Back in the days when you wanted to buy something you had to go and meet the seller face to face to negotiate a deal. Now we have the internet. An electronic environment that supports e-business between sellers and buyers, which takes place on an electronic marketplace. It is an electronic commerce which occurs business to business, business to consumer, or consumer-to-consumer. It has four different models:
- Bilateral negotiation model: when there is one seller and one buyer present.
- Sales auctions model: when there are many buyers and just one seller.
- Double auction model: when there are many buyers and many sellers
- Reverse auction model: when there is just one buyer and many sellers
How do electronic markets and auctions compete?
First of all the businesses that offer an auction or a marketplace compete on design features. With these features they can make it easier and more pleasant for the customer, who can be a buyer or seller, to use their service. Better features gathers more users. Secondly these businesses compete on the volume of their user base. This volume of users is an advantage for the buyers as well as the sellers. A lot of buyers will attract more sellers, because it will be easier to sell their product. A lot of sellers will attract more buyers because there are more products to choose from. For auctions the user base is important for their income. This income leads to the offering of more products and thus getting more commision in total.
Marktplaats.nl vs Vakantieveilingen.nl
On Marktplaats.nl sellers place a product or quantity of products for sale and buyers bid on these products. The sellers can decide from where on the buyers can bid on their product(s). If they’ve got a minimum price that they want to receive for their product, they can set a minimum bidding level. On the other side we have Vakantieveilingen.nl. Vakantieveilingen.nl places a product or quantity of products for sale and buyers bid on these products. Only here the auction starts and ends at a pre-set time. There is only one winner which is the one with the highest bid when the auction ends. Within this period of time, buyers can bid on the specific product(s). Vakantieveilingen.nl also uses an English auctioning., and buyers can see the bids of other buyers, called open bidding. Vakantieveilingen.nl makes money with commissions that they earn on products that are sold via their auction platform. For example when a teddy bear is auctioned via their auction, a percentage of the price that is paid by the customer goes to Vakantieveilingen.nl. Marktplaats.nl earns their profit in multiple ways. They do this by selling ‘standard’ and ‘premium’ advertisement options. Marktplaats.nl also sells paid features such as a ‘has to go’ sticker’ or an URL in the advertisement. On Marktplaats.nl second-hand car sellers are obliged to pay to post an advertisement, and last but not least they make money on external ads.
