As we have seen over the last few years, online auctions have proven to be a boon for global buyers and sellers. It is not necessary for the buyers and the sellers to be in the same city or even in the same country. A person in Australia can sell an item to a person in England or vice versa. An online auction site breaks all the barriers of a traditional market place where a buyer and a seller had to meet personally.

All that a buyer or a seller has to is register on an online auction site like eBay. Registration is normally free. The seller has to put up a display and description of the item that he wants to sell. For example if he wants to sell his year old dvd player then he has to place the item under the category of electronics which maybe further categorized into DVD players, etc. If the seller can post an image of the product, then it would be easier to sell and it is better for the buyer. The seller then has to give a description of the item(s) he wants to sell. For example if he wants to sell a DVD player then he will mention the manufacturer, the year of make, the model number, and any other special features of the DVD player. Next, he will have to post a minimum price at which he wants to sell his DVD player.

A buyer will visit the category of the product that he wants to purchase. He will be able to view the details of the product that he wants to purchase. If he is interested in the product, he will place a bid. There maybe many potential buyers who place bids on a particular product. There is a last date and time which the bids are placed. On the last date, the buyer with the highest bid gets to purchase the product. The buyer can pay the seller through credit card or international check or even ebay’s own PayPal. The seller will ship the product to the buyer and the auction company and payment company takes their commission. This is normally how an online auction works.

Though online auction sites are a great way to buy and sell goods they come with their own risks. An online auction site is just an intermediary between the buyer and the seller. It does not hold itself responsible for any disputes between the buyer and the seller. The buyer should normally pay through credit card as it offers additional protection in case of a dispute. Also, both the parties should keep all important documents of correspondence printed and kept in a safe place unless the transaction is completed. Many auction sites do have programs to identify those buyers and sellers with integrity and to eliminate those who do not.

To start a home-based Online Auction business is very easy. Unlike other home-based businesses, it requires no investment. All it requires is a few moments of your time to get started. The advantages of starting a Home-Based Auction Online are –

ü No investment is required; hence there are no financial risks like other businesses.
ü There are no fixed working hours. You can choose to work when it is convenient to you.
ü No technical skills required.
ü You can get your Online Auction Business started in less than 10 minutes.

Wow! That sounds real easy doesn’t it? Well it is. No wonder that people all over the world are making thousands of dollars with their home based online Auctions.

Now lets get down to the details of how to get started with your home-based Online Auction, first and most important, you have to get an idea how Online Auction works. To get an idea you can visit various online auction sites like –

http://www.ebay.com

http://www.auctions.yahoo.com

http://www.ubid.com

http://www.onsale.com

http://www.qxl.com

It’s easier to understand how auctions work if you have first hand experience of buying an item on an online auction. You become familiar with how to register with an auction site, how to place your bids and how to make payments and receive delivery of your goods.

What You Buy is Up To You
Even if you want some item very badly, do not buy it because it is the last item of its kind available on the auction site. It might be over priced. You can try to best to get what you want at other online auction sites.

Late is Best
It is always best to leave your bid till the last few minutes before the closing of an auction. This prevents the price from being driven too high.

No Time? Then Automated bids are the Best
If you are hurried for time then automated bids are the best way for you to place a bid online. You can use automated bidding sites like eSnipe http://www.esnipe.com
You can open a free account on eSnipe. When you want to make a bid all you have to do is type your bid amount. eSnipe automatically places the bid for you before the closing of the auction. You pay eSnipe a small amount if you win your bid, otherwise you pay nothing.

Lookout for Wrongly Spelt Items
Many items on a home-based Online Auctions are wrongly spelt. You can use this to your advantage, as there will be less people searching for wrongly spelt items.

Buying and paying for an item online teaches you how things work from a buyer’s point of view. This gives you a good idea about what kinds of customer services you can offer buyers on your own online auction site.

List Unwanted Items
Now lets get into how to start setting up your own home based online auction. Look around your home. You’ll see many things that you have no use for. You can also ask your friends for unwanted items. Make a list of all these items on your site as well as their photographs. There is nothing like a photograph to instantly grab the attention of the buyers.

Description of Items On Sale
This is very important as it give your buyers a good idea of want they will get. Make sure that you give all the technical and detailed descriptions of items on sale.

Offer A Guaranteed Refund
To convince your buyers about your honest approach to business and your integrity, offer to refund money if the goods sold by you are less than satisfactory.

Feed Back Forms
Positive Feed Back forms are an absolute necessity to show your prospective buyers that you have satisfied customers. And to have satisfied customers your quality of service has to be very good. Positive feedback reassures your prospective customers of your integrity.

Set a Reserve Price
Always sell items on your home-based Online Auction site for what it’s worth. Never ever sell it for less than its value. To do this you need to set a reserve price, below which you will not sell. Make sure that your reserve price is not too high, as it will scare customers away.

Different Payment Modes
Make your site more customer friendly by offering a number of payment options, like credit cards, Pay Pal (www.paypal.com) etc. Make sure that all payments are secure.

Now that you have all the necessary details on how to start your home-based online auction business think of catering to a niche market. This will reduce the competition from other online auction sites.

Remember that it is within you to earn thousands of dollars with hardly any investment.

Good Luck

Online auctions create a competitive advantage because they make it relatively simple for Procurement managers to negotiate on all corporate purchases and create better deals.

