NYIT MGMT 775 - Online Auctions Virtual Communities and Web Portals

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Chapter 6: Online Auctions, Virtual Communities, and Web PortalsObjectivesAuction OverviewEnglish AuctionsEnglish Auctions (continued)Dutch AuctionsPowerPoint PresentationOther Types of AuctionsOther Types of Auctions (continued)Online Auctions and Related BusinessesGeneral Consumer AuctionsSpecialty Consumer AuctionsConsumer Reverse Auctions and Group Purchasing SitesConsumer Reverse Auctions and Group Purchasing Sites (continued)Business-to-Business AuctionsBusiness-to-Business Auctions (continued)Slide 17Business-to-Business Reverse AuctionsSlide 19Auction-Related ServicesAuction-Related Services (continued)Slide 22Virtual Communities and Web PortalsSlide 24Virtual Communities and Web Portals (continued)Slide 26Intelligent Software AgentsVirtual CommunitiesVirtual Communities (continued)Slide 30Early Web CommunitiesWeb Community ConsolidationRevenue Models for Web Portals and Virtual CommunitiesSlide 34Slide 35Revenue Models for Web Portals and Virtual Communities (continued)Mixed Revenue Portals and Virtual CommunitiesInternal Web PortalsSummarySummary (continued)Chapter 6:Online Auctions, Virtual Communities, and Web Portals Electronic Commerce, Seventh Annual EditionElectronic Commerce, Seventh Annual Edition 2ObjectivesIn this chapter, you will learn about:•Origins and key characteristics of the seven major auction types •Strategies for Web auction sites and auction-related businesses •Virtual communities and Web portalsElectronic Commerce, Seventh Annual Edition 3Auction Overview•In an auction, a seller offers an item for sale, but does not establish a price•Bidders–Potential buyers•Bids–Prices bidders are willing to pay for an item•Shill bidders –Can artificially inflate the price of an itemElectronic Commerce, Seventh Annual Edition 4English Auctions•In English auctions, bidders publicly announce their successive higher bids until no higher bid is forthcoming•Open auction–Bids are publicly announced•Minimum bid –The price at which an auction begins•Reserve price–Minimum acceptable priceElectronic Commerce, Seventh Annual Edition 5English Auctions (continued)•Yankee auctions–English auctions that offer multiple units of an item for sale •Disadvantages–Winning bidders tend not to bid their full private valuations –Bidders risk becoming caught up in the excitement of competitive biddingElectronic Commerce, Seventh Annual Edition 6Dutch Auctions•Dutch auctions are also called descending-price auctions•Form of open auction in which bidding starts at a high price and drops until a bidder accepts the price•Often better for the seller•Good for moving large numbers of commodity items quicklyElectronic Commerce, Seventh Annual Edition 7Electronic Commerce, Seventh Annual Edition 8Other Types of Auctions•Sealed-bid auctions–Bidders submit their bids independently•Second-price sealed-bid auction –Highest bidder is awarded the item at the price bid by the second-highest bidder•Open-outcry double auctions–Buy and sell offers are shouted by traders standing in a small area on the exchange floorElectronic Commerce, Seventh Annual Edition 9Other Types of Auctions (continued)•Double auction–Buyers and sellers each submit combined price-quantity bids to an auctioneer•Reverse (seller-bid) auctions–Multiple sellers submit price bids to an auctioneer who represents a single buyer–Bids are for a given amount of a specific item that the buyer wants to purchaseElectronic Commerce, Seventh Annual Edition 10Online Auctions and Related Businesses•Three categories of auction Web sites:–General consumer auctions–Specialty consumer auctions–Business-to-business auctions•Largest number of transactions occurs on general consumer auction sitesElectronic Commerce, Seventh Annual Edition 11General Consumer Auctions•Most common format used on eBay –Computerized version of the English auction•eBay English auction–Allows a seller to set a reserve price–Bidders are listed–Bid amounts are not disclosed until after the auction –Allows sellers to specify that an auction be made privateElectronic Commerce, Seventh Annual Edition 12Specialty Consumer Auctions•Specialized Web auction sites meet the need of special interest market segments•Specialty consumer auction sites gain an advantage by identifying a strong market segment with readily identifiable products –Golf Club Exchange, Cigarbid.com, and WinebidElectronic Commerce, Seventh Annual Edition 13Consumer Reverse Auctions and Group Purchasing Sites•Reverse bid–Buyer can accept the lowest offer or the offer that best matches the buyer’s criteria•Priceline.com –Completes many of its transactions from an inventory –Operates more as a liquidation brokerElectronic Commerce, Seventh Annual Edition 14Consumer Reverse Auctions and Group Purchasing Sites (continued)•Group purchasing site–Seller posts an item with a price–As individual buyers enter bids, the site can negotiate a better price with the item’s provider–Posted price ultimately decreases as the number of bids increasesElectronic Commerce, Seventh Annual Edition 15Business-to-Business Auctions•Liquidation brokers–Firms that find buyers for unusable inventory items•Online auctions –Logical extension of inventory liquidation activities to a new and more efficient channel, the InternetElectronic Commerce, Seventh Annual Edition 16Business-to-Business Auctions (continued)•Ingram Micro –Major distributor of computers and related equipment to value-added resellers–Often finds itself with outdated items that it formerly turned over to liquidation brokers–Now it auctions those items to its established customers–Auction prices it receives average about 60 percent of the items’ costsElectronic Commerce, Seventh Annual Edition 17Electronic Commerce, Seventh Annual Edition 18Business-to-Business Reverse Auctions•The U.S. Navy and the federal government’s General Services Administration are experimenting with reverse auctions•The need for trust and long-term strategic relationships with suppliers makes reverse auctions less attractive in some industries•The use of reverse auctions replaces trusting relationships with a bidding activity that pits suppliers against each otherElectronic Commerce, Seventh Annual Edition 19Electronic Commerce, Seventh Annual Edition 20 Auction-Related Services•Auction escrow services–An independent party that holds a buyer’s payment


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