Auctions, Bartering, and

Negotiating Online
• Definition and Characteristics –
o online auction - forward e-auctions Vs reverse e-auctions
o electronic space: sellers and buyers meet and conduct transactions.
o a competitive process
• a seller solicits consecutive bids from buyers (forward) or
• a buyer solicits bids from sellers (reverse ).
o Dynamic Prices
o deal with products and services when conventional marketing channels are
ineffective or inefficient. (items need to be liquidated ).
• Rare coins, stamps, and other collectibles
o Types
• public auction sites (ebay.com)
• private auction sites(by invitation only)
 Auctions, Bartering, and
Negotiating Online
• *Dynamic Pricing
o Refers to prices that are not fixed, but are allowed to
fluctuate, and are determined by supply and demand.
o Vs fixed price - catalog prices as in most webstores.
o Several forms.
• oldest : negotiation and bargaining.
• today : online auctions.
 Auctions, Bartering, and
Negotiating Online
• Traditional Auctions Vs E-Auctions
o Traditional – offline auctions
• physical auctions are still very popular.
o e-auctions
• the volume traded on e-auctions is significantly
larger and continues to increase.
• person-to-person auctions are done mostly online
 Auctions, Bartering, and
Negotiating Online
• Limitations of Traditional Offline Auctions
o rapid process
• a few minutes, or even seconds, for each item sold.
• give potential buyers little time to make a decision,
so they may decide not to bid.
• Commissions are fairly high because a physical
location must be rented, the auction needs to be
advertised, and an auctioneer and other employees
need to be paid.
 Auctions, Bartering, and
Negotiating Online
• Limitations of Traditional Offline Auctions
o sellers
• may not get the highest possible price;
• difficult to move goods to an auction site
o bidders may
• not get what they really want,
• pay too much for the items.
• do not have much time to examine the goods before placing a bid.
• must usually be physically present at auctions; thus, many
potential bidders are excluded.
o E-auctioning removes or lessens these drawbacks.
 Auctions, Bartering, and
Negotiating Online
• Electronic Auctions (e-auctions)
o The Internet provides an infrastructure
o lower cost, support services, more participating (sellers, buyers).
Individual as well.
o Host sites on the Web, which were started in 1995, serve as brokers,
offering services for sellers to post their goods for sale and enabling
buyers to bid on those items.
o B2C - eBay: offer electronic parts, artwork, vacation packages, airline
tickets, and collectibles
o B2B online auction:
• used to trade special types of commodities, such as electricity
transmission capacities and gas and energy options
Auctions, Bartering, and
Negotiating Online
• Types of Auctions
obased on how many buyers and
sellers are involved
 Auctions, Bartering, and
Negotiating Online
• Types of Auctions
o One Buyer, One Seller
• one can use
o negotiation, bargaining, or bartering.
• Price
o will be determined by each party’s bargaining
power, supply and demand in the item’s market, and
(possibly) business environment factors.
 Auctions, Bartering, and
Negotiating Online
• Types of
o One Seller, Many Potential Buyers
• *Forward Auction - auctions
• Seller entertains bids from multiple buyers.
• Types
o English and Yankee
• bidding prices increase as the auction
progresses
o Dutch and free-fall
• bidding prices decline as the auction progresses
 Auctions, Bartering, and
Negotiating Online
• Types of Auctions
o One Buyer, Many Potential Sellers
• Two types
o Reverse Auctions (bidding or tendering system
o The Name-Your-Own-Price Model
 Auctions, Bartering, and
Negotiating Online
• Types of Auctions
o One Buyer, Many Potential Sellers
• Reverse Auctions
o bidding or tendering system
o The buyer
• places an item he or she wants to buy for a bid (or tender) on a
request for quote (RFQ) system.
o Potential suppliers
• bid on the item, reducing the price sequentially
o In electronic bidding in a reverse auction
• several rounds of bidding may take place until the bidders do not
reduce the price any further.
• The winning supplier is the one with the lowest bid (assuming that
only price is considered).
o primarily a B2B or G2B mechanism.
The Reverse Auction Process
 Auctions, Bartering, and
Negotiating Online
• Types of Auctions
o One Buyer, Many Potential Sellers
• The Name-Your-Own-Price Model
o Priceline.com pioneered the model .
o Buyer
• specifies the price (and other terms) that he or she is willing to pay to any
willing and able seller.
o For example: Priceline.com
• presents consumers’ requests to sellers, who fill as much of the guaranteed
demand as they wish at prices and terms agreed upon by buyers.
