[meteorite-list] Steve Arnold's Famous Reverse Auction

From: MeteorHntr at aol.com <MeteorHntr_at_meteoritecentral.com>
Date: Tue, 29 Apr 2008 05:59:43 EDT
Message-ID: <cfd.3134616f.35484b8f_at_aol.com>

Doug,

You said:

Sometimes you really can get good deals. But, theoretically, if only
one item is for sale, the expected revenue from the sale is identical
to an auction as long as you have full participation. If I had to
guess, I'd say the payback to you will be lower than a normal auction,
mainly because you will lose some participation by varying the standard
format (lose some people, though you hope the opposite by varying), and
also because you are limiting the upside (sometimes to seller's
delights).

*********
I agree, the payback probably is a bit lower than with a normal auctions,
people can procrastinate to the very end before they decide if they even want
to make a bid. With multiple reductions, some people will just miss out on
chances to bid at a higher price. Some may show up a day late and pay a lower
price when they would have been happy to pay the higher price the day before
had they showed up.

********

If the payout for the Seller is equivalent - What do you think makes an
auction (eBay proxy style) so popular for buyers, IMO it's the foreplay
where everyone can interact to raise the bid and has the equality, a
vicarious scent of "winning" on a level field against the needs of
museums, scientists, collectors, etc., while their bid is the highest -
and that maybe others won't pay attention - which can happen. Once
people start participating it's like rolling vs. static friction, and
things can heat up. This is why jump bidding is so contentious: does
it start the roll (yes), but does it stop the rolling (?) ...

******
I agree, but if I have say 40 items up for sale, going down in price, say
daily, there is action happening all along, rather than the waiting until the
last 30 seconds.

*****

To reproduce such a feeling and give us a truly revolutionary auction,
let me suggest the following simplier and perilous scheme:

Steve's revised oriented liquidation 'auction':
1. Announce the start time well in advance.
2. Put everything up as buy-it-now, the starting highest price you have
in mind.
3. E.g., all 10 day auctions for simplicity.
4. Make the discount equal to the percent of total auction time elapsed.

for example, starting price: $100 dollars
purchased on day 6 of the auction: 6/10 = 60% discount, buyer pays $40.

****
That is very close to what I did in the past and was planning on doing this
time. In the past I enjoyed, being haphazard in my frequency on the
lowering of the prices. Also, often with a list of 100 items or so selling, it took
time to go in and manually change the new price for each on the email, then
send it all out. In a given weeks time or so, there were times I was just
busier than others. Plus, it kept the buyers on their toes.
 
I like how you think Doug!


*****

This is the concept you are after - with no fluff added (no fluff is
another reason online auctions can beat out one-on-one transactions,
for those unwilling to deal with the quirks of the other party leading
up to exchanging the piece.

The excitement would be generated because the seller puts the material
on the line at risk and it is transparent. Just like a $0.01 normal
start price can be a loss to a seller the normal way, if no one notices
the auction running down you create what is scientifically known as
"sniper's dilemma" ;).In snipe mode - when to snipe becomes the
question ... The big difference here is that the seller should have no
control to pull the item - no early canceling of auctions!

COOL !!

****

In the past, if a price got too low for me, I would just stop lowering the
price on that particular lot, and keep lowering the others. Basically, it
would be my "Reverse Reserve price." I wouldn't need to cancel it, just slow
down and/or stop lowering the price.
 
On the other hand, the threat of the price bouncing back up to the full
price would add a bit of a twist to it. Kind of a game of Ebay Chicken, who
blinks first?
 
Another down point, is that some people don't even look at lots on ebay
unless they are ending in the next 24 hours. Everyone here on the list would
know with an announcement at the start, but some 10 day auctions might end
quickly, without a lot of potential buyers even seeing them. For those "in the
know" and paying attention, they could get things without as much competition.
Good for the prudent bidder, not as good for me. But then again, who are we
here to please, me or the customers???

Looks like I have some work to do here to make this "gimmick" work.

Steve #1
 



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Received on Tue 29 Apr 2008 05:59:43 AM PDT