A virtual flea market, online auctions offer buyers and sellers a wide variety of goods from around the world. How do they work? Online auctions involve the seller offering one item or multiple lots of the same item. The same as a local auction, winners are expected to pay for what they bid on after the auction, but the similarities really end there.
For online auctions, it is required that participants register before buying or selling; this requirement allows the individual to track items they bid on or sell, keep up with the bids, determine the winning bid and build a database for feedback. Bidding for each auction closes at a scheduled time, and arrangements are made (typically via email) between buyer and seller for delivery of the item. There are two types of online auctions: business-to-person and person-to-person.
Ever-growing in popularity, online auctions are not just for small items – skyscrapers are also on the list. Recently, a 156m (511ft.) skyscraper in northern Shanxi province was listed on China’s largest e-commerce website, Taobao, by a local court. The 76,000 sq m repossessed building was set to go on the block on January 2 with a massive asking price of 553m yuan ($84m).
It would seem that the developer ran into funding problems after working on the project for several years. Construction began in 2006, with a projected completion date of 2011. Eventually, the skyscraper was seized by the Shanxi Provincial Higher People’s Court.
In a statement to Xinhua, Chinese state media outlet, Lu Weixing, general manager of Alibaba’s auction business, the parent company of Taobao, explained, “Online auctions help transparency in legal affairs because all information is there for all to see.”
Skyscrapers are not the only unusual item for auction online. Earlier this year, two Boeing 747 planes were successfully auctioned on Taobao, China’s equivalent to eBay. A 28-story high building was also put up for auction, though it did not sell. This auction page also lists other large buildings for sale, including malls and hotels.
Depending on the auction platform, online auctions provide buyers with several payment options, including: personal check, money order, cash on delivery, escrow services, cashier’s check, credit card and debit card. Keep in mind, however, that not all sellers and platforms accept all forms of payment.
Considered a risky business, online auction businesses typically struggle to secure the payment processing services they need to offer such payment options. Many seek alternative providers to secure high-risk merchant accounts (e.g. penny auction merchant accounts). Even so, the ability for skyscrapers and malls to be auctioned online proves how successful these platforms can be for buying and selling everything from usual, everyday items to the weird and wonderful.
Author Bio: Electronic payments expert, Blair Thomas, co-founded eMerchantBroker in 2010. His passions include writing/producing music, and travel. eMerchantBroker is America’s No. penny auction merchant company, serving both traditional and high-risk merchants.