• The sellers may come up with counter offers managed by Priceline.
• Alternatively, Priceline.com searches its own database that contains the
participating vendors’ lowest prices and tries to match supplies with requests.
o This is basically a C2B model, although some businesses also use it.
 Auctions, Bartering, and
Negotiating Online
• Types of Auctions
o Many Sellers, Many Buyers
• double auction
• Buyers and their bidding prices are matched with sellers and their
asking prices based on the quantities on both sides.
• Stock and commodity markets.
• Buyers and sellers may be individuals or businesses.
 Auctions, Bartering, and
Negotiating Online
• Types of Auctions
o Benefits of E-Auctions
• E-auctions enable buyers to access goods and services anywhere
auctions are conducted.
• perfect market information is available about prices, products,
current supply and demand, and so on.
• The auction culture seems to revolutionize the way customers buy,
sell, and obtain what they want.

• next
 Auctions, Bartering, and
Negotiating Online
• Types of Auctions
o Limitations of E-Auctions
• Minimal Security (unencrypted environment)
• Possibility of Fraud
• Limited Participation
Auctions, Bartering, and
Negotiating Online
o Minimal Security
• not secure because most are done in an
unencrypted environment.
o credit card numbers can be stolen.
• Payment methods such as PayPal
(paypal.com) can be used to solve the
problem.
• some B2B auctions are conducted over
highly secure private lines.
 Auctions, Bartering, and
Negotiating Online
• Possibility of Fraud
o fraud rate in e-auctions is relatively high
o Buyer
• may receive
o something different than he/she had in mind.
o products may be defective.
• commit fraud
o receiving goods or services without paying for
them
 Auctions, Bartering, and
Negotiating Online
• Limited Participation
o Causes
• Some auctions are by invitation only;
• others are open only to dealers.
o Disadvantage to
• Sellers: who usually benefit from as large a pool of
buyers as possible.
• Buyers: if they are excluded from participation
 Auctions, Bartering, and
Negotiating Online
• *Bartering - exchange
o oldest method: exchange of goods and services,
o Today: it is done primarily between organizations.
o The problem: difficult to match trading partners.
o Intermediaries: helpful, expensive (20–30% commissions)
and very slow.
Auctions, Bartering, and
Negotiating Online
o *E-bartering (electronic bartering)
• Bartering conducted online
• Improved: by attracting more partners to the barter.
• Matching: faster, better matches can be found.
• Online bartered items:
o office space, storage, and factory space; unused
facilities; and labor, products, and banner ads.
Auctions, Bartering, and
Negotiating Online
o *Bartering exchange
o a marketplace where an intermediary arranges the transactions.
o works like this:
• First, the company tells the bartering exchange what it wants
to offer.
• The exchange then assesses the value of the company’s
products or services and offers it certain “points” or
“bartering dollars.”
• The company can use the “points” to buy the things it needs
from a participating member in the exchange.
• virtualbarter.net , barternews.com
 Auctions, Bartering, and
Negotiating Online
• Online Negotiating
o Dynamic prices mechanism
o Negotiated pricing
• is commonly used for expensive or specialized products.
• popular when large quantities are purchased.
• result from interactions and bargaining among sellers and
buyers.
• Deals with terms
o the payment method, timing, and credit.
• A simple peer-to-peer (P2P) negotiation
o ioffer.com.
 Emerging EC Platforms: Augmented
Reality And Crowdsourcing
• *Augmented Reality
• AR
• definitions
o depending on its field of applications.
o is “a live or indirect view of a physical, real-world environment whose elements are
augmented (or supplemented) by computer-generated sensory input such as sound, video,
graphics or GPS data”
o helps people enhance the sensory perception of reality.
o The computerized layer
• smartphones, webcams, or 3D glasses (including 3D TV). Google developed augmented
reality (AR) glasses called “Google Glass.”
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 Emerging EC Platforms: Augmented
Reality And Crowdsourcing
• *Crowdsourcing
ofor collective intelligence in e-
commerce and social commerce
Emerging EC Platforms: Augmented
Reality And Crowdsourcing
o Definitions and Major Concepts
o Crowd: a large group of people such as a group of consumers, employees of a corporation,
or members of a social network who offer expertise.
o Crowdsourcing
• utilizes crowds to
o solving problems, innovating, or getting large projects completed by dividing the
work among many people.
• Process:
o the initiator recruits a crowd
o based on the idea that two heads are better than one.
