My
Success With eBay
by
John Jakubik
Cathy Kenny
Monday,
July 10, 2000
Online auctions: Web-based transactions that
let users buy and sell a variety of products and services through bidding.
Want
to buy a Planet of the Apes lunchbox or sell your King Kong finger
puppet? What used to be found only at garage sales or in classified ads
can now be put up for sale at dozens of online auction houses. Similarly,
retailers are using the auction format to offload excess inventory and
other services. But it's technology that makes all of this work: Behind
the flurry of buying and selling, computers are furiously tracking bids
and counterbids and determining the winner.
Here's
what you need to know:
- Online auctions rely on relational database applications
to store and track users, items, and bids.
- Most auction sites use automatic bidding agents
that match your bid to the highest bid (up to a preset limit), sparing
you from checking the site constantly.
- Escrow services facilitate transactions between
buyers and sellers at some sites--but fraud is still a big issue in
online auctions.
On
the surface, an online auction is similar to a traditional auction. You
bid against others for an item. At the end of the auction, a winner is
declared and that person buys the item for the amount agreed upon during
the process.
Of
course, the online process differs from the in-person experience. To begin,
you register at a site so it can keep track of items you bid on and items
you sell. When you enter an auction to place a bid, the site's computers
determine the amount you need to bid in order to become the highest bidder.
You can accept this amount or enter your own bid. For every additional
bid that is placed, the computers orchestrating the auction again compare
your bid against the current bids and determine if your bid is the winner.
An Auction's Backbone
Behind
the scenes, a relational database keeps track of items, bids, and, most
importantly, winners. For the most part, online auction databases are
constructed of three relational tables: the user registration table, which
contains all user-related information; the item listings table, which
includes the item, description, and lot number; and the transaction table,
where each bid record is stored. These tables are linked by related fields
and constantly work together to track bids on an item.
For
instance, a bid record will contain the user ID from the user registration
table, the lot number from the item listings table, the bid amount, and
the date and time stamp. The computers continuously analyze the bid records
to determine the highest bidder. When the auction ends, a winner is declared
and notifications are sent out to the buyer and seller. And then the process
starts all over again for the next item.
So
that you don't have to baby-sit your auction, many sites employ a piece
of software known as a proxy bidder, which automatically places bids on
your behalf. To use the proxy bidder, you designate the maximum amount
you wish to spend on an item. Then, each time a bid is placed that is
higher than yours, the proxy bidder kicks into action and places a bid
for you. It will only increase your bid amount by as much as is necessary
to top the current bid, and will not exceed the maximum amount unless
directed by you to do so.
