Businesses and customers can buy and sell on the Internet through a number of mechanisms.

The most widely used mechanisms are:

• Electronic catalogs,
• Electronic auctions,
• E-storefronts,
• E-malls, and
• E-marketplaces.

Let’s look at each one more closely.

Catalogs have been printed on paper for generations. Today, however, they are available on CD-ROM and the Internet. Electronic catalogs consist of a product database, a directory and search capabilities, and a presentation function. They are the backbone of most e-commerce sites.

An auction is a competitive buying and selling process in which prices are determined dynamically by competitive bidding. Electronic auctions (e-auctions) generally increase revenues for sellers by broadening the customer base and shortening the cycle time of the auction. Buyers generally benefit from e-auctions because they can bargain for lower prices. In addition, they do not have to travel to an auction at a physical location.

The Internet provides an efficient infrastructure for conducting auctions at lower administrative costs and with many more involved sellers and buyers. Individual consumers and corporations alike can participate in auctions.

There are two major types of auctions: forward and reverse. In forward auctions, sellers solicit bids from many potential buyers. Usually, sellers place items at sites for auction, and buyers bid continuously for them. The highest bidder wins the items. Both sellers and buyers can be either individuals or businesses. The popular auction site eBay.com is a forward auction.

In reverse auctions, one buyer, usually an organization, wants to purchase a product or a service. The buyer posts a request for quotation (RFQ) on its Web site or on a third-party site. The RFQ provides detailed information on the desired purchase. Interested suppliers study the RFQ and then submit bids electronically. Everything else being equal, the lowest-price bidder wins the auction. The reverse auction is the most common auction model for large purchases (in terms of either quantities or price). Governments and large corporations frequently use this approach, which may provide considerable savings for the buyer. Auctions can be conducted from the seller’s site, the buyer’s site, or a third party’s site.

An electronic storefront is a Web site that represents a single store. An electronic mall, also known as a cybermall or e-mall, is a collection of individual shops under one Internet address. Electronic storefronts and electronic malls are closely associated with B2C electronic commerce.

An electronic marketplace (e-marketplace) is a central, virtual market space on the Web where many buyers and many sellers can conduct e-commerce and e-business activities. Electronic marketplaces are associated with B2B electronic commerce.