Page 68 - Introduction to Electronic Commerce and Social Commerce

46 2 E-Commerce: Mechanisms, Platforms, and Tools

Product Configuration (Self-Customization) marketing channels are ineffective or inefficient. For exam-
ple, e-auctions can expedite the clearance of items that need
A key characteristic of EC is the ability to self-customize to be liquidated or sold quickly. Rare coins, stamps, and
products and services, as done by dell.com, nike.com, or other collectibles are frequently sold at e-auctions.
jaguarusa.com. Manufacturers like to produce customized There are several types of auctions, each with its own spe-
products in economical and rapid ways so that the price of cialties and procedures. (For coverage, see en.wikipedia.
their products will be competitive. org/wiki/Online_auction.) Auctions can be conducted on
public auction sites, such as ebay.com, or on private auction
Questions and Answers Online sites, which may be “by invitation only.”

Intelligent search engines can answer users’ questions. A
leading engine is ask.com, a subsidiary of InterActiveCorp Dynamic Pricing
(IAC). The Q&A service matches answers from the database
to questions users ask. For details, see ask.com and answers. One major characteristic of auctions is that they are based on
yahoo.com. A competing engine is answers.com, a question dynamic pricing. Dynamic pricing refers to prices that are
and answer (Q&A) site, which comprises wikianswers.com. not fixed, but are allowed to fluctuate, and are determined by
Wiki Answers is a community-generated social knowledge supply and demand. In contrast, catalog prices are fixed, as
Q&A platform available in several languages. People ask are prices in department stores, supermarkets, and most
questions on the platform and the community answers them. webstores.
Another similar platform is answers.wikia.com/wiki/ Dynamic pricing appears in several forms. Perhaps the
Wikianswers. oldest forms are negotiation and bargaining, which have
been practiced for many generations in open-air markets.
The most popular today are the online auctions.
SECTION 2.4 REVIEW QUESTIONS

1. List and briefly describe the dimensions by which elec- Traditional Auctions Versus E-Auctions
tronic catalogs can be classified.
2. List the benefits of e-catalogs. Traditional, physical auctions are still very popular. However,
3. Describe an electronic shopping cart. the volume traded on e-auctions is significantly larger and
4. Describe voice- and vision-related search engines. continues to increase. In addition, person-to-person auctions
5. What is self-customization? are done mostly online.

Limitations of Traditional Off-Line Auctions
2.5 AUCTIONS, BARTERING,
AND NEGOTIATING ONLINE Traditional off-line auctions, regardless of their type, have
several limitations. They usually last only a few minutes, or
One of the most interesting market mechanisms in e-com- even seconds, for each item sold. This rapid process may
merce is the electronic auction. Auctions are used in B2C, give potential buyers little time to make a decision, so they
B2B, C2C, G2B, and G2C. may decide not to bid. Therefore, sellers may not get the
highest possible price; bidders may not get what they really
want, or they may pay too much for the items. Additionally,
Definition and Characteristics in many cases, the bidders do not have much time to examine
the goods before placing a bid. Bidders have difficulty learn-
An online auction is an electronic space where sellers and ing about specific auctions and cannot compare what is being
buyers meet and conduct different types of transactions. This offered at each location. Bidders must usually be physically
market mechanism uses a competitive process where a seller present at auctions; thus, many potential bidders are
solicits consecutive bids from buyers (forward e-auctions) or excluded.
a buyer solicits bids from sellers (reverse e-auctions). A wide Similarly, it may be difficult for sellers to move goods to
variety of online markets qualify as auctions using this defi- an auction site. Commissions are fairly high because a physi-
nition. Prices are determined dynamically by the bids. cal location must be rented, the auction needs to be adver-
Auctions, an established method of commerce for genera- tised, and an auctioneer and other employees need to be paid.
tions, deal with products and services when conventional Electronic auctioning removes or lessens these drawbacks.