mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Friday, June 10, 2011

The online auction format isn't totally dead...

Wired has an interesting article up about the decline of the online auction - how everyone thought it was going to create an economist's wet dream, a perfectly informed, perfectly liquid market in everything - until people realized that they didn't want to have to sit around watching auctions end every time they needed a small item, and until eBay kept raising fees and changing the rules for sellers to make it less profitable and less fun to sell, while still having buyers not feel secure about not being ripped off.

As regular readers probably know, I'm a part-time eBay seller - I've been buying since 1999 and selling since 2001. Over the years, my product mix has changed - I started out selling free after rebate items and clearance stuff from retailers, and have since switched to items from auctions and yard sales. I've also tried to focus mostly on business equipment, because I've found I can often buy it cheaper than things like consumer electronics because people selling it at yard sales or bidding on it at auctions often don't realize how much it's worth.

I don't make a fortune, but it's a hobby, and I make enough to pay for the gas to drive to interesting places and still make a few bucks. It's also a nice feeling to know that you were the smartest guy in the room - when you looked at something that a bunch of other people looked at and passed up the chance to buy for $2, and were able to buy it and sell it for $150.

As a reseller, that means that I need to buy inventory, and that means that I've come to realize a small but not insignificant chunk of the liquidation business has moved online to online auctions. Not eBay auctions, but proprietary ones, typically using software like Maxanet or services like Proxibid. Government auctions have also moved to online B2B auctions - the Federal Government now sells it's surplus at instead of at live, open-call auctions. Some previously live auction companies have moved everything online, while others sell some items online and others in live, open-call auctions.

As a buyer, I have mixed feelings on the online auctions. Prices often seem to go pretty high on online auctions, but I've still gotten some really good deals. It's also nice if the auction is a distance away to not have to drive a distance, stand around for hours, and leave empty handed. You can bid from home or work and only drive to pick up if you won something. Some online auction companies do have a bad habit of extending auctions or rescheduling pickup times, which is a hassle if you are a part-timer who has to work around a day job.

But my guess is that online auctions bring a higher overall price and are easier for a client in many cases, which is why places use them. I think when people look at eBay as all there is for online auctions, they are missing a pretty decent chunk of B2B commerce that has moved to online auctions.

The other, somewhat tangential, thing about eBay and B2B is that, since many of my sales are of business equipment, many of my customers are businesses. Some of them are obviously buying them to use themselves, but many are resellers themselves, and it seems like some have a business model that relies heavily on buying certain items on eBay to resell to customers. It's kind of surprising - you wouldn't expect it - and it suggests that eBay has at least made a significant difference for a lot of buisnesses, some of which probably wouldn't exist without it, even if it hasn't had the huge change in everyday customer purchasing that economists were predicting a decade ago.


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