You could be forgiven for thinking that QXL was the UK's biggest internet auction site considering all the publicity it has received. However, largely through word of mouse, this position looks likely to belong to eBay.co.uk, the recently opened branch of ebay.com.
EBay UK had quietly built up to 127,000 users by the end of March, and is confident this figure will double by the end of the year. What is remarkable is that while QXL built up its user base through a constant stream of media coverage, eBay.co.uk, echoing its US parent site, has not yet resorted to large advertising campaigns.
Ebay.com is a salutary tale for all those recent venture capital-backed web launches. It started in September 1995, an experimental site set up by Pierre Omidyar of San Jose, California. Only when it took off did Omidyar give up the day job.
Although much imitated, eBay.com kept a lead by a constant process of customer- led innovation. Perhaps eBay's greatest innovation is its advanced feedback system, which rates traders by the number of successful transactions they have made. In a sector still plagued by fears of fraud, this has stimulated confidence in trade at eBay. It is estimated that 20% of those selling on eBay.com make a living from it.
In contrast to the slickness of eBay, QXL's pages suffer slow links, poor site navigation and tiny print that take all the fun out of browsing. Where eBay's much copied green, blue, red and yellow logo on a white background suggests the variety of the auctions on its site, QXL's clumsy grey and orange graphics conjure up poor taste and drabness. This surely will be changed soon, though, worryingly, QXL seems to be spending its shareholders' money, on charging around Europe buying any auction site of note.
QXL will not provide an exact figure of its UK users, but its current figure for its eight country European operation is 680,000. If the UK changes to the euro then QXL will be laughing. In the meantime, cross-Europe trades are problematic, not only because of currency differences, but also because of the language barriers.
EBay's advantage over QXL creates its own problems. The demands that eBay's 15.8 million users worldwide (July 2000 figures) make on its system have led to lengthy system outages. At worst these breaks in service, when its system gets updated and cleaned, have led to down-times lasting days. There are weekly Friday morning shutdowns, between 1am and 5am West Coast time to cause minimum distress to US users. Unfortunately. for UK users, who are eight hours ahead, this wipes out most of the daylight hours of Friday morning.
EBay has promised to reduce these outages to several minutes some time in the future. Still, tackling eBay head on with consumer-to-consumer auctions is not a battle QXL looks likely to win. But this does not mean eBay is unbeatable: in the USA, many online auction sites are thriving by offering services different to eBay.
In the UK, auction sites such as Firedup.com do this by concentrating on merchant auctions alone. Owned by News International, the site benefits from constant free promotion in the Sun, Sunday Times and Times.
Another site offering a different service is UK Yahoo auctions. The US branch has become eBay.com's only serious competitor through its policy of charging no listing or sales fees. In return it offers a low-profile site with next to no customer assistance.
This policy of minimum maintenance has encouraged sellers of hardcore pornography and Nazi memorabilia, to the detriment of the site's reputation. It also has had a number of prank auctions. Recently someone from Oklahoma was selling a certain "Jake Martin" in the other goods and services category under the heading "Stupid Person".
Other auction sites well worth checking out include http://sothebys.amazon.com, which features the auctions of accredited dealers in collectables and memorabilia. The Beverley Hills charity auction site, where you can bid for signed photos of Warren Beatty, Robert De Niro, Sharon Stone et al, is good for a browse. Lastminute.com is experimenting with www.holidayauctions.net where it offers a bigger range of package holidays.
How to get the best from auctions
EBay's invention of the feedback system was the making of online auctions. The system gives a fair indication of how experienced and trustworthy other users of the site are.
At eBay after each successful trade, the buyer and seller can award each other either a neutral, positive or negative comment. Each positive comment earns a point, the more points a trader accrues the happier people are to do business with them.
Any auction site of any note now has such a system, though eBay is still the most popular and advanced with its awards of a gold or yellow star at 10 points, a blue star for 100 points a purple star for 500 points.
These stars signify status and create great customer loyalty to the site, owing to users trying to reach these points targets.
