Everything You Need to Know About Online Auction Websites

Everything You Need to Know About Online Auction Websites

We use the internet for almost every process, ordering a pizza, buying a television, sharing a moment with a friend, or sending a picture over instant messaging. The internet has revolutionized everything and will continue to do so in future as well. It has transformed traditional businesses into online businesses, a traditional marketplace to online marketplaces. ย One such marketplace that the internet has given rise to is online auctions. It isn't something new online auctions date back to 1995, later that people found online auctions as a vast online marketplace to buy and sell anything to everything.

Online auctions have considerably increased the variety of goods and services that can be bought and sold using auctions along with expanding the possibilities of conducting auctions. In the current web environment, there are hundreds, if not thousands, of online auction websites dedicated to online auction practices. In this article, we will talk about everything you need to know about online auctions. So, let's get right into the business.

What Is an Online Auction?
Types of Online Auctions
Is Online Auction and Bidding Legal in India?
How to Run an Online Auction in India?
Benefits of Online Auction Sites
Drawbacks of Online Auction Sites
How to Protect Yourself Against Online Fraud?

What Is an Online Auction?

An online auction is an auction that takes place via the internet, allowing users to sell or bid for products and services online. Online auctions allow sellers to reach larger audiences, in different locations and geographical areas. Different sellers offer different kinds of products on a web-based platform.

Online Auction Market
Online Auction Market

Types of Online Auctions

Live Online Auctions

A Live Online Auction is a combination of a Live and Internet Auction. You can bid live and onsite at the Auction or you can bid live from your computer at home or work. An online clerk will relay your bids to the Auctioneer and you will bid against floor bidders who are at the auction and other online bidders. The Auctioneer will ask for the next bid increment, If someone bids for $60 the online clerk will update the asked bid and your screen would show that the requested bid is $60. This process will continue until there is no further competitive bidding.

Online Only Auctions

An online-only auction is an auction that is held online only and there is no life in-person bidding available. Bidding can be done from your computer with an internet connection at home or at work. This type of auction will be a catalogued auction with each item having a lot #. If a bidder is interested in Lot #12, they have to register and place a bid on lot #12. This process of bidding occurs up until the scheduled lot time is closed.

It is perfectly legal to start an Online Bidding Auction site in India. Before doing that you need to follow some steps and they are:

  • You will be required to comply with various provisions of the Information Technology Act.
  • Your domain name needs to be registered.
  • Online Payment Gateway should be RBI approved.
  • You should have a dedicated 24x7 customer helpline.
  • Your company should be registered, trademark and copyrights also need to be registered.

How to Run an Online Auction in India?

Once you decide to hold an online auction, you need to follow several steps and those steps are:

Registration at Online Auction Sites

The first step for both the buyer and seller before participating in an online auction is to register on an online bidding site. There are several online bidding sites available where you can register yourself as a Seller or a Bidder. Registration is required to keep track of the items you bid on or sell.

Listing the Items on the Online Auction Sites

If you are a seller you can list one or more items for sale on the bidding site and set up a starting price for bidding. The seller is expected to give a complete description and specifications of the items on sale. Mostly, a specified time period is set up for bidding. In some cases, the bidding process takes place live on a specific date at a pre-specified time when bidders log in with their IDs and place their bids.

Listing the items on the Online Auction Sites
Listing the items on the Online Auction Sites

Setup a Payment Method

If you are the seller, you have to set up multiple payment options for the convenience of the buyers, which include RBI approved payment gateways like - CCAvenue, Oxigen & PayPal or Debit Cards, Credit Cards, Wallets, PayTM, UPI, Net Banking, Cash Cards & EMI options.

Bidding on Online Auction Sites

Buyers visit the auction website, select the preferable item and bid on them during the online auction duration a specified time for the auction is allotted for every item.

Online Bidding

The online bidding for each auction closes at the specified time. In the case of multiple bidders, the bidder with the highest online bid at the end of the auction is likely to buy the items. If there is no online bidding at or above the reserve price, the auction closes without a winner.

At the end of a successful online auction, You can communicate with the buyer over an email to arrange for payment and delivery of the goods. The sale is at the discretion of the seller. It is the choice of the seller to sell or not to sell the item to the highest bidder.

Benefits of Online Auction Sites

Some of the benefits of online auctions are:

  • Better Deals on products
  • Variety of products
  • No need to physically attend the auction

Drawbacks of Online Auction Sites

There are some drawbacks of online auctions as well and they are:

  • A website may go down for multiple reasons.
  • Since attending an online auction is easy, everyone can join in. That means you will have to outbid a lot more people. And that becomes harder as the number of bidders goes up.
  • You don't get to inspect the item you are bidding on. Sometimes the pictures of the products can be misleading.

How to Protect Yourself Against Online Fraud?

Use Sites That Contain Only HTTPS URLs

If you are on any site that you are looking to make a purchase from or enter personal information into, make sure that the secure icon is displayed, and that the very first letter preceding the โ€œwwwโ€ is https://. By virtue, HTTPS encryption is done bi-directionally, which means that the data is encrypted at both the client and server sides.

Use Strong Passwords

The more complex your password is, the more security it provides for your account. By using a simple password, it becomes very easy for a hacker to simply guess your password without even having to know you or take further action. When creating passwords, use strong password criteria such as passwords that contain multiple instances of numbers, upper and lower case letters, and special characters when available. Make sure to change your passwords from time to time.

The basic method for cybercriminals is to send out a mass e-mail containing an attachment or a hyperlink. The attachment is malware and any hyperlink will be a website masquerading as something legitimate. The goal is to trick the e-mail recipient into downloading the attachment (exposing their PC to the malware), clicking the link to a website that may be infected with malware, or asking for confidential data such as credit card numbers to be entered.

Keep Personal Information Confidential

Unless you are very confident about the site you are using, be wary of entering information on sites that are looking for your personal information. Be especially wary of sites asking for any financial information, address and birthday, or middle names. Most sites do not need this information and have very little use to collect this, especially all in one place.

Even after all these if you fall victim to online auction fraud in India, you can consult a cyber lawyer and file a complaint about online fraud with the cyber crime cell in your city.


Even though the online bidding process is transparent, one cannot eliminate the chances of fraud when entering the online bidding market. Online auction sites Display a wide range of goods and are a growing community of buyers and sellers. Online auction sites are a prime example of how the internet has changed the ways in which modern business works and the endless possibilities the internet holds.


Online auction is legal in India and there are many websites that host them.

Which is the largest online auction suite?

eBay is the largest online auction site.

What do you mean by online auctions?

An online auction is an auction that takes place via the internet, allowing users to sell or bid for products and services online.

What are the two types of online auctions?

There are two types of Online auctions and they are:

  • Live online auctions
  • Online only auctions

Must have tools for startups - Recommended by StartupTalky

Read more

Crafting Bharat Released Its Sixth Episode With Rajat Deshpande, Co-Founder and CEO of FinBox

Sixth Episode of Crafting Bharat Podcast with Rajat Deshpande, Co-Founder and CEO of FinBox Offering Valuable Insights into India's Startup Landscape

A startup founderโ€™s life comes with layers of challenges, responsibilities, commitments, all-nighters, long hours,ย and more. It can be heartbreaking when things don't work out, and rewarding beyond belief when they do.ย  The "Crafting Bharat - A Startup Podcast Series" powered by AWS, and an initiative by NewsReach, in

By Muskaan Kapoor