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Chapter 23. Creating Online Auction Stor... > What Are Online Auctions and Why Are...

What Are Online Auctions and Why Are They So Popular?

Online auctions use the power of computers and the Internet to create a dynamic market in which individuals bid on items. Keenan Vision, an e-commerce market consulting company, estimated that the volume of auction-based or market-priced Internet commerce transactions is now close to $4 billion annually. The company predicts that this amount will grow to more than $120 billion and nearly 30 percent of the market by the year 2002.

Auctions are popular on the Web for several different reasons, but primarily because the process of participating in an auction is fun and auctions usually focus on unique or rare items. Web auctions are also popular because the Web has made it easy for people to access auctions—previously rare, real-world events than most people had never attended. Finally, auctions are, in theory, designed to give sellers a good chance of getting a very bearable selling price for items that might lack a specific, fixed value. Bidders hope to find a few bargains in cases where the demand for an item is soft enough that, in their mind and perhaps in actuality, they pay below the potential final value of the item.


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