|From: Arts and Lifestyle | Technology
Sunday, March 05, 2000
Going, Going, Gonzo
are fancy tag sales
in the wild, wild West of E-commerce
By CHRIS ALLBRITTON
Daily News Staff Writer
nless you've been in a coma or living under a rock, you probably
know that online auctions are da bomb. eBay, Amazon and Yahoo! —
as well as a host of other smaller sites — are the centers of the
craze, with everything from celebrity memorabilia to entire vacation
resorts being offered to the highest cyberbidder.
Sreenivasan shows off some auction goodies to his wife, Roopa
According to MediaMetrix, a ratings firm that measures Web audience,
eBay is the granddaddy of online auctions, cinching the No.4 slot
of most popular E-shopping sites. It lists more than 4.2 million
items for sale, ranging from the extravagant — a 1946 Daimler limousine
owned by the Netherlands' Queen Wilhelmina for $24,000 — to the
mundane, including about 20 gag-lottery tickets from various sellers
at various prices, and a shrunken head from South America for $24.99.
All this makes online auctions a booming business.
According to Martin De Bono, senior analyst at http://www.gomez.com/, a site that
ranks and reviews online auction sites, about $4 billion in merchandise
will be sold in online auctions this year — almost $11 million every
day in swapped lava lamps, baseball cards and old books — with eBay
being the clear winner.
with some neat stuff he got online.
That's about the size of the old-fashioned auction market — $4
billion — controlled by the two great international auction houses,
Sotheby's and Christie's, who landed in hot water with the U.S.
Justice Department in February for alleged collusion in setting
selling and buying fees, which are determined by complex sliding
The Net has even attracted Sotheby's, which invested $40 million
to create two online auction sites in 1999 — one with Amazon.com,
and another brand-name site run by the house. Christie's said it
would not follow suit. But don't let the pox on these two houses
scare you off online auctions. The two auction worlds hardly intersect.
In contrast to the high-profile art and celebrity memorabilia sales
by the estates of Jacqueline Kennedy Onassis or Marilyn Monroe,
few people will buy truly valuable works of art online. High-ticket
auction items need to be examined by the buyer to gauge their quality
and condition. Online auctions are more like country livestock sale-fests.
Well, okay. Is this why E-auctions are so popular?
"It's very entertaining," says De Bono. "Whatever your hobby, you'll
be able to find an auction that caters to your interest."
There's also a community feeling, with hundreds, or thousands,
of fellow pack rats engaged in bidding. And don't forget the idea
of shopping as sport. Auction enthusiasts will tell you there's
little to compare with the excitement of placing the winning, or
high bid on a particularly rare tchotchke.
Online auctions are even changing language. Like "Xeroxing," the
proper name "eBay" is quickly being morphed into a generic verb.
"When my wife finds a priority-mail box at home, she says, 'Oh
no. You've been eBaying,'" says Sreenath Sreenivasan, a professor
of journalism at Columbia University's Graduate School of Journalism,
who buys antique magazine covers about his native India and sells
books and other items to raise funds for a scholarship program run
by the South Asian Journalists Association.
Sreenivasan uses all three major auctions and each has its advantages,
he says. eBay has the biggest user base; Amazon.com has what's called
the Amazon-Payment program, which helps sellers by automatically
charging the buyer's credit card on record with Amazon. After the
company takes its cut — 25 cents per transaction plus 2.5% of the
transaction amount — Amazon.com sends the seller a check. And Yahoo!
offers another huge customer base, although not as large as eBay's.
"I'm very happy," he says. "It's a great example of technology
working for the everyday guy."
Real vs. Virtual Auctions
If you're thinking of buying or selling something online, there
are things you need to know before you begin.
Basically, an auction is just "the method of selling by which property
passes from the seller to the buyer at the highest price offered
in a public forum," according to The Complete Guide to Buying and
Selling at Auctions. It's an old economic model, with records stretching
back thousands of years. But until recently, they have been local
affairs where buyers were able to examine, touch and otherwise paw
the merchandise before the bidding started.
At the high-end auction houses, experts evaluate the worth of items
in advance and furnish the provenance or history of valuable objects
in a pre-published sales catalogue. The expert judgment on the item's
historical importance, rarity and authenticity is accompanied by
high and low estimates of the price the house expects the item to
Online auctions are different. First off, this is the Net — it's
Second, you're not likely to find many rarefied art offerings.
And lastly, these auctions go on all the time. You're not limited
by location or time, and once you register at the sites, you can
have the site track your auctions automatically.
Five for the Money
Before you get started, you need to understand the features of
- In reserve-price auctions, the seller sets minimum prices that
are not revealed to buyers. If there is no bid equal to a reserve
price, the item does not sell. Of course, the buyer can always
contact the seller after the auction is over and negotiate a new
price if he or she really wants that pack of baseball cards.
- In an open-reserve auction, the starting price of the bidding
- In a Yankee auction, items are usually sold in lots rather than
individually, although lots can be split up (at the seller's discretion).
Usually, the highest bid for the lot wins.
