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BOOT CAMP 296 (14/10/03)
Online Auctions, part 1
Don’t throw it away sell it! One person’s junk is another’s
treasure and if you need proof just log on to www.ebay.co.uk and have a look at what’s on
offer. Buying and selling online can be fun; turn your unwanted goods into
cash, or maybe pick up a real bargain! This week we’re going to see how an
online auction works, in parts two and three some hints and tips for safe and
successful buying and selling.
At any given moment there are upwards of 10 million items for
sale on ebay’s international auction sites, from a ‘Giant one year old Battling
Conker’ (selling for 5 pence at the time of going to press), to houses, cars and
businesses costing tens of thousands of pounds. Ebay is now the world’s largest
online auction having successfully seen off or bought out most of the
competition over the past three years.
It’s a brilliantly simple idea. If you have something to sell
– and there are very few things that can’t be sold on ebay – just register with
the site and choose a user ID (it’s free but you will have to give ebay your
credit card details), upload a description and preferably a photograph or two of
the item you wish to sell and within a few minutes it will be available to
millions of potential bidders around the world, or if you prefer you can limit
it to buyers registered in the UK. If the item sells you pay ebay a modest
listing fee (between 15 pence and £2.00) and a commission (1.75 to 5.25 percent)
based on the final selling price.
At the end of the auction – most run for seven days -- ebay
notifies the successful buyer and seller by email and it is up to them to make
the exchange of goods and money. Buying is equally simple; again it is necessary
to register with ebay and once you have logged on, use the powerful search
facilities to locate the items you are interested in. The current bid price and
number of competing bidders is shown on the auction page; to make a bid enter
the amount you are willing to pay – the minimum acceptable bid is shown for
guidance – click the Bid button and see how you get on. If you are outbid you
can increase your bid at any time up to the end of the auction or enter a Proxy
bid. A proxy bid is the maximum amount you are prepared to pay, ebay then bids
automatically on your behalf, increasing your bid every time you are outbid.
There are no charges for bidding and it is up to you to send your payment to the
seller within a few days of the end of the auction.
It sounds easy, and it is, but you may have spotted a number
of potential pitfalls. For example what happens if the seller runs off with your
money or the product turns out to be faulty or not as described? The vast
majority of auctions go smoothly but with so many transactions things can and do
go wrong.
Ebay takes only limited responsibility for the legitimacy of
an auction since the contract, whilst legally binding, is between the buyer and
the seller. There is a rudimentary and largely toothless dispute resolution
procedure, and a buyer protection programme that covers fraudulent transactions
up to a value of £120, however, the system does have a number of built-in safety
features, the most helpful of which is ‘Feedback’.
At the conclusion of each successful (or unsuccessful)
auction buyers and sellers are encouraged to leave feedback for each other. This
is a short message, which can be positive, negative or neutral, offering praise
or serving as a warning to others. Legitimate traders soon build up a good
reputation and in general anyone with a positive feedback rating of more than 15
to 20 ‘positives’ is regarded as trustworthy, and the higher the rating the less
chance there is of something going wrong. Regular traders – and thousands of
businesses have started as a result of buying and selling on ebay -- build up
feedback ratings of hundreds and sometimes thousands of positives, earning extra
‘stars’ and a coveted ‘Power Seller’ logo.
For the cautious there’s an extra safety net known as Escrow.
This is where the payment – usually for a high-value item -- is held, for a fee,
by a trusted third party and won’t be released to the seller until the buyer has
received and is satisfied with the goods. Payments made directly to traders by
credit card are also protected against fraud by credit card companies. Indirect
credit card payment methods, such as PayPal have only very limited protection,
however.
The system is largely based on trust and goodwill and for the
most part it works well but there have been a number of ‘scams’, and there’s
plenty of rogues and villains out there but if you are careful and follow a few
simple rules the chances of getting caught out are relatively small, and that’s
something we’ll be looking at next week.
Next week – Online Auctions part 2 – Buying and Selling
Tips
JARGON FILTER
FEEDBACK STARS
Feedback profiles of 10 to 49 positive feedback points earns
a yellow star, 50 to 99 points a blue star, 100 to 499 a turquoise star and so
on
PAYPAL
Instant credit card payment system whereby money is
transferred directly into a seller’s account. PayPal is free to buyers but
sellers pay a fee of between 3 and 5 percent.
USER ID
Name chosen by buyers and sellers, actual identities are
protected until the end of an auction
TIP OF THE WEEK
Although ebay is by far the biggest and best known online
auction but there are plenty of others on the web, including Yahoo Auctions (http://auctions.yahoo.com/), Amazon
Auctions (www.auctions.amazon.com)
Ubid (www.ubid.com) and
OnSale (http://www.onsale.com/). There are
also many specialist auction sites. For a comprehensive list go to http://www.online-auctions.net/
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