Confessions of an online auction addict
May 19, 1998
Web posted at 3:22 p.m. EDT
by Mark Tebbe
If you haven't tried a Web auction, you should. In response to my Internet-commerce
column two weeks ago, many readers wrote in to "inform" me about this
growing online phenomenon. They didn't really need to. I'm a regular
online customer at several auctions, and like many readers, I'm already
addicted to these services.
Although this form of purchasing started out as consumer entertainment,
corporations are joining the game for their own purchases and using
auctions as a new sales channel for their existing commodity products.
And given some of the new tools recently announced, this type of impulse
buying is bound to become even more convenient, targeted, and irresistible.
Done right, it will change the meaning of "suggested retail price."
For the uninitiated, here's how an online auction works. Visit the
site to see a listing of what's on the auction block. At OnSale, for
example, it's mostly sports stuff and computers they get refurbished
from manufacturers such as Sony, Dell, IBM, and Hewlett-Packard.
eBay caters to collectors who sell anything from old coins to cars
to timeshare vacations. Although there are many auction formats, each
sale item usually comes with a date and time when the auction will be
closed. You place a bid by clicking on the item you're interested in
and then filling out a form. The site will identify the current leading
bid for each item.
Frankly, this area is exploding. Together, OnSale and eBay sold more
than $250 million in products in 1997 and expect to significantly contribute
to the $1 billion projected for 1998 online auction purchases. What
explains this phenomenal growth? Addiction.
If you don't believe me, just ask Scott, my chief financial officer
at Lante. We have a love-hate relationship on this front. He is ecstatic
to learn that we now have a new source for well-priced computers, printers,
and supplies. We have bought both new IBM and refurbished Dell laptops
for somewhere between 25 percent to 60 percent off the current list
price. We have gotten refurbished color printers for 20 percent off.
We're not alone. I have seen bidders who are buying computers 30 at
a time -- I doubt they are buying them for home use. Although this channel
still has some support concerns (such as limited warranties), we play
it safe by only buying existing corporate standards.
Even so, Scott is frustrated. Why? Because I have become a corporate
treasure hunter. I have been known to purchase unplanned monitors and
hard drives simply because they were at a good price. My 21-inch NEC
color monitor for 25 percent of list price is a good example. Or let's
talk Microsoft (and not the Justice Department stuff). A new Microsoft
Intellipoint mouse can be bought for $22. Looking for Windows NT Workstation
4.0? How does $6.50 sound? NT Server? $126. And we're not talking one-offs
here. These products are available by the hundreds.
Online auctions may prey on impulse, but in most cases you still need
to take the first step, by visiting the site. However, recently released
technology from companies such as Narrative will now bring the sites
to you. Why go to the auction site when a subset can be targeted at
you? These same tools are also bringing sales sites like Eddie Bauer,
1-800-Flowers, and Procter & Gamble to you.
And the real beauty of these new interactive sales tools is that they
exist in a banner ad! That's right, you can buy a new pair of chinos
without ever leaving the Web site. Trust me, I have a pair of tan chinos
on route to me (you know, research for the column). Scott is just glad
that I didn't buy another monitor.
So if you bump into me at an online auction, all I ask is that you
kindly place your bid on a different item. If I don't keep finding bargains,
Scott may take away my purchasing privileges. And I need my daily auction
Do you use auctions for miscellaneous corporate purchases? Have you
investigated using this sales medium for your corporate commodities?
E-mail your comments to me.
Mark Tebbe is president of Lante Corp., a consulting and integration
company in Chicago that serves clients worldwide, including several
high-tech companies. Send e-mail to firstname.lastname@example.org.