the way the world functions on many levels, and markets are no different. Why?

If you've been to a real-estate auction, you'll know that the auctioneer would be absolutely overwhelmed with joy by the presence of 50 genuine bidders. At an art auction for a very rare piece, bidders may number a couple of hundred or more.

But, with the introduction of the World Wide Web, the potential audience for an auction has increased stratospherically!

When the online auction site eBay first began in 1995, little did its creators realize that 10 years later, by September 2005, they would have 157 million members worldwide.

It seems that buying and selling provides a thrill that we all want to experience, regardless of our age, culture, or gender.

***Curious Fact***

Mysteriously, fierce competition for an item hugely elevates its value in our minds. Psychologists have found that if something is highly sought after by others, we suddenly want it much more desperately than before. This is just as true for Baby G watches as it is for potential life partners! How many times have you suddenly wanted a CD or a high-fashion Von Dutch cap just because everyone's talking about it? Even if you thought it sounded terrible or looked atrocious beforehand?

eBay has virtually revolutionized the marketplace in two remarkable ways:

  1. It allows items to be bought and sold by people worldwide.
  2. Someone from Australia can be bidding against someone from Taiwan for the same digital camera. Someone from a small village in Poland can sell hand-crafted wooden toys to buyers in Mexico and the US. All within the space of a few days!
  3. Members have the freedom to buy and sell directly - they are no longer helpless consumers reliant on big name stores and marked-up prices.

So what opportunities does this give to YOU, potential buyer, seller and eBay extraordinaire?

How does an eBay auction work then?

  1. First, you must have an item to sell: Once you've found something, check with eBay's guidelines to determine whether or not it is permissible (some items are prohibited) and research its value.
  2. Take Photos: Secondly, take a photo of the item that is a clear and accurate representation. You can list an item without a photo, but tests have shown that photos dramatically increase your chance of making a sale.
  3. Set up your Auction: You have to write a brief description of the item, including important information such as any flaws, whether or not it has a guarantee, age, brand, dimensions etc. Add your photo to this, along with payment and shipping details.
  4. Manage the Auction: Once you've put your details up, you can track how many people have viewed the item, how many have bid on it, and edit listings and manage bids. If your item doesn't sell, you can re-list it.
  5. Hooray! A sale: When the auction ends, contact the winning bidder who will pay you. If all goes smoothly, you should then leave positive feedback.
  6. Shipping: Establish the most appropriate shipping method and make sure the item is well wrapped. Shipping is a highly important part of the selling process: You don't want your buyer to receive a broken product!

What You'll Need

While this form of business involves spending significantly less set-up costs than most others, there are still a few things that you'll need:

All these items are pretty much essential if you want to trade efficiently and effectively.

Workbook

  1. Why are auctions such an effective selling technique?
  2. Write down your reasons for wanting to sell on eBay.
  3. How much time per week do you plan to spend on your eBay business?

Refer back to these answers and make changes if necessary as you progress through the rest of the lessons.

Next week, I'll be taking you step by step through the process of registering as with eBay as a buyer and seller. You'll also learn what you can and can't sell on eBay, and, you'll get to sell your first item!


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