Let us see some common myths surrounding online auctions:

MYTH #1: Only very familiar, particular or consistent items can be auctioned:

The myth came into being because no one understood how to measure criteria other than price. Total cost auctions take price and no-price factors, such as delivery time or customer service, into account, and they allow a customer to weight each factor accordingly. This is only a myth because when someone with sourcing expertise takes a creative approach to defining or breaking down the item in question, that item or its components can generally be auctioned.

MYTH # 2: Auctions are only effective when there is a level playing field:

This is false since a level playing field simply doesn’t exist. And, not all suppliers are alike. Face-to-face negotiations have long proven this fact. Procurement managers can now normalize for differences (e.g., customer service, warranty terms, delivery cost, etc.) using Web-based technology. In effect, these technologies measure total cost allow customers to compare apples-to-oranges.

MYTH #3: Only Internet-savvy suppliers can participate in an online auction:

Today, the majority of legitimate suppliers have access to computers. The myth that only internet-savvy suppliers can participate in an online auction is wrong. In order to participate in an Internet based online auction, the suppliers merely need to be able to log on to the Internet, log in to a web site, and log their bids. It’s just very simple. Suppliers don’t have to know how to navigate the World Wide Web or use any sophisticated search engines to participate.

MYTH #4: Maximum benefits could be derived only if large number of suppliers participate:

For any online auction, competition is a must and you must create a competitive environment, no matter if the suppliers is 4 or 400. Internet auctions put the business “up for bid.” Incumbents are wise to take notice. Once existing suppliers believe that the buyer really will change where he takes his business, a competitive environment is created. Thus concrete results for online auctions occur irrelevant to number of suppliers.

MYTH #5: Only products are auctioned?

Not true – in fact, services are also auctioned. Services such as Telemarketing services, Cellular phone services, Security services, and temporary labor services are all good examples. For example, a particular auction site held an auction for telemarketing services that resulted in an 18% cost reduction. The auction involved over 60 suppliers and more than 700 bids. The study shows that apart from products, services can also be auctioned.

MYTH # 6:Auctions are carried out only once in a year:

Event online auctions are generally used for categories of goods and services that require a long-term contract (say one year). These will achieve better results if auctioned year (or less). For example, a buyer may auction off the purchase of 10,000 PCs over a two-year period.

It is important for all to expand their concept of what can be auctioned, as long as the value of each item is ‘elastic’ enough to preclude fixed pricing. Once they have done that, the possibilities are almost endless.

The reverse online auction is a process were you, the buyer, indicates what you would like to purchase and then a number of suppliers will bid on your item. Now they really want to make the sale to you and will watch what the other suppliers are bidding and will even lower the price in the auction to obtain your business. Depending on the item you are purchasing you could save hundreds of dollars by participating in one of these reverse auctions. As the price of the bids decrease, you are saving money!

The best part about reverse online auctions is that you can do all of this from the comfort of your home without having to get into your car to visit all of the usual stores. Just relax in front of your computer and watch the bidding begin in the reverse auction process. This new method is available to you today on Bidbroo Reverse Auction Click Here. It will revolutionize the purchasing of big and small ticket items and put the power of the auction with the buyer. Of course you will need to know and be able to describe what you are purchasing, so you will have to do some homework ahead of time to ensure that you are accurately describing what you want to purchase. This gives you the opportunity to compare the price your closest big box store was offering before the online auction began.

The Problem.

Bidders will bid on an item and then wait for days until it finishes, only to have someone else outbid them at the last minute. In a traditional auction at a real auction house, this isn’t a problem at all, as the auction keeps going until everyone has bid as much as they want to, and the auctioneer double-checks with the classic phrase “going, going, gone”.

The problem on eBay is caused by the fixed length of time that eBay’s auctions last, and the fact that they aren’t extended significantly if someone places a new bid in the last few seconds of the auction. Imagine if a real auction house worked that way, letting people shout “50 cents more!” at the last second and win an item. It would simply be unfair, and many buyers think it’s unfair on eBay too.

The Solutions.

Until eBay decide to fix the problem (and by now it’s looking unlikely that they ever will), you’re the only one who can do anything for your buyers.

First off, you can encourage your buyers to use eBay’s proxy bidding system the way it was intended. The idea of the system is that they enter the maximum they’re willing to pay for an item and eBay places bids for them automatically up to that maximum. They’re not supposed to come back and bid an extra dollar every time they get outbid.

If your bidders are bidding high enough, then no sniper will even come along and beat them – because they will have set the maximum snipe level in their sniping software to less than the normal bidder’s maximum. Changing the way people use eBay is hard, though.

One alternative is to keep an eye on who’s bidding on your auction, and cancel bids from known snipers – but this requires you to be around right at the end of the auction to cancel their bids. You might also want to set your auction to end sometime when bidders will be around so that they can outbid snipers themselves. This is good business sense anyway – most of the bidding always takes place in the last few hours of an auction.

An easier way to thwart bid snipers is to offer ‘Second Chance’ sales to bidders who get outbid by a sniper at the last minute. This is good for you, and for them – they still get to buy the item they wanted, and you’ve just made two sales: one to the sniper and one to them.

Once you’ve sold your items, though, you might be upset to find that one of them gets returned for a refund. Our next email will show you how to turn these returns into profits!