Online auctions have become a way of life for internet users. Websites like eBay have pioneered the concept of online auctions and people from all over the world have started buying and selling products on eBay. Compared to traditional e-commerce sites, the auction based e-commerce model has certain advantages:

Worldwide Access

The biggest downside of traditional e-commerce sites is that they are usually restricted to a particular geographic location. For example, an Indian buyer can only buy US products if he pays hefty international shipping, and there is a chance that the US seller does not offer international shipping. Online auction sites are the ideal ground for people to meet buyers that are from the same country or offer international shipping. For example, an Indian buyer can find other Indian sellers through online auction sites, something that was not possible with e-commerce sites.

Another advantage of online auction sites is that there are no geographic limitations whatsoever. People from all over the world can access online auction sites and buy and sell products and the reason for the phenomenal success of online auction sites is their amazing world wide coverage.

No time constraints

Since online auction sites are accessed by people from all over the world, there are no time constraints whatsoever. A user from India does not need to wait for the US office to open before putting up a product for auction. Similarly, a person does not need to wait to place a bid and like the forex market, online auction sites are open 24x7 the year round.

No restrictions on products

Unlike traditional e-commerce sites, auction sites are not restricted to a particular group of products. Users can buy and sell anything from teddy bears to cars on online auctions sites. Traditional, e-commerce cannot compete with online auctions sites as it would require a considerable amount of money to stock and store such a wide variety of products. Online auctions sites epitomise the term ?one stop shop?.

Competitive for both buyers and sellers

Online auctions are advantageous to both buyers and sellers. Buyers can find the most competitive deal possible. Most online auction sites have more than one seller offering the same product, and buyers can buy products from a seller that is offering the most competitive price. Similarly, a seller can choose to auction products at a minimum price and anything over and above the price is a bonus for the buyer.

Interestingly, a seller can choose not to sell a product if the minimum auction price is not met and many sites allow sellers to retract their auction if they feel the transactional will be ?counter productive?.