Chris Reddick (Clarity CEO and President) and Ron Halversen (vice-president of sales and marketing) start this series by discussing the basics of an eAuction platform.

Part 1 of a 3-part series 

CHRIS REDDICK: Hello everybody and welcome. Today we're going to be talking about eAuction features. This is a multi-part series we're going to be going into for eAuction platforms. Today, I'm joined by Ron Halversen, who's our sales and marketing VP at Clarity, and I'm the CEO and one of the founders of Clarity.

We've done a lot of work with eAuction, generally auction platforms and of course, enterprise eCommerce. And we're going to be bringing some of the concepts and some of the key characteristics of this process to a multi-part series so that you can easily get this information quickly and you can choose which of these might be helpful to you. So let's dive right in and Ron, welcome.

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RON HALVERSEN: Thanks. Yeah, I'm really excited. These eAuction sites are incredible. They have a lot of customizations and I love seeing what the companies do with them. I'm going to go ahead and kick us off on the overview. And we'll talk a little bit about the features of the tool. First off, a big thing that people run into when these enterprises get going is they try to go out and look for some kind of SaaS eCommerce platform. They do that because they can have a monthly fee and they can be set up relatively quickly.

But the problem with that, just like with my bank, chase.com, I go online and let's say that chase.com software if I wanted to open a bank and borrow their software and lease it, obviously that software can't be highly customized or it's got to affect all the other people using that software.

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RON: So typically those off-the-shelf SaaS-based tools just don't have that customization, that extensibility or the API that can expose literally everything in the platform to be modified. So the SaaS-based platforms are challenging. So what you really need is a platform that can be single- or multi-tenant, but it can be installed either locally or up in the cloud. So it's got that flexibility. So when the business needs that solution, obviously it has to have those base core capabilities, right? We've got to be able to schedule auctions. We have to be able to handle payments. They got to be able to schedule time, set reserves, those kinds of things. So we're not really going to dive into the basics here because all of the eAuction platforms have to have that. And we might cover some of those basic features in a future series.

But right now, we want to really look for the best platform that has the most of those commoditized features, auction types, scaling to millions of skews. That's one of the things you never know how big it's going to be. Imagine how many auctions are running at any given time upon eBay. You got to think that scale if enterprise and you want to grow. And then you want to be able to have those kind of advanced attributes. If you go to eBay and look at all the different things the auctions might have, where users will include different variations and information, and maybe videos and files and warranty cards and PDFs and multiple pictures and shipping options, all that kind of stuff has to be part of that. But the most important part is that you need to be able to customize the eAuction software. Chris, what do you say to that?

CHRIS: I say you could not be more right. I mean, fundamentally from a business perspective if you just kind of talk to both entrepreneurs and C-levels and division leaders within companies who are operating eAuction software, one of their biggest challenges is that they are painted into a corner at the end of the day. And so a lot of times whenever we're working with clients, they're kind of looking at the short term needs that they have and something that can get reasonably close to that. We encourage you to think about that absolutely. We've got to be able to operate the business successfully, right?

RON: Yeah.

CHRIS: It's also important though, to really think about if you use kind of a house analogy: How many rooms are you going to need as the household expands? And do you want to build on a software platform that can grow with you? And if you don't have that capability, you really are putting your business into a bad position. It can fundamentally change the way the business operates for years and years. And it's almost like a tax on the business to use eCommerce software that doesn't have the full set of capabilities, because it's kind of a silent killer within the organization of some of the motivation and drive from the team to work on and build the eAuction capability.

So you really, really want to get this kind of philosophy internally of we need our software to work for us, not us have to adapt and model around what some commoditized offering has that typically, if not, almost always, is very limited.

RON: Yeah. I mean, I can't even think of an auction site that I've sold in the last, gosh, I don't know even know how long that didn't come to us because they had outgrown the capabilities of their existing platform. And they were looking for one that could be custom-developed. And that's kind of how they found Clarity, because we specialized in custom. And so they came to us with all those needs and the great thing about our platform is, and I always use the Lego analogy, right? We're actually selling a set of Legos and we build whatever they need. And if we don't have a Lego of the shape and size that they need, we just build it. And that's the joy of having really a fully customizable platform made to be extended and made to add these extra building blocks or Legos, we call them modules, to be able to have that kind of scalable modular platform.

CHRIS: One of the things that I think is really powerful about that is if you combine the modularity with a significant amount of really kind of feature parity, if you will, with off-the-shelf SaaS eCommerce models, you get the best of both worlds. So you do want to make sure you're working with a vendor that has both of these things, right? As much feature parity as you need to get off the ground quickly, as well as like you were saying, Ron, this modularity and you have to have both, right?

RON: Absolutely. Yeah. And that's usually where they fall down, right? They can usually find a platform that gives them a handful of the things, but you want to find a platform that gives you the most, but then has the ability to give you everything over time.

