“We all have at sometime or other visited a famous online auction site called e-bay. The site very successfully uses an Online Auction business model. In an Online Auction business model the respondents bid for the product through on the internet. The entire bidding process is regulated by software that is called the auctioning software. It controls all the business processes involved in the auctioning.
There are two kinds of auctioning models. One is called the Dutch auction model while the other is English Auction model. In English business model, the bidders start bidding for a product or service with the lowest price, later on the bid goes up as more bidders join in. The methodology of a Dutch auction is a bit different, in this edition of the online auction, many identical items are auctioned at the same time, with all the bidders bidding simultaneously, the highest bid is the winning bid and the entire winning bidders end up paying the highest price. The products are sold at the highest price. These days all online auctions utilize English auction methods.