Going Once...Going Twice...

But Wait, There's More. . .

Besides eyeballs and the opportunity to build a customer base, online auctions can offer other advantages to small businesses, like providing a venue to sell inventory that may have sat in a warehouse for a while. "It gives you a way to profit from it rather than throw it away," says Santos, who often sells his excess inventory on the auction sites. "With the auctions, we can find those people who want that older software for collectible reasons."

Auctions also provide a good forum to test-market products, says Rothberg. Businesses put new products on auction sites to see if customers will bite, and then determine a price point.

Then there's the inherent benefit of auctions everywhere: Although many people are looking for a deal, the frenzy of some auctions may drive a price higher. Rothberg notes it's not uncommon for products to sell for more than they would in the physical world.

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This article was originally published in the February 2000 print edition of Entrepreneur with the headline: Going Once...Going Twice....

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