The cars are presented to sellers in an electronic catalog that includes a list of features and interior and exterior photos plus a specific time when the item will be sold. The auction is carried out electronically, meaning that buyers can participate without traveling and can log in only when they are actually interested in a particular car. Cars that are sold are transported from the seller's car lot to buyer's car lot. By 1995 it was the largest of 144 used car auctions in Japan and had 4,150 dealer members. It is commonly believed that sales prices in electronic auctions should be lower than sales prices in traditional auctions because the buyer's costs of searching for better alternatives will be lower.
Several reasons explain the higher prices.
First, the sellers feel free to hold out for higher prices because a larger number of potential bidders might bid on this cars. Furthermore, they do not have to absorb the cost of moving the unsold car from the auction lot back to their car lot or to another auction. Instead, it can simply stay at their lot until the next auction. On the buyer's side, a slightly higher price might be acceptable because the buyers do not have to absorb the opportunity cost of traveling to the auction site and spending a day there instead of selling cars at their own lots. For the same reasons as in the Japanese case, the sellers obtain a higher price than they might obtain on a physical lot.