Effectiveness Of Internet Auctions In The Growth Of B2B Markets

In the millennium of the start of the World Wide Web, a plethora of businesses are scrambling to opt-in to the advantage of changes in their markets. While the consumer end of the Web explosion has been much touted, it is the business-to-business (B2B) market that has quietly gone ahead the expectations. An important business model indulged responsible for the new market expansion is the Internet or Web auction. Businesses are adapting traditional auctions to the instantaneous `real-time' advantage of the Net to reach new markets that were previously cost-prohibitive through the reduction of transaction costs. Advantages such as the size and scope of the audience are giving Internet auctions a major role in the emerging global economy.

In a number of seminars where major industrial purchasers were present, B2B web-based auctions got to became apparent that complete e-Procurement strategies are a time-consuming task to define and implement. The second point was that the alignment of a whole purchasing department with electronic procurement is quite tiring and brings extra work. On the contrary, the desired effects of more efficient purchasing processes pay off only in the long run. However, it also became apparent that identifying the commodities with the high purchase amount and procuring them via auctions could significantly reduce the prices lost for these commodities. It is most important that leads should have a high and immediate return on investment. From that point of view, a starting set of requirements for online auctions was defined. It evolved and enhanced during the following session. In the following, the most important of these features have been described. Also, other technical issues of interest, such as commutable, ease of consumption, security, performance, robustness, and compatibility with existing systems.

• The usability of electronic resources invites the person who bids throughout the globe to participate in the auction conducted on websites and provides a result for more complex challenges, depending on the situation, and more specific auction formats. Long-term auctions might be lucrative for four weeks, throughout which the bidders repeatedly review the current bidding situation. But it appears that such auctions are of interest mainly during the closing phase. Short-term auctions concentrate on the last few hours immediately. They may even be as short as thirty minutes, provided that the participants are invited beforehand.

• Moreover, auction formats, for example, multi-round biddings, have been defined. In multi-round bidding, every bidder is forced to submit exactly one bid in every round. Every bidder is informed of their competitor's bids only after the round has ended, and the next round begins. Multi-phase auctions are quite equal; After every phase, only a subset of the previous bidders is admitted to proceed to the next phase.

Businesses are adapting traditional auctions to the instantaneous `real-time' advantage of the net to reach new markets that were previously cost-prohibitive through the reduction of transaction costs

• Recently, experience has been gained in conducting multi-dimensional auctions. Here, the price is left open and negotiated through the auction, and several other variables are determined, as well. For example, the price may be combined from the supplier and the logistics entrepreneur.

• In running Internet auctions, it became increasingly known that the auctioneer must be independent to ensure both supplier and buyer have enough confidence in the fairness of the auction process. The experiences with other marketplaces have shown, in an apparent way, which an auction marketplace is not very successful when operated by the buyers or sellers themselves.

"This is especially important for a short time, which is an approx of 30- minute auction, where the frequency of bids is relatively high"

Features of an Online Auction System
Electronic-Business Experiences with Web-Based Auctions provide to suppliers beforehand. They keep an eye on the suppliers' situation and they want certifications that prove the suppliers' capability of delivering high-quality material on time.
Online auctions, not withholding to, have proven their immediate effect. It is possible to a reduction of the price paid for commodities, as well as for materials and goods utilized for strategies, within hours, after only a few days of preparation. Most importantly, online auctions tackle a major part of the total cost of ownership, namely, material costs. Standard e-Procurement techniques focus more on internal process costs, merely seven percent of the total costs.

1. Software is an able conductor of online auctions, which are held for both the normal English format and the reverse format, thus allowing the auction of goods for buyers and demands for suppliers.

2. The intuitive graphical user interface can be accessed through the Web, which does not require any installation necessary. Being capable to support access to online auctions without any installation proved a great success factor, as it often is difficult to install new software within company networks.

3. Auctions are running in a real-time world. This means that clients always have current information visible. This is especially important for a short time, which is an approx of 30- minute auction, where the frequency of bids is relatively high.

4. An auction may consist of several slots, allowing the buyer to differentiate the material desired among a plethora of suppliers. This prevents dependency on a single supplier and enables the auction to split the material for different delivery points.

5. Different auctions may depend on each other. For example, on depending the results of simultaneous auctions, the consumer purchases percentages of competing materials. The auction system must reflect this dependency, e.g., with additional messages that describe which of the competing materials will be bought.

The residing numbers and forecasts indicate the B2B E-business will flourish even more in the following years. However, the techniques that the new economy offers must face the traditional fears and problems that the old economy -- and the people in that economy -- are still holding. Online auctions are one of the electronic sourcing techniques that will find their terra firms in the E-sourcing portfolio.