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Auction on the Go

Why is eBay being pressed to jump-start growth in their core online auction business, and why did they have to negotiate freight rates with United Parcel Service for their merchants?

And why do online auctioneers raise shipping charges? If not, they merely get the entire blame for raising shipping charges, even though they transferred only the increment in freight resulting from gas price spikes. All the indications are that online sales have reached a plateau, and unless there is any breakthrough on the way, it is destined for a dead end.

Online sales slowing?

Online sales in the United States came to $116 billion as of end-2006, accounting for 5% of all the retail sales across the nation.  As recent as mid-June 2007, New York Times quoted two leading market research firms, Forrester Research and Jupiter Research, as saying the annual growth of online sales will slow to 7% in 2011 from the 2004 peak of 25%.

Will their market prediction come true? Or else will there be a major breakthrough that will prove the prediction wrong?

What about online auctioneers, like eBay, Overstock.com, Amazon.com and uBid? Are they bracing up for any new technology that will tilt the battleground to start a new round of joust. Do they just rely on outdated weapons of ancient history? Or do they plan to build a new arsenal for online sales?

Return of Pioneers

Pioneers are back in the battleground. And why? Michale Dell took over the reign of Dell Inc.,  and Jerry Yang takes over Yahoo.  Will their prowess on the battlefield work?  Dell computers are on Wal-Mart store shelves now, which is a significant departure from its traditional sales strategy.

During the era of Nikola Tesla, pioneers like Tesla used to die broke. Things have changed drastically since then. And nowadays pioneers don't hang around broke. Normally, they may have reaped a good harvest of revenue and are fabulously wealthy.  There abound hordes of angel investors, venture capitalists, investment bankers and private equity investors in search of fairly lucrative deals.

However, the return of pioneers like Michael Dell and Jerry Yang doesn't  have anything to do with hordes of venture capitalists or private equity firms. The returning pioneers have to deal with the market itself and competitors, and find a strategy to win over the hearts of consumers.  

Can Michael Dell Refocus His Namesake? -  New York Times

The pioneers should  not try to turn back the clock, but should learn how new technologies have changed the market, and what technology is emerging. Their best bets will be to check out if their core business has some technology content. If their core business has got all the sophisticated  marketing mix but without any technological breakthrough,  stakes are very high for them. If their technology arsenal is empty, their business may be destined for a buffalo jump or a techno limbo. By 2011, how many of the current market leaders do you think will  remain at the top?

Unicorn Classical Music Archive
Classical Music Archive

 Can you put a buffalo on eBay or a herd of them?

Stuck in Techno limbos 

Figuratively , some techno giants are being driven off a buffalo jump. And some others are stuck in techno limbos. A few will get out of techno limbos soon enough, but  a lot of them will remain there for some time. But those driven off a buffalo jump will never regain their past glory.

As the World Wide Web was the great invention of the century to start an Internet era, there will be another technological take-off in waiting. At the dawn of new technology breakthroughs, there are always some sort of Gotterdammerung in some segments of technology. It is a predestined process of "creative destruction".

Mobile technology is a new frontier

Mobile technology is in a nascent stage now, but will  soon see a sea change in this industry sector. Struggles between different formats and standards will start converging to a focal point sooner or later, and will witness a cladogenetic evolution into unheard-of segments.

In mobile technology, every techie is a newbie and it is a vast untrodden barren that portends to be a land of promise. In other words, not all of today's winners in mobile technology will be there in another 5 years. The reason is that there will be a big shake-up in telecom industry between 2009 and 2010, when a bumpy transition from 3G to 4G is  unavoidable.

Syncing real and virtual worlds is a key

If you can make a bid online and pick it up in real time, skipping multimodal delivery, there could be a new realm of online sales that comes with real-time feedback. This auction on the go will be location-based, and will create some momentum and agility.

Good and Bad of  Online Auctions

When online auctions first appeared on the web, it was  a brave new world. People were able to virtually go beyond borders in hot pursuit of what they needed by visiting the online auction sites like eBay.  In other words, the entire planet turned into a one whole flea market whose pricing mechanism was based on fair biddings by bona fide  buyers.  

The  flip side  is,  however, that  online auctions may easily  turn buyers into sellers on the spur of the moment.  While bona fide buyers and sellers do that, that is still good. But if there are some sort of logrollings among  groups of sellers/buyers, then online auction sites may be infected with shill bidding practices.

Auctions on the go, in the meantime, will be linked to  mobile technology  that will envision the real-time bridge between  virtual and real worlds in no time.  This real-time bridge  will eventually limit  the border-crossing nature of online auctions, but will move to localize auctions in each specialized field  to enable the same day pickup of merchandises auctioned off.

All of the above was written in 2007 and seems to be a bit outdated for now in mid-October 2008. Meg Whitman is gone from the eBay perch, John Donahoe, current CEO, is trying to shift away from the merely shill bidding type of business to move toward discount sales of goods. He might have to consider this new type of  business: auctions on the go, which will help sync the real world and cyber auctions in the years to come.

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