- Dutch auctions are really weird. The best way to explain how
these work is by using the following example: say you have 12
Beanie Babies for sale, each with a $25 reserve in place. There
are 100 bidders. The 12 highest bidders pay the lowest price bid
over the $25 reserve.
- Private auctions come in plain brown wrappers. Often used to
sell adult items, bidders' e-mails aren't revealed nor is bidding
displayed. When the auction is complete, only the seller and high
bidder are notified. eBay offers a large selection of adult material
that is often sold in this way.
Although there are dozens of auctions online in addition to the
Big Three — eBay, Yahoo! and Amazon — they all work more or less
the same way.
First you register by selecting a user name and a password, and
of the site carefully! If you're registering with a site that sells
directly to you, instead of connecting citizen buyers and sellers,
you may be asked to provide a credit card number.
You view items up for auction by either browsing through the category
listings or doing a specific search by entering keywords in the
search box. Once you've found something you must have, place your
bid using a form at the bottom of the Web page for the individual
item. If you're the high bidder, you'll be put at the top of the
list as the person to beat.
Now you can track your bid. Some sites, like eBay, send you automatic
e-mail when you've been outbid. On others, you have to check back
occasionally. There are even software programs, such as AuctionTicker,
that will track your bids automatically.
If you end up placing the winning bid, you pay for your item and
make shipping arrangements directly with the seller, who will tell
you how much the shipping — and insurance, if any — is, and where
to send the payment.
Selling is a little different. After you register, you "post" your
item, which means describing it in an online form on the site, maybe
adding a picture. You can specify how long the auction will last,
with eBay letting you choose a three, five, seven or 10-day auction.
There are no hard rules on how long you leave an item up for sale
— make your best guess.
Next, you set what the minimum acceptable price, or reserve, will
be, if any.
Then you wait for bids to come in. Once the auction ends, and your
minimum bid is met, the buyer pays you — usually in the form of
a cashier's check or money order — and YOU pack and ship your item
to the buyer. It's a good idea to insure it and ship it in a way
that allows you to track it.
Fraud and Junk
This all sounds easy, but how do you avoid fraud? And if you have
a bad experience, what can you do about it?
There are various ways of protecting yourself against fraud, including
escrow services and rating systems that let you see what others
think of sellers and buyers. But, as with most things on the Net,
or in life, there are no guarantees.
"My purchase through eBay was one that I probably would never make
again," says Arul Sundaram, in charge of business development at
Community Connect Inc. He bought some skis from a seller upstate,
and while they were fine skis, it took three weeks for them to arrive.
"And it cost me more to have the skis shipped to me than the skis
themselves cost," he says. "Overall, I think I'll go to a ski swap
or a store next time."
eBay's feedback system is the way to lodge a complaint if someone
doesn't do business in a respectable manner. Feedback takes the
form of stars or numbers next to a person's name. Click on the ratings
and you get a complete list of recommendations for, or against,
any person who has previously participated in an auction. If you
see a lot of negative comments, you might not want to do business
Professor Sreenivasan, for instance, is very proud of his 18 positive
recommendations from other eBayers with whom he has done business.
He has no black marks on his record.
This feedback is important because it's there for every auction
bidder. If the seller has a record of not delivering the goods or
sending an item that isn't the one auctioned … well, hell hath no
fury like eBayers cheated.
"RIP OFF!!!" wrote one irate buyer. "200.75 DOLLARS WORTH OF CRAP!!!
WON'T ANSWER E-MAIL PACKING CRAP!!!"
Amazon.com also offers a feedback and rating system very similar
to eBay's, but also has an "A-to-zGuarantee." This allows buyers
to petition Amazon.com for a full refund after jumping through multiple
hoops, which entail:
A) Waiting 30 days after the sale.
B) Being a resident of the United States, Britain or Germany.
C) The seller's feedback rating is above 3 out of 5.
Buyers are also limited to three lifetime claims, but if you're
particularly gullible, perhaps you shouldn't be buying things on
the Net anyway.
Yahoo! offers a rather anemic rating system and then cheerfully
steps back and washes its hands of disputes. It does post the telephone
number for the national Better Business Bureau in Washington, D.C.,
if "talk it over" doesn't work.
"I've had some discouraging problems with sellers," says Tom Polley
of Manhattan. "Either they don't ship the stuff fast enough, or
it's broken, or you have to hound them to actually send the crap
to you. You'd think they'd be delighted to get rid of those [Charlie
the Tuna] lamps, but apparently not."
One solution: a third-party escrow payment service, which should
be familiar to anyone in New York with a bad landlord. Of course,
the escrow company takes a fee of about 6% for purchases up to $500
and 4% over $2,500 — the upper limit.Lest all this sound confusing
if not downright perilous, it seems that online auctions are here
to stay, with the market for other people's attics estimated at
$6.5 billion next year, according to Gomez.com.
"Basically, eBay and other auction sites are fun in the same way
that a tag sale is fun — you get to see the junk other people accumulate,
and you might even pick some of it up if it's cheap enough," says
Polley. Does he have any regrets after he went through a bit of
eBay mania of his own?
"My greatest auction regret is that I was outbid on that Russian
submarine that was up on eBay a few months ago," he says. "Man,
did I have plans for that!"