Starting A Profitable Online Auction Website Like eBay

There has been a huge increase in the number of online auctions in recent years that can be seen all across the web. From big services like eBay to dozens of smaller competitors, the emergence of such services that began back in 2002 only seems to be gaining pace.

So, what are the reasons behind online auctions’ success, and why would you want to build your own?

Benefits of Being Internet-Based

Online auctions got rid of several limitations that their “offline” relatives have. Physical auctions can be clumsy and painfully slow due to the number of participants and delivery time. There is also a need for participants to be physically present, which limits the time of the auction and the number of bidders. Online auctions, however, are based on websites or web applications, making both of these issues irrelevant.


By taking the auction to the web, you also make all the work needed to organize it far easier. With the right software, many processes and tasks can be fully automated, saving your time and money.

Availability of Software

With the amount of website-building solutions available across the web, building your own auction website is simpler than ever. As there are plenty of HTML editors and Google sites will teach you how to build a website from scratch and for free.

Where To Start?

First of all, you should keep in mind several things that apply to the auction business as a whole.

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The Parties

In every auction, there are three parties involved:

The seller is a person who owns a product that is the auction lot.

The buyer is an individual who is interested in buying the item, and bids some amount of money in hope of getting it.

The auctioneer is the one who oversees the auction and makes sure that it goes by the rules. The auctioneer is also responsible for the buyer getting the lot they paid for and the seller getting their money. This is the role you will assume as the owner of an online auction website.

Business Models

There are several different business models you can choose depending on your preferences:

  • The Reserve Price is a model where the seller chooses the starting price for the lot, and auction bids start from that fixed sum.
  • With the Buyout model, the seller selects an additional price for the lot (known as buyout price) along with the starting price for the auction. The buyout price can be accepted by any buyer at any point of the auction as long as it’s higher than the current bids. The auction ends either when the buyout price is accepted or when auction time runs out.
  • Unique for the online auctions is the Proxy Bidding model, where the buyer sets the maximum price they’re ready to pay for the lot, and a software does the bidding with other participants of the auction. This will go on until the lot is won or the fixed price is reached.
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Essential Software

With the basics covered, you need to think about the contents of your website. While its design and functionality are mostly up to your business plan and budget, there are some features that are essential for any online auction to work.

Price Setting System

According to the chosen type of business model, you need to install the appropriate software. There are specific programs used in different types of online auctions, like the proxy bidding system or the price reserve system.

Email Notification System

You need buyers and sellers to be well-informed about the ongoing auctions and the current status of their bids and lots. The simplest way to do it is by connecting their email addresses to their accounts. Just set up a system to monitor the catalog of relevant lots, and then send daily notifications to the users.

Bid Listing

Any online auction is as good as its bid listing.

Simply put, bid listing is how the site handles the articles that sellers have auctioned off. It lists lots currently available for an auction on the website, and present it to the buyers.

Different kinds of bid listings are one of the main advantages of online auctions, as the site can be tailored to show information in a way that will be the most useful.

Another advantage is that such a “list” can be viewed by buyers at any time, which is beneficial for all parties involved.

There are several ways bid listing can be done. Here are some examples:

  • Reserve Price Auction – used in the auction business model of the same name, this kind of listing allows fixing a price at which lots will be sold.
  • Dutch Auction – the seller selects a starting price, which is then lowered until some buyer agrees to buy the lot.
  • Regular listing – last, but not least, this is the simplest way of organizing your online auction. Each lot is attached to a category, where it can be auctioned.
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Creating A Positive Trust Rating

Gaining buyers’ and sellers’ trust is essential for the success of any online auction website. Sites with a higher trust rating will usually have far more sales per day than their less trusted competitors. But gaining that trust and then maintaining it is no easy task.

You need to react fast to everything that happens on your website, be fast in learning from your mistakes, and understand user behavior. It takes time, but eventually you will find the spots that need to be improved to make user experience better, and your site will start gaining positive reputation among those interested in online auctions.


Online auction websites continue gaining popularity, and it’s not hard to see why. Breaking the limitations of distance and time that apply to physical auctions, this technology can be very profitable to those who will master it.


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