An online auction is based on the Brokerage model , which brings buyers and sellers together in a virtual marketplace.
- An online auction is an internet based system that unifies sellers and buyers on auctions for various products on the website, Here, the highest bidder buys the item.
- A brokerage model is a type of business model adopted by online auction in which a broker acting as a middleman creates a platform such that buyers and sellers of different product and services can come together for business transactions.
For example, when a trader auctions its product and the auction is executed, The trader/ investor will pay a transaction fee to the brokerage company for its effort in providing a platform which made such transaction possible.
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