New auction website, Bid World, claims it is poised to take on market leader eBay. With many people still struggling after the worst recession since the 1980s, selling unwanted items on bidding sites has become increasingly popular, the company says. Sellers benefit from the extra cash and buyers benefit from finding items they need at a lower cost than if purchased on the high street; it’s a win-win situation. Or is it?
As with any business, auction websites need to make money to survive. The current model adopted by eBay and other auction sites means that sellers may pay a listing fee plus a percentage of their selling fee. Basically the more successful the bidding process and the higher the value of the item, the more the auction site earns.
Since eBay’s launch niche sites such as Etsy Auctions, handmade and craft items and Bidz Jewellery Auctions have entered the arena. Still no one took on eBay but many adopted its business model, said Bid World. The weaknesses of new entrants to the online bidding market are not having a USP, other than their niche status, or a never ending marketing budget, the company claims. The result, they never became true competition.
Bid World claims its site is predicted to grow quickly because it offers customers the chance to list their items for a flat fee. Bid World charges a one off listing fee and doesn’t take a percentage of the seller’s income. That means that the seller gets more for the items they sell and in turn are more likely to charge lower prices or accept lower bids because they don’t lose a percentage upon sale; good news for buyers.
A spokesperson for Bid World said: “By not charging commission on the final sale price our sellers can charge a more competitive price so buyers benefit. Normal commission rates of final sale price for other auction sites range between 3%-13%. We charge a one off, low cost insertion fee to our sellers, allowing them to account for the listing cost up front.”