Joyride Through Cyberspace By Caroline Wright
Part I: Bidding On The Edge
from the Internet Gazette, June 1999

One recent Saturday, I found myself, for the very first time in my life, at an auction. My friend Morgan, a longtime Luddite who still refuses to use voice mail, had finally decided that his career as an artist would only be enhanced by the addition of computer graphics to his skill set. Morgan asked me to help him find the Mac of his dreams. After a short but thorough search, and with some help from Teaflax, another artist buddy and a devoted Mac user, I finally found the perfect machine for my friend.

It was being offered for sale at auction, and Morgan asked me to place an absentee bid on his behalf. Though other people had placed bids on the system, ours was still the highest. My palms were moist with tense excitement. Anxiously, I watched the final minutes tick down. The auction would be over in just a few short minutes!

Gripping the phone between ear and shoulder, I looked around for other bidding activity for the computer, and was happy that I didn't find any. As Morgan and I discussed the auction in hushed tones, his excitement matched mine.

Suddenly, my heart leapt into my throat. "Morgan, there's a new bidder!" I gasped. "And he just exceeded your maximum! What do you want me to do?"

I heard the clickety-clack of the mental abacus as Morgan calculated his willingness and ability to pay more for his coveted prize. "Hmmm... tell me again about those peripherals?"

The seller was offering a peripheral package, in addition to the system being sold at auction. I breathlessly read the list of components to my friend. "Morgan, I just heard from Teaflax, and he thinks this sounds like a helluva deal. Seller says it's a value of almost $1,900, but the winning bidder can take it all for $1,400."

Morgan took a deep breath. "Okay, then, let's do it! Raise my maximum bid to $2,000, and we'll see what happens."

Five minutes later, my friend was the proud owner of a slightly used Mac G3 computer with more bells and whistles than Spike Jones, and a sweet peripheral package that included a big monitor, scanner, printer, and CD burner, for a total cost of about three thousand dollars.

Triumphantly, I stood up and shook the kinks out of my legs. The auction had been a wonderful success, but I was exhausted. My back ached, my throat hurt, and I needed a couple of Tylenol. And no wonder! I had been sitting at my own computer, buying a Mac for Morgan, for almost seven hours.

I've Got Ten; Do I Hear Twenty?

Online auctioning is one of the hottest markets in e-trade today; new players seem to be entering the game on an almost-weekly basis. From archery equipment to Zippo lighters, one can buy almost anything at this network of giant virtual flea-markets. Recent oddities up for bid include a painting of a smoking monkey rendered in timeless black velvet, a hundred-year-old framed prescription for morphine suppositories, and a 68-ft. luxury cockpit motor yacht.

eBay, the oldest auction site, started in 1995, and its immense popularity quickly became a benchmark of success for hundreds of other auction sites as they came online. As projected by Forrester Research Inc., this $1.4 billion business will become a $19 billion business by 2003 - that's growth of more than a thousand percent in just five short years!

How It Works

There are two different types of online auction: the Yankee auction and the Dutch auction. In both, buyers register at the site, choose an item, and place a bid. The items sold in Yankee auctions carry a minimum bid; buyers place their bids and then wait until the auction has ended to find out who has "won" the item. In Dutch auctions, which seem to be less common, sellers set prices for their items and then wait for buyers to bid. The prices drop at regular intervals until the item is finally sold; the first bid to match the price wins. Successful Dutch auction participants wait long enough to get a good price, but not so long that they lose the deal.

Online auctions are usually free for buyers, who pay only for the items they purchase, plus shipping and insurance, if desired. Sellers are usually charged a fee of some sort, which varies from site to site. Only a few auctions are completely free to both buyer and seller - and their popularity, quite understandably, is growing.

Bidder, Beware!

Online auction giant eBay came under fire this past January, when the New York City Department of Consumer Affairs (DCA) announced its plan to investigate alleged fraudulent transactions at eBay and other online auction houses. Claiming zero tolerance for fraud, eBay cited a number of precautionary practices and devices on its website. As middleman between buyer and seller, eBay urges unhappy consumers to take action against fraudulent sellers, and maintains a "buyer beware" stance on goods sold. Several enhancements were recently added to its antifraud security features, including an enhanced feedback forum area, tougher deadbeat bidder and shill policies, clarification of illegal items that cannot be sold on the site, and strengthened antipiracy and anti-infringement protection.

One of the most astonishing things about online auctions is the mutually high level of trust required by both buyer and seller. Though many sites offer a feedback area in which participants can comment on the integrity of their fellow buyers and sellers, online auctioneering still requires a big leap of faith. Sellers depend on buyers to follow through on their winning bids, sending payment promptly for items purchased. Buyers have a good bit more exposure: they must send payment for goods not yet received to a seller they've never met.

Unfortunately, a few rotten apples have compelled bad press and fraud probes. But most sellers, thank goodness, are on the up-and-up.

Please join me next month in Part II of Bidding on the Edge, as we continue to explore the online auction phenomenon.


Caroline Wright, of WRIGHT FOR YOU Word Services, is a freelance writer. A former resident of Hawaii, she now lives in rural South Carolina. Feel free to e-mail your comments to Caroline at cw@wrightforyou.com.