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eBay has been the first incomparable giant and leader site in the online auctions field—and will probably always be.
Yet, this didn’t prevent thousands of businesses from selling their products and services through auctions, building their niche of customers and growing; with a quick search on Google, you can find auctions for real estate, cars, or antiques for which collectors worldwide bid against each other.
According to wide research published by Research & Markets in 2021:
“The global online auction market has increased significantly during the years 2019-2020 and projections are made that the market would rise in the next four years i.e. 2021-2025 tremendously. The online auction market is expected to increase due to the rise in the use of the internet for auction, the soaring urban population, the rising millennial population, the increase in sales of art-based goods through online auctions, etc. Yet the market faces some challenges such as security issues, auction fraud, etc.”
Also the historical period we’re living in, with the pandemic that increased the number of online purchases, played a part in this. So, if you are planning on building an auction-based site to sell products online, this is without a doubt the right moment to do it.
The good news is that you don’t need a huge platform nor sign a millionaire contract with a web agency to create a site for online auctions; with WordPress, WooCommerce, and two plugins, you can have your personal eBay and start selling your products in the blink of an eye.
In this article, we’re going to explain how to put this into practice.
Different auction types and how they work
Before starting, you’d better understand what type of auction will meet your needs. The most popular and easiest models are essentially two:
- the standard auction; you create an auction-type product, set the minimum bid and the highest bidder wins the auction and the related item;
- the reversed auction; the auction winner will be the bidder who made the lowest bid. This type of auction can be useful, for example, for those that need to run a competitive bidding process and want to commission the project to the professional offering the cheapest proposal.
Based on your customers and the results you want to get, you also might need to:
- set the auction as sealed to make bids “secret” by hiding them from other users;
- request users to pay a fee to take part in the auction;
- set a “buy now” price, just like on eBay, to let users who want to skip the auction buy the item at the price you have defined;
- add a fee to the auctioned item (for example, to cover possible bureaucratic or legal expenses) that will be charged to the winner of the auction;
- enable a system for automatic bids (the same used by eBay) to let users set their maximum bid and avoid making higher bids manually until the end of the auction (which can indeed be frustrating).
These are the most important features that we will explain how to configure later.
Pros and cons of selling products and services through auctions
Before creating your auction-based website, we recommend analyzing the pros and cons of selling products and services following this model.
An auction-based e-commerce site can be a good choice if:
- you sell handcrafted products and want to understand the right market price according to what your users are inclined to bid;
- you sell exclusive items or unique pieces of big value: artworks, antiques and collector’s items. A bit of competition—and “auction fever“, as the impulse pushing people to bid on items available only in a limited number or for a specific time is commonly called—can increase your income;
- you sell real estate: auctions are the fastest way to find buyers without involving estate agencies (and, consequently, without spending money on their usually expensive fees). In the last five years, 75-80% of the real estate sold through online auctions had a final buyer, a definitely higher percentage compared to traditional sales.
Regardless of the type of product to sell, there are many benefits when using an auction system. For example, you will have the possibility to:
- speed up the sale process (with brief and strong auctions) almost without any cost;
- get a higher profit, the dynamics of auctions can surprise you. On eBay, some auctioned items are regularly sold at prices higher than on sites like Amazon, where they are available to be purchased!—and I’m not talking just for the sake of talking, even my mother made a bid of $70 for a printer on eBay when the same printer was available on Amazon for $59!;
- get extra incomes by requesting commission payments. You can ask your bidders to pay $0,50 for every bid, or $50 to the auction winner for management expenses; or you can go one step further and create a real marketplace where vendors will pay a $10 fee to you for every auction or every sold item… there are tons of possibilities.
All that glitters is not gold: an auction is successful only when it catches many bidders’ attention. Therefore, it will be essential for your site to have good visibility to prevent your products from being unnoticed and, as a consequence, unsold. You will need to advertise your auctions and invest in SEO and marketing campaigns, at least until you have a substantial number of loyal customers and you’re able to count on them for an effective word of mouth.
You will also need to do your best to offer auctions that attract conscious users, who can make reasonable bids that they will then be able to pay for if they win the auction. One of the biggest problems is linked to bids made on impulse, emotionally, and it often happens that, when the initial outburst is over, winners change their minds and don’t pay for the item they won.
