What is the Impact on buyers and sellers of eBay, the online auction marketplace

Ebay is an online auction market for buyers and sellers of goods and services. Online auctions are sales transactions that develop from a competitive bidding process which is completed through the internet and therefore can be accessed by a large community of people. The use of the internet to facilitate the buying and selling of goods and services is known as e-commerce (Slack, Chambers & Johnston, 2007). It can be compared to Skype, where the internet is used as the telephone source. Here the internet is used as the market source and therefore builds the platform of online auction markets. Ebay is the online auction marketplace leader with the largest online auction space worldwide.

In the eBay online auction market a monopsony buyer faces a monopoly seller (Sloman & Wride, 2009). Therefore eBay is classified as a bilateral monopoly. It is often compared to the sales section in newspapers or the american yards sale, where miscellaneous household goods such as art, clothing, furnishings, electronics and other collectibles are offered from 'ordinary traders' (monopolist) to buyers (monopsonist), who aim to make a "bargain". The reach of the World Wide Web is global and easily accessible, which makes ebay an ideal auction place as it offers buyers a wide range of products. One reason why a monopsonist may use eBay is that a product (e.g. art or antiques) that is unique or rare and not available in his or her area can be found on eBay. An alternate motivation for a buyer to use this online auction market, is the purchasing of goods and services at a lower price than in the conventional market. Here the buyer can also negotiate on the price of the product with the seller and vice versa. However buyers on eBay often have to face the problem of fraudulence e.g. fake designer clothes or damaged goods, where the sellers often do not offer a refund. Online auctions, such as eBay,