Buyers
In
a consumer to consumer auction, both the buyers and sellers anc consumers.
Using sites like eBay, consumers all over the world can shop online
and purchase goods from other consumers, just like themselves.
Sellers
What
are they selling? Auctions on the Internet: A Field Study performed
a survey of 100 online auction sites and discovered what is being
sold on the auction sites. According to their survey, 53% of the
sites sell both new and used merchandise, 29% only sell new merchandise
and 12% sell only used goods. The majority of the sites surveyed,
67%, specialize in one type of product such as computer equipment
while the rest offer a wide range of items and products. As to exactly
what types of products these sites are selling the most common is
the other category, 49%, which ranges from “airplanes to horses
to adult materials to heavy construction equipment.” After
other is computer related products with 47%, information 30%, consumer
products 28%, collectibles 22%, automotive equipment 17%, recreation
and travel 16%, arts and crafts 16%. Rounding out the bottom five
are financial products 9%, antiques 9%, real estate 7%, sports equipment
and memorabilia 7%, food and beverage 5%.
Payment
There
are many payment options for an online auction purchase. Payment
often depends on the seller’s personal preference. Up until
two years ago most payments were not conducted online. Now there
are many services that offer online payment options. The traditional
methods of payment still exist for payments of online transactions
and they include personal check, postal order and money order. All
of these options are slower to process and mean that the buyer must
wait longer to receive the goods.
There
are two main types of online payment services: Person to Person
(P2P) and online money order purchasing.
P2P
Person to Person accounts are when buyers send money to the sellers
electronically. PayPal
is one of the more popular examples of a P2P payment service. This
type of service is usually free for the buyer but used at a charge
for the sellers who are the ones accepting the money. In order to
use PayPal both
the buyer and seller must have an account already set up. Users
add funds to the account through credit card, check or bank account.
There are some risks involved when using PayPal
because the money in the account is not insured. Also it is not
a good idea to deposit a lot of money because it will not earn interest.
Money
Order Payment Service
BidPay is a service
that allows buyers to purchase money orders online and then sends
them via regular mail to the seller. There is a fee to the buyers
for this service. BidPay
is only applicable for the payment of online auction goods and cannot
be used for items costing over $500.
Merchant
Accounts
Many businesses have merchant accounts which allow them to accept
credit card payments for online transactions. Sellers without an
established business can also accept credit card transactions online
using services like ProPay
Web Pay. ProPay
charges a lower maintenance fee but higher transaction fees, than
a regular merchant account. How it works is the seller enters the
buyer’s email address, final bid amount and description of
the item. Then an email is sent to the buyer that includes a URL
to a secure site where the buyer enters their credit card information
and the money is deposited into the seller’s account. Like
BidPay there is
a limit on the amount of money that can be processed in one transaction.
These
are just a few of the online payment methods. For a list of more
online payment services please visit Auction
Bytes' list of Online
Payment Services.
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