The Online Auction Business Model

Following on in our series where we tackle different internet business models, we've decided to present you with an efficient model to increase your profits by integrating an auction based business model. 

Whether you are a home-based entrepreneur or an already established company you will be able to incorporate this model into your strategy. At its basis the online auction business model is nothing else but setting up accounts in various auction sites, entering profile information, product descriptions and an opening bid and then letting your customers bid on them within a set timeline. While it may seem like a simple marketing strategy, the online auction business model is a quick and easy start-up option. It has the potential to increase your customer base and is a viable opportunity for every business, regardless of its size.


While just a few years ago the online auction business model was just in the making, today it has evolved to serve leading marketing strategies and successful businesses. Whether you go for huge online marketplaces, such as eBay, or smaller niche auction sites such as Just Beads or Bid4Assets you can directly target and reach a huge customer base with just a small marketing and set-up budget.

From the internal, streamlined marketing channels provided by these sites, to their constant tweaking of services to meet customer demand, the online auction business model works in your favour. It is also possible to sell items in several separate categories from just one online store-front, thereby broadening your reach of customers. 


As with everything, the online auction model does have it's disadvantages. Auction sites have low entry barriers and the competition in any niche is quite fierce. Furthermore, while the constant tweaking meets customer demands, you’ll constantly have to deal with the changes of these sites as well and be reliant on their security.


Write strong product descriptions that will compel your potential customers to buy your product.

Pictures are a thousand words. Present your products in the most appealing ways using professional images.

Only use credible sites which use verified and secure online payment methods, such as PayPal, thus both you and the buyer will be protected. 

Do your research and know your market, your customers and your competition before launching. 


Large companies, small businesses and individual use the auction business model to increase their profits. Some of the most notable ones are: Deluxe Marken, Babz and ZyDistro, all of which have their profits generated mostly by using the online auction business model, mainly the eBay platform. 


The online auction business model is a quick and efficient way to start a business on a small budget. Online auctions represent a global opportunity for selling just about anything from anywhere, and can be used by a home based entrepreneur as well as established companies.