Intermediaries conduct private auctions for a seller, either form the intermediary’s or the seller’s site. Or, a company may choose to conduct auctions in a public marketplace, using a third-party hosting company (e.g., eBay, which has a special “business exchange” for small companies).
Intermediaries usually prefer to use third-party hosting company for conducting auctions because of the benefits they receive. They don’t have to worry about resources such as hardware, bandwith, engineering resources, or IT personnel. They don’t have to worry about hiring costs or opportunity costs associated with the redeployment of corporate resources. Another benefit is that B2B auctions also offer fast “time-to-market”.
An intermediary is involved in various aspects of the auction preparation. The intermediary sets up the auction to show the branding or company name of the merchant rather than the intermediary’s name. The intermediary does the work of controlling data on Web traffic, page views, and member registrations. He also sets all the auction parameters (transaction fee structure, user interface, and reports); and integrating the information flow and logistics.
When a company wants to dispose of unwanted assets without advertising to the public that it is doing so, and intermediary-conducted public auction would be the logical choice. If an intermediary does the auction, they don’t have to provide answers regarding the quality of the product. If a manufacturer is selling off products, buyers get suspicious of the quality of the items.
The intermediary also takes care of the billing and collection efforts. Intermediaries calculate merchant specific-shipping weights and charge customers for shipping of auctioned items. All credit card data are encrypted for secure transmission and storage, and all billing information can be easily downloaded by the merchant company for integration with existing systems.
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