An innovation that came through with leaps and bounds of technological boom is the execution of online auction with the help of specialized auction software. Each one becomes a bidder provided they have an access to web. Highest bid price for a chosen item wins the online auction. Online auctions are conducted for days together. Hence, the time of placing the bid does not matter whereas the highest amount placed as a bid wins the auction. Online auction sites are only referred to as middlemen and they are not the original seller of goods. They act as a facilitator for the transaction to take place.
The sequential process involved in an online auction includes the registration of either the buyer or seller with the online auctioning website. The seller builds a listing for a specific product and inaugurates the auction. The seller also stipulates the duration of the auction and the minimum bid price. A buyer who looks out for a particular item through the listing states the maximum amount as a bid. This amount has to be comparatively higher when compared to the previously existing bids. The software begins bidding by taking into account the lowest amount necessary to put up the highest bid and the software never reveals the maximum amount mentioned by the bidder.
At the completion of an auction, the highest bidder and his winning bid is informed and requested for payment. The winner of the auction pays for the product. On receiving the payment, the seller transports the product to the buyer. The auctioning website precedes the payment to the seller and collects a small percentage as processing fee. Thus on the close of the auction, the buyer obtains the product of his choice, the seller receives the payment in return, the website receives a processing fee and both the buyer and seller provide a feedback about the auction.