People and the Internet - Money Is No Object: A Quick Look At Online Auctions

About 35 million Americans participate in online auctions, according to a survey by Harris Interactive for the National Consumers League. The online site eBay handles roughly 70% of these transactions (the first eBay auction took place in 1995).

The panel shows the top sales categories on eBay according to research by Morgan Stanley. What category generated the most activity? Collectibles. You think no one on earth wants the set of ceramic orange pigs that Aunt Edna got you as a wedding present? Guess again. Think you'll never find a Captain Galaxy doll like you had when you were a kid? Guess again. Or bid again, as the case may be. These mementos and knickknacks are big business, and you may be surprised at what people will pay to round out their collections. And let's not forget the sellers: many generate handsome profits by selling items at multiple auctions.

But it isn't just the antiques or the one-of-a-kinds that get sold at the site. It offers electronics, jewelry, apparel, and books. eBay has, in short, turned into big business. It's also become sophisticated: the site is arranged according to categories and subcategories, and feedback on transactions is left by buyers and sellers. A high feedback rating often means that a seller gets more bids and better prices for his or her wares. But this comes with some peril: 41% of online auction buyers reported some problem with their transactions to the National Consumers League.

So, you may get a deal. You may find yourself in a bidding war with several people and have to reach deep in your pockets to get what you want.

But hey, isn't Captain Galaxy worth it?

Sources: Brown, Eryn. "How Can a Dot-Com Be This Hot?" Fortune, January 21, 2002, p. 78; ". 6 Million Americans Participated in Online Auctions; 41 percent of Buyers Encountered Problems, Survey Reports." US Newswire, January 31, 2001.