• The collective intelligence of large groups is assumed to be able to solve complex
problems at low cost
• Elements:
o the task(s) to be carried out (technologies);
o the crowd (psychology ), which is used to work on the task; and
o the models and processes used by the crowd to execute the task (implementation).
The Elements of Crowdsourcing
 Emerging EC Platforms: Augmented
Reality And Crowdsourcing
• Uses of Crowdsourcing in E-Commerce
• Webbased activity
o problems are broadcasted either to a known crowd or to an unknown group of
participants.
o The communication usually starts as an open call for solutions or ideas.
o The members of the crowd are organized as an online community, and the members
submit individual work (e.g., solutions).
• The crowd may also discuss the solutions and may vote for a final short list.
• Alternatively, the short list is then prioritized (e.g., ranked).
o The final selection can be made by the crowd or by management
• The winning individuals in the crowd are well compensated, either monetarily or
with special recognition.
• can yield results from amateurs or unrecognized
professionals.
A Typical Crowdsourcing Process
The Future: Web 3.0, Web
4.0, and Web 5.0
• Web 3.0: What Does the Future Hold?
o Web 2.0 is here. What’s next?
• focuses on people
o Web 3.0
• the future wave of Internet applications.
• focus on machines
• facilitate EC
The Future: Web 3.0, Web
4.0, and Web 5.0
• Web 3.0: What Does the Future Hold?
o deliver a new generation of business applications
that will see business and social computing
converge.
o could change the manner in which
• people live and work
• organizations
o revolutionize social networking
o Capabilities - next
The Future: Web 3.0, Web
4.0, and Web 5.0
• Web 3.0: What Does the Future Hold?
o Web 3.0 Capabilities
• Make current applications smarter by introducing new intelligent features.
• Provide easier and faster interaction, collaboration, and user engagement.
• Facilitate intelligent-based powerful search engines.
• Provide more user-friendly application–creation and human–computer
interaction capabilities.
• Increase the wisdom and creativity of people.
• Enable smarter machines (Gartner 2016).
• Enable much wider bandwidth.
• Enable better visualization including 3D tools.
• Simplify the use of mobile computing and mobile commerce.
The Future: Web 3.0, Web
4.0, and Web 5.0
o Web 3.0 and the *Semantic Web
o Semantic Web
• Semantic - meaning
• the platform for making the Web smarter. There is no
standard definition of Semantic Web.
• focus on machines Vs focuses on people.
o The technology attempts to enable computers to
understand the meaning of information
o by using natural language understanding tools.
o youtube.com/watch?v=bsNcjya56v8.
The Future: Web 3.0, Web
4.0, and Web 5.0
• Concerns - Future threats.
o Security and privacy concerns. Shoppers, as users of e-banking and
other services, and members of social networks, worry about online
security and privacy.
o Lack of net neutrality.
• big telecommunications companies Vs small Web
• Copyright and the legal problems
o Insufficient connectivity. Upstream bandwidths are still constraining
applications, making uploading of video files a time-consuming task.
o Language fitness. There will be a need to reconsider the existing
spoken languages with Web 3.0 taxonomies and schemes.
o Standards. There will be a need for architectural standards for Web
3.0.
The Future: Web 3.0, Web
4.0, and Web 5.0
• *Web 4.0 
o Symbiotic Web. - Mobile Web
o powerful electronic agents.
• will work to integrate and personalize all of an
individual’s interactions with technology
The Future: Web 3.0, Web
4.0, and Web 5.0
• Web 5.0
o still an underground idea in progress and there is
no exact definition of how it would be.
o Web 5.0 can be considered as a Symbionet Web,
decentralized.
o predict your needs from your behaviours, without
many cues, is a hint at the Intelligent Web to come.
(emotionally as well as logically)
 Managerial Issues
1. Should we use auctions for selling?
2. Should we barter?
3. How do we select merchant software?
4. How can we use Facebook and other social networks in
our business?
 Summary
1. Activities and mechanisms.
2. E-marketplaces and their components.
3. The major types of e-marketplaces.
4. Electronic catalogs, search engines, and
shopping carts.
5. Types of auctions and their characteristics.
6. The benefits and limitations of auctions.
 Summary
7. Bartering and negotiating.
8. The structure and role of virtual
communities.
9. Social networks as EC mechanisms.
10.Virtual worlds.
11.Augmented Reality (AR) and
crowdsourcing.
12.Web 3.0 and Web 4.0.