Every coin has two sides and every event has positive as well as negative impacts. The same has been observed during the COVID-19 pandemic. When the whole world was struggling to protect itself from the virus, when businesses were getting shut down across the globe, some industries were innovating and making huge huge profits. The eCommerce industry is undoubtedly among them.
According to an article published by United Nations in May 2021, “Global e-commerce jumped to $26.7 trillion, fuelled by COVID-19.” The eCommerce giants came up with several sorts of innovative ideas to improve the supply chain without risking the lives of their customers. BOPIS, Click and Collect, Drone Delivery, Contact-less Delivery, and Omnichannel Shopping is among these innovations that have transformed the whole process of shopping.
Not just this, several unique niches are also emerging as the eCommerce boom continues. Bidding and Auction marketplaces are among these trending niches and entrepreneurs are leaving no stone unturned to encash this opportunity.
What is a Bidding or Auction Marketplace?
An auction or a bidding marketplace is a two-sided platform that connects buyers and sellers. Unlike the common eCommerce marketplaces, in an auction marketplace, sellers bid or compete for the product or service. The primary difference between a common marketplace and a bidding marketplace is that the seller sets a low bid instead of the fixed prices.
The auction sector saw exponential growth since the internet penetrated its operations. Online auctions can be classified into business-to-business (B2B), business-to-consumer (B2C), and consumer-to-consumer (C2C) auctions.
Business to Business Auction — B2B auction simplifies the access of the global target audience in real-time, shifts products in bulk, and maximizes their profitability. The B2B auction can be either product-based or service-based. For Product-based B2B online auction marketplace is usually on first price seal bid type of auction. Whereas service-based B2B online auction is operating on the reverse type of auction. One such product-based online auction marketplace is Saltrex for bulk international product auction.
Business to Consumer Auction — B2B auction has been the most famous type as it was focused on analyzing single-item auctions in isolation from the market. The B2C auction marketplace can operate on any business model of an online auction marketplace. The most common type of business model in B2C auction is the incremental type. One such example of a B2C auction is StockX — an online resale marketplace.
StockX is the world’s first online “Bid/Ask” marketplace, in which sellers place Asks and buyers place Bids. Before StockX even launched, the reselling process was complicated and too risky. People trade their sneakers on eBay or on some random Facebook groups. Because of the fact that there was no authentication process, buyers were constantly worried about getting duped online.
Read How StockX Works: Starting An Online Marketplace Like StockX
Consumer to Consumer Auction — C2C auction became prominent with the internet, making it possible for consumers to become sellers. The rating system allows trust and transactions between bidders in different geographical areas. Depending on the niche of the products in the marketplace, the business model can be decided by the marketplace owner. The most popular example of a C2C auction marketplace is eBay where consumers create a seller profile and auction the item on the portal.
Must-Have Features of an Online Auction Marketplace
- Real-time Bidding — people want to be updated about a bid when the product is live and participate in the bid in real-time. A marketplace must-have features to allow bidders to bid in real-time. Real-time updates of the bid and dynamic countdown help provide a seamless experience to the bidders.
- Encrypted User Information- Information about the bidders need to be kept encrypted by the marketplace owner to maintain a high level of security. Information regarding bid winners, personal information, payment information needs to be kept encrypted on an auction marketplace.
- Auction Selection — The Buyer Journey of a bidder needs to be seamless on the online auction marketplace. The user must be able to navigate to the items, select the item the bidder wants to bid on, and bid easily on the selected product.
- Auction Watchlist — After a bidder bids on a product, they want to keep a close tab on the product. To know whether the product is sold or still available for bidding. The marketplace should have a “My Bid” section where the bidders can check on the products they have bid on.
For Product Owners
- Advanced Analytics — An insight on sales figures, the number of bidders, traffic data is very important for the product owner before they can add another product to the marketplace. A marketplace must have advanced analytics to provide in-depth insights into the auctioned products.
- Responsive Vendor Portal — The product owner/ Vendor must have a dedicated and responsive portal to effectively manage product auction. A separate portal for vendors facilitates better product listing and bidding management.
- Automating Selection Process — The system should automatically select the winners of the auction according to the business model of the marketplace. The winning bidder must be sent an email automatically confirming the win and prompting further action for payment.
- Smooth Product listing — The system must allow merchants to upload detailed information about the products. A product attributes functionality that allows merchants to add Product Name, Product Current Bid Price, Time Left (Dynamic Countdown), Number of Bids Placed and Encrypted User ID.
For Website Owners
- Seller management — The admin or owner of the website needs to keep a track of the whole online auction marketplace. The vendors must go through a strict background check. To avoid any fraudulent activities on the marketplace, the seller onboarding must be well-managed by the system itself.
- Manage Auctions — The admin must have complete control of the marketplace, though the seller might be updating the product details, the admin must have control of editing the product listing. To maintain consistency in the marketplace, the admin can edit product descriptions, seller information, email content, bid increment, and everything else on the auction marketplace.
- Automatic invoice processing and generation — To reduce the amount of work for the admin, the marketplace must be well equipped with automatic payment and invoice management. The system must have payment gateways that process the winning amount to the vendor after deducting the admin commission. The Invoice of the payment should be automatically generated by the system when an auction is complete.
- Manage Bid Setting — The admin has the sole responsibility to set the bid settings. Before even starting the online auction marketplace, the entrepreneur first needs to decide the business model after which the bid setting needs to set accordingly. The incremental price, re-entry into the bid, allowing users to exit the bidding, and many more such settings need to be made by the admin.
Cost of Developing an Online Auction or Bidding Marketplace
Developing an auction/bidding marketplace like StockX or eBay from scratch requires a team of expert designers/developers, hundreds of thousands of development hours, and anywhere between USD $100K to millions of dollars in capital investment. Plus, there’s a maintenance fee, hosting fee, additional customizations, marketing cost, and a lot more.
Instead, it is recommended to choose a turnkey multivendor marketplace solution like Yo!Kart, whose pricing starts at $999 — a one-time license fee. Yo!Kart’s base package includes all standard-essential eCommerce features and integrations necessary to build an online marketplace like StockX and eBay successfully. It is a fully customizable multivendor marketplace software for aspiring business owners, startups, as well as enterprises to integrate new features/modules as per their business requirements and gain a competitive edge.
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Content source: https://www.yo-kart.com/build-online-auction-marketplace.html