Huge Disparity

With the economy suffering these days, those people that once thought they had it all are finding out just how fast it all can vanish. Brick and mortar resale shops and auction houses across the United States are reporting significant growth in business for the first half of 2009. People that once bought jewelery, art, and other collectibles are now selling these to generate liquid cash. Why are online auctions not growing at the same rate as the B/M businesses?

On Purpose

While eBay was once known as the leader in online auctions, that image has faltered mainly because of their own efforts. eBay’s data shows that buyers do not want to wait 7 days for an auction to end, that buyers want to see items, and buy them immediately. This according to previous statements by the online marketplace. So, eBay has intentionally diminished the exposure auction items receive in their default search engine settings know as Best Match which often favors fixed price listings (not always).

Onlineauction.com believes in the auction process and with a domain name especially favorable in search engines users still suffer from diminished exposure by the big search engines such as Google and Bing. Part of this is due to limited funding needed to buy key words on the search engines, some of it is due to lack of quality items in large numbers. If sites like Onlineauction can attract the quality auction sellers and buyers I think they may have a chance.

Fixed Price Niche Sites

Several sites like Bonanzle.com, Netspray.com Etsy.com, and others have shown good growth in the last several months, but these are not auction sites. These sites offer the fixed price or Best Offer sales model. Still a very good selection is available, and usually at very good prices. As I stated earlier these sites have seen good growth, yet still are lagging behind B/M resale shops.

Why Is This Happening?

One of the big issues online sites face is fear. eBay has suffers from a a few bad apples, fraudsters that only want to rip buyers off. eBay has worked very hard to combat fraud, but being the original flag bearer of online auctions makes it a huge target for both fraud and the news media. We all know that bad news sells so these are the stories we see on the news networks. This unfairly represents eBay’s sales as being riddled with bad transactions. I believe eBay still sees better than 99% of it’s sales ending in satisfied buyers and sellers. This is a phenomial number and I challenge any B/M store to see this level of satisfaction.

I also believe that a return to a more historic way of shopping is in play here. I feel that buyers are moving back to the days when they actually hold and feel the items they want to purchase. Antique malls are seeing a resurgance in sellers returning, consignment stores, auction galleries and pawn shops also are seeing this regrowth.

Bottom line, whether by design or by association, concerns over fraud must and are being addressed, and I feel that as the economy starts to rebound and reputations are rebuilt, we will again see growth in online auctions.

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