Bidding for a Slice of Web Trade

Imagine a world without fixed prices -- or one where almost everyprice is negotiable on the Internet. Want to see the Redskins playbut don't have a ticket? Instead of turning to scalpers, you mightsign on to www.redskins.com and bid against football fanatics foravailable seats.

Here in the Washington area, it's no stretch to imagine DC Coast,Citronelle and other restaurants using Web auctions to exact premiumsfor their best tables, or the Kennedy Center auctioning show ticketson the Internet. For that matter, imagine roofers and plumbersauctioning their services during a winter storm.

These were a few visions that popped into my head after I spenttime clicking around BidStream.com, an electronic auction searchservice that was launched on the Web yesterday. For those of ustrying to divine the future of electronic retailing, BidStream.comprovides a startling glimpse of how far the dynamic-pricingrevolution has spread.That's because BidStream is a window on 100 Web sites, allspecialty auctions of many flavors that have one thing in common:They use the same off-the-shelf software. Enter a term inBidStream's search box and it instantly searches the inventories ofparticipating auctions.Although still crude, BidStream.com is a pioneer in dynamic trade,the era of fluid pricing that is being ushered in lickety-split bythe global computer network. By now, you probably know that a lot ofpeople -- more than 2 million -- have registered to buy and sellgoods at eBay.com. You may also have heard that booksellerAmazon.com added a copycat auction center to its Web site two weeksago and announced this week that it is buying LiveBid, the Seattlefirm that lets traditional auction houses broadcast their liveauctions online.But did you also know that thousands of other companies -- frommom-and-pop entrepreneurs to big, established retailers -- are doingtheir own versions of the Amazon and eBay thing? The online auctionformat is exploding in popularity, sending tremors through theeconomy.Forrester Research, an Internet consulting firm, projects thatonline auctions aimed at consumers will gross $19 billion a year by2003, up from $1.4 billion last year. And while eBay and otherperson-to-person auctions claimed 70 percent of Internet consumerauction sales last year, Forrester predicts that eventually two-thirds of the market will be businesses selling to consumers."People think of auctions as destination sites, but auctions aregoing to become a natural component of all e-commerce initiatives,"said Michael Brader-Araje, founder of OpenSite Technologies Inc. andcreator of BidStream. "You will see thousands of manufacturers andretailers start to use auctions as a component of their Internetpresence."You can get a front-row seat to the pricing revolution by runninga few searches on BidStream.com, which links auctions run withOpenSite's software. Not all of the 270 auctions using OpenSite arelisted yet, but most will be soon. Already, more than 80 percent ofOpenSite customers report that they are profitable, Brader-Arajesaid. His claim was reinforced by the five randomly selectedauctioneers I interviewed.In an experiment that dramatically boosted its Internet sales,Sharper Image launched an OpenSite auction at the end of February.In March alone, the company's Web site sold $913,000 worth ofmerchandise. That was more than twice as much as in the previousmonth, and half of it came from the new auction area. Internet salesrepresented about 6 percent of the company's sales for March and areexpected to total $25 million this year, the company said.Another OpenSite auctioneer is Daddy's Junky Music Stores, aseller of used musical equipment with a catalogue business and 19stores in New England. Daddy's started RockAuction.com in December1997 and sold $1 million in merchandise at auction last year, asignificant part of the company's $30 million in total sales,according to technical director Chris Pelick."You will see thousands of manufacturers and retailers start touse auctions as a component of their Internet presence."-- Michael Brader-Araje,founder, OpenSite Technologies Inc.OpenSite's software comes at three prices -- $5,000, $15,000 and$50,000 -- allowing entrepreneurs to start on a low budget andexpand. Later this year, the company plans an even cheaper $50-a-month option. That, along with similar auction products fromcompetitors Moai Technologies and FairMarket, could spread theInternet auction bug even faster.Anna Rue, who runs Cyberhorse.com from a horse ranch in Texas, wasbitten hard. She has sold more than 300 horses online since December1997 and said her site has turned a profit almost the entire time."Now I spend 14 hours a day at this, and I love it," Rue said. "Myhusband has to drag me out to ride horses anymore."WineBid.com, which launched in September 1996, also reports abooming business. With 10 employees, it auctions more than $300,000in wine every month and takes a 25 percent commission forauthenticating the bottles, according to co-founder Darren Nakos.Maryland sports-card buff Brien Curran runs a two-person operationfrom his home in Anne Arundel County, selling about 25,000 cards amonth at Curranscards.com. Many collectors start selling on eBay,Curran said, but find they can get higher prices from specialtyauctions. As an experiment, Curran and another collector offered twosets of identical cards on eBay.com and Curranscards.com. Both lotsbrought 43 percent more money on Curran's site than eBay, Curransaid.The auction fever is just beginning. In time, retailers andservice industries will find countless new ways to use electronicauctions -- some of them worrisome. After all, don't the rich haveenough of an edge already?Whole industries could be rocked, too -- real estate, for one.Imagine Weichert Realtors putting all its property listings into Webauctions, each lasting two or three months -- or until the reserve ismet. It might revolutionize home selling because people would beless timid about low-balling.While no one can be sure where the era of dynamic pricing willlead us, you can bank on it being a wild ride.You can send e-mail to Leslie Walker at walkerl@washpost.com. Fora list of auction Web sites and related online resources, visitwww.washingtonpost.com/walker.