AW Daily - Tips & Tactics - Before the Auction: Offering a Buy Now Price

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What do buyers like? They like options. In particular, they like buying options. At least that's the theory behind the implementation of so-called "buy now" functionality at all the major online auction venues. Here we provide an overview of this suddenly ubiquitous feature, as well as look at the pros and cons of using it.

I Want It Now!
Buying options, shipping options, payment options--with millions upon millions of listings available 24/7, online auction sites are definitely looking to bring in more buyers and offer more choices and flexibility for people looking to purchase goods online. One of the newest and most common buyer-centric features allows sellers to specify a threshold fixed price at which they're willing to sell an item. Once a buyer places a bid for the designated amount, the auction ends immediately--no more bids are accepted. Buyer and seller then go about completing the transaction.

All the top auction sites offer the buy now feature, but they have different names for the option. eBay calls it "Buy It Now"; Yahoo Auctions terms it a "Buy" price; Amazon.com Auctions designates it a "Take It" price; and FairMarket-affiliated sites, such as MSN Auctions and Excite Auctions, call it a "Quick Win" listing.

For Buyers and Sellers
Sellers can indicate whether they want to offer the buy now option when listing an item, at no extra charge. Some sellers also include "Buy It Now" or "Take It Price" in their auction titles to lure in bidders seeking to buy items quickly and bypass the auction process.

A "Buy It Now" icon appears in search results on eBay, the only site to provide this helpful assistance for buyers. Of course, indication of an auction being a buy now listing is made on a site's auction pages as well. In the case of eBay, the Buy It Now price appears right underneath the current bid. On Yahoo Auctions, you'll find it in the "Auction Info" section, highlighted in yellow. On Amazon.com Auctions, it's listed under the current and minimum bids.

Pros and Cons
So what are the attractions and potential detractions of using the buy now feature? Most notably on the positive side, since it ends an auction immediately, the buy now option significantly reduces the overall transaction time. A buyer can place a buy now bid, and if he or she pays via credit card, the sale can be concluded within minutes.

This is attractive for buyers who don't want to place a bid and wait several days to see if they win (it's also particularly handy for when timing is of the utmost importance, such as the holiday season), and for sellers who, like buyers, would rather not wait out an auction.

The buy now option also eliminates the controversial practice of sniping.

On the downside, designating a fixed price means that a seller might get less than if the listing ran solely as an online auction. It puts a definite cap on how much a seller can get for an item, and the possibility of a last-minute bidding frenzy is eliminated--as is in the chance for a better profit. Moreover, the online auction "fun" factor is gone. With buy now, an auction becomes just another online transaction.

A Controversy?
Online auction sites' implementation of the buy now feature has been greeted with a few grumbles. Some users say that adding a fixed-price component doesn't have a place on online auction venues. As one AW member put it: "'Buy It Now' is what we do at Wal-Mart." But whether you approve of buy now listings, and whether you choose to take advantage of them as either a buyer or seller, it appears as if they're here to stay as sites continue to expand and seek to reach out to more buyers.

Lastly, although the buy now option on most sites is primarily the same, there's one major difference with eBay's Buy It Now feature. Unlike Yahoo Auctions and Amazon.com Auctions, once a bid is placed on an eBay auction, the Buy It Now price is no longer available.

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