The online auction industry is growing rapidly, but scale economies are a barrier to entry as there are very few variable costs to the business that increase as the number of customers increases. Although fixed costs are relatively low, you could use the same servers and software for a few, or a lot of customers but the fewer customers you have, the higher the cost per/unit.
Product differentiation:
In the online auction industry, the customer must be confident that they can trust the site, and then the site will gain customer loyalty. A trustworthy brand image is essential for any business in this industry, as this promotes that the site is secure.
Capital requirements:
To start up in the online auction industry, you ne
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