Buyers:
Many consumers find reasons to conduct their shopping online. Currently, the percent of people that do their shopping online is only 16%. This means that the other 84 percent is done in physical store locations. However, there is great promise that this number is going to increase greatly for the electronic and toy industry. Forrester feels that by the year 2006, 42% of electronics and 40% of toys will be bought online. There are many incentives that drive people to auction sites.

Some of these incentives include:

Saving money: Many of the products that are offered through the auction sites are brand new products. However, the company is offering them at a reduced cost due to increased inventory or lack of demand.

Avoid Crowded Stores: One of the main problems with physical store fronts is that of crowds. People are finding that shopping online alievaties some of the stress caused by shopping. According to measurement and analysis from ComScore Networks, its figures show that holiday e-shopping is up 28 percent from one year ago, with consumer sales for the week ending Nov. 17 (including travel) reaching $1.5 billion.

Ability to shop at buyers convenience: The Internet is never closed for business. For the most part, online auction sites allow the buyer to conduct their business, placing bids on products, 24 hours a day, seven days a week.

Storefront is locationless: Companies offering online auctions sell their products without regard to location. Physical location has always been a determining factor of whether or not a good could be purchased. Having the ability to search storefronts around the world from the comfort of your own home is quite inviting.

Sellers:
Currently many businesses are looking at online auctions as a business option creating initiatives or as the only method for them to stay in business. This trend of physical stores turning virtual is occurring every day from the largest chains to the smallest specialty stores. Businesses are seeing that auctions are a perfect way to liquidate outdated, obsolete or surplus inventory. By passing on the inventory, value is added by increasing the amount of profit the company receives. This value is the causing factor that is driving many businesses online.

In today's B2C market place there are two main types of auction sites. The first group is composed of auction sites which the seller owns the auction site.

These include companies like:
Sam's Club
Sharper Image

Many businesses like the ones above find value in the fact that they do not have to maintain a physical store front. By conducting business online they are able to reduce their cost and thus raise their profit margins. This factor is going to be the driving force behind virtual auction fronts for stores that currently have physical locations where they conduct business.

The second form of B2C market places comprises of third party sites which businesses use to sell their goods to the consumer.

These include companies like:
uBid
Priceline.com
Amazon.com

Sites like the ones above provide a service to the sellers of the goods. These third party sites allow companies to auction off their goods without having to set up the store front themselves. Another benefit possessed by the sellers of this form is that they are able to sell their goods at a location that is identified with an auction image.David Steiner, president of Natick, Mass.-based consultant AuctionBytes.com says that "Companies could do auctions on their own, but it would depend on their infrastructure. By going with an established site, you can get everything up and running instantly."

These sites are especially prevalent with small businesses and entrepreneurs. Sean Kaldor, vice president of e-commerce at Neilsen/NetRatings, stated "Auctions are a real sales channel for them."

Payment:
Currently the most common payment type is the credit card for online B2C transactions. Credit cards provide the buyer with a secure means of purchase. Another reason for credit card use is that the infrastructure is already inplace and the buyers have grown accustomed to using them. Other forms of payments are in use but with a smaller amount of buyers. Such optional payment methods include PayPal and other third party payment sites.