But we have a solution for this problem, and I’ll tell you about it later.
Essential plugins to create an auction-based site with WordPress
If you already have hosting, a site and WordPress installed to create your auction-based website, you will need three plugins:
- WooCommerce, which is free and allows creating products and managing payments of sold items;
- YITH Auctions for WooCommerce to create auction-type products and manage auctions in every aspect;
- YITH WooCommerce Stripe through which you can enable bids only for users who have added a valid credit card to their account and, at the end of the auction, automatically charge the item’s price to the winner’s credit card. Without this plugin, the winner of the auction will receive an email asking him to pay for the item manually; it can work but several setbacks may occur during the process, users might not read the email or they could postpone the payment to then forget about it or decide not to pay for it.
Install these three plugins, activate them on your site and move on to the tutorial where I will explain what to do, step by step.
Create an auction from scratch – a complete tutorial
After activating these three plugins, you can start creating your first auction.
Go to Products > Add new. Insert the auction name (1), the description in the text editor (2) and an image representing the item (3).
In Product data, select the “Auction” product type from the drop-down menu (4):
After selecting “Auction”, the box below will show all the options to configure the auction for the product you are creating:
In the field “Item condition” (5) you can type the text that will be shown on the product page (e.g. “New”, “Used”, “Original packaging”, “Slightly damaged”, etc.). Leave the field empty if you don’t want to show this piece of information.
In “Auction type” (6) you must choose between a standard auction, where the highest bidder wins, and a reversed auction, where the winner will be the bidder who made the lowest bid.
By enabling the option “Make sealed” (7), users will be able to see only the bids they made, whereas bids made by other users will be hidden on the page, as well as the current product price (that is the current bid).
In the field “Starting price” (8), you will need to set the initial price. For this painting, we will set the starting price at $25. The first bid will start from this value and users won’t be able to make a lower bid (e.g. $15).
In “Minimum increment amount” (9), you can set a minimum bid value, for example, to prevent receiving bids of only a few cents of difference. If we set a minimum increment of $5, the first bid could be $25 and the next one $30, which is $5 higher as compared to the previous bid.
The “Reserve price” (10) is the minimum price you want to sell the auctioned item for. If the highest bid doesn’t reach this value, there will be no winner when the auction ends and you can choose to reschedule it.
If you also want to sell the product without bidding, you can enable the option “Show buy now button” (11) and define the product price (12). If a user buys the item through this button, the auction will automatically end.
The last option is related to the auction dates (12), specifically the dates when the auction starts and ends.
After configuring these options, you can publish the auction that will look like this:
As you can see, the current bid is $25 (the starting price), there is a countdown showing when the auction ends and the “Buy now” button through which users can directly buy the painting without taking part in the auction.
Configuring this auction-type product was pretty easy, but if you need further help, I suggest watching our video tutorial on how to create an auction:
In the plugin’s panel, you will find many options to further customize auctions, the counter design, and define the processes to apply if the auction ends without bids or without a winner.
Among all the options, the most important ones are those related to the integration between YITH Auctions for WooCommerce and YITH WooCommerce Stripe since, as previously mentioned, this allows adding a safety measure to your auction-based site and reducing the number of fake bids and unpaid items.
You can find the integration options in General settings > Auctions payments:
The first option (14) allows you to force users to add a credit card to their account before making a bid. If the user doesn’t have a credit card added, he WON’T be able to bid and will see a note that redirects him to his account. You can show a custom text on this page (15) to inform the user why it is essential to add a credit card in order to take part in the auction.
The second option is very important since it allows these two plugins to automatically charge the product price to the winner’s credit card avoiding manual payment after receiving the email.
Why is it so important?
Without this option, the payment becomes a task that must be totally managed by the winner: he needs to receive the email, read it, click on the link, enter the site, login and pay the amount by inserting the payment details in case he hasn’t saved them on your site yet. Easier said than done. A thousand things can happen leading the user to postpone the payment or give up on the item he won. For you, this means a lost sale and an auction that ended in nothing.
With the automatic payment process, the user will receive an email confirming that he won the auction and the payment will be processed on his credit card. Smooth and easy.
Now you are ready to create your first online auction. Good luck and may the best bidder win! 🙂