• Home
  • Business
  • The Global Environment Of E-Business: Online Auctions And Portals

The Global Environment Of E-Business: Online Auctions And Portals Essay Example

  • Category:
  • Document type:
  • Level:
  • Page:
  • Words:

Question 1

The four major costs incurred by consumers participating in an auction include; the first cost is delayed consumption costs which refer to the delays after spending the money to receive goods and start consumption. The second cost is monitoring costs where the consumer has to closely monitor the availability, the steps of purchasing which are traditionally bidding process where the highest bidder is considered the buyer of the product. The third cost is equipment costs; this includes the cost of the product, shipping costs and other cost related to the purchase of the product such as marketing costs upfront which is non-refundable and thus increasing the expenses of the process. The fourth major cost of auction consumers is trust and fulfilment cost, the consumer must trust the source of the product and thus a risk if the product does not live up to the expectations of the buyer. Fulfilment is thus as a result of the trust risk which may not be attained if the product is faulty or does not meet the expected quality ( Laudon & Traver, 2004).

Question 2

An auction aggregator is a service that is used to index the prices of the auctions or other items and later perform a comparison in a single platform like an online database or a web site. A web spider is used to gather the information about the prices of different items. The web spited is a simple program that browsers the internet and collects data or indexes. Since search engines such as Google work by implementing spiders to capture data and later display them for search queries. Spiders work by visiting the seeds URLs and later discover hyperlinks and add them to the already created list of URL to be visited later. Later, individual URL is revisited as per the policies of the program. By accomplishing this, spider collects data as per its programming capability and it does so rapidly (Jank & Shmueli, 2010).

An auction aggregator can also be referred to as computer program that search thousands of web auction sites and thereafter aggregate the information on the bids, products big increment, auction duration among others. This helps in providing users of online auction information on available auction and their respective costs.

Question 3

There are many types of products that are generally suited for auction market but some specific products are more suited than others and they include products that are unique or rare and unique and their prices are difficult to easily determine or rather discover and where there may have been non-existent market for such products. Such products may include products with short life time such as airline tickets, car rentals, hotel rooms, concerts and even sporting events. Originally, auctions have been used as a means of generating higher profits on products at the decline stage of their product life cycle. Such products could otherwise generate less profit if they are sold from liquidation sales option (Blecker, 2005).

On the other hand, currently products are being auctioned at the beginning of their life cycle (Development stage). This is mainly because of auction generates premium prices for from extremely motivated premature adopters. Such products include released music, DVDs, books, digital appliances, Video games and so forth. Such sales are especially common at the current online environment with the help of advanced technological tools that disseminates information about the availability of these products beyond borders. Auction aggregators and auction based online sites such as ebay.com and service auction such as Elance.com have enhanced the setting of considerable prices for these products as well as setting high demand for these products.


Blecker, T.(2005). Information and management systems for product customization. New York, NY: Springer.

Jank, W & Shmueli, G. (2010). Modelling Online Auctions. Michigan, MA: John Wiley and Sons.

Laudon, K. C & Traver, C.G. (2004). E-commerce: business, technology, society, Volume 1. New York, NY: Pearson/Addison Wesley.