To understand the functioning of online auction fundraisers, it is necessary to compare it to that of traditional auctions that the world recently was used to.
In the auctions of the past, a venue and auctioneer had to be
hired and the goods had to be physically transported to the hall to be
displayed on tables. Additional staff had to be hired to help in sundry work.
The scenario is different in online auction fundraisers. Specialized
websites hold these events and offer fully-managed services. These include
registration of the intended participants, conducting the bidding, declaring
the winners, displaying photos of the items on the site, and providing payment
gateways.
Hence, an important benefit of online auction fundraisers is
the cost factor. As compared to traditional auctions, the charges of holding
online auctions are negligible. Moreover, the auction sites are often free and
most charge very nominal fees for holding auctions, However, fundraisers have
to pay third-party service fees like that charged by payment gateways.
Online auction fundraisers fetch higher sale prices than the usual
auctions. There are two reasons for this.
First, as the auctions are held over the Internet, participants
are not limited to specific geographical boundaries. Anybody from any corner of
the globe can take part in these auctions. Therefore, with more attendees, the
bidding is generally fierce and highly competitive, thereby pushing up the
prices. This is a boon for the fundraisers as they are assured of high
profitability.
Second, the items offered at online auction fundraisers are
often scarce and precious commodities elsewhere in the world. Hence, bidding
here too is highly competitive and auction organizers can be assured of higher
selling prices for their items.
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