So let's go ahead and dive into some of those features. The first one is kind of under a self-service bucket, right? So when we talk about self-service, who are we talking about? Well, we're talking about pretty much everybody. You think about eBay, eBay hosts all these auctions, but they don't create the auctions, right?

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RON: I mean, I go up and let's say, you've got Johnny over here who wants to go sell his Pokemon cards. He's got to be able to go up and figure out how to do that. And he might be 12, 14 years old trying to figure out how to do that. But then you might have professional sellers that are out there that are power sellers that have 10,000 auctions a year on there and it's got to be able to serve both. So with the self-service capability, not only is it helpful for those people selling, you've got to be able to be someone like me going out there. And I have to be able to distinguish and find and tell the difference between these power sellers—if I'm trying to make a large purchase—versus somebody new or somebody potentially trying to rip people off. So it has to be very flexible and self-service for both the buyers and the sellers.

We've got to be able to upload all my assets for validation. So how do I become a power seller? How does the company, how do you audit and monitor the system as it's going through so that you can ban those people that aren't doing a good job? Is reviews enough? Is there something additional to auditing? So obviously the fact that there's a term called power sellers and the views and the ratings are there, that's a big significant part of that, right? You've got to have a notification system. If I want to bid on an item in a particular eAuction software, do I just have to sit there and watch the item the whole time? Well, sure if it's a 15 minute auction, but if you've ever purchased on eBay, these things are usually going on for many days, right? You put it in there and I don't remember the default it's been a bit, but it's like a week or eight days is the default.

So if I put a bid and then I go back and get busy, but that item was important to me I should be notified proactively if somebody outbids me. And then you've obviously got to have with that, the maximum bid capabilities and then it'll notify me that I've been outbid, but my max bid has kept me in the game, but I'm coming up on my max bid if I don't want to lose the item.

CHRIS: So one of the things I would say to those features is if you're hearing these features and you're thinking, "I don't necessarily need these for my business." I would suggest considering thinking what variation might your business benefit from over the long term. And if you're thinking "my business does need these things, but they're even more high fidelity than what you guys are talking about," I would also note that we are going to be going into a lot more detail and more of our multi-part series videos. So I just want to encourage you, these are some of the core features in an eAuction sites that you ought to at least allow yourself to consider and allow yourself to think ahead, three to five years in the ideal scenario, would this be something you would need to have thought of and planned for?

And so absolutely I could not agree more, Ron, with the concept of validating, making sure that these accounts have the proper validation and verification and making it a self-service process is effectively a requirement at scale.

Whenever we work with clients, our goal typically is to help them go from a SaaS-based eCommerce model that they've really been painted into a corner with to a very catered, integrated, and self-service model. And so that really requires not just the technical solution, but also the business solution of identifying we're going to make this as self-service as possible. We can execute on the technical application of that. It's important for you as the business owner or as the leader of the technical side of this, the planner, et cetera, for you to determine how does the business need this to go.

RON: Right. Yeah. Good points. Couldn't agree more on that with the validation. And again, Chris made a reminder that this is a multi-part series. We will definitely drill into this. This is, as the overview webinar today, we're just going to do a high level skirt across these and dive in much, much deeper into each of these as we go forward in the series.

So the next thing we'll touch base on is obviously the ability to take money and ship the product, right? I mean, that's the basics have the auction once you get through the timed part of it. You've got to have a platform that can take multicurrency payment types. So some of the thing you got to think about here, am I only dealing with North America? So now do I have to deal with just Canadian dollars and US dollars? What happens if somebody overseas orders? I've certainly gone on eBay and purchased things overseas.

Am I dealing with the EU where I have to deal with that tax? How am I going to handle with shipping logistics? If I put a flat rate shipping of $6.95, and somebody from Europe buys this item, it's going to cost a heck of a lot more than that. So how am I going to deal with that? So there's a lot of implications you want to think about on the platform, on how you want to allow that. Are you just going to force everybody to only be from Canada and America? And then even then, are you going to add French and Canadian dollar currency exchange? How going to deal with returns if you're also dealing with overseas, things like that, right?

So simple things like handling different payment types, shipping, logistics, tax calculations, and returns. That's kind of the biggest things that you want to talk about. And then obviously the big one we talked about a little bit on a previous item is the status of your auction, keeping you up to date and the ratings, right? The ratings and the reviews. Chris, we you got anything to add on?

CHRIS: I think you nailed it. It's really important and there's a lot of depth to it. Absolutely fundamental to the business. Couldn't agree more.

RON: So the next one is almost like a standard traditional eCommerce platform feature, right? Whenever we go to a website that's eCommerce the big thing is we want to go to the catalog, right? We're online shopping and we're looking at a catalog. And an auction site really is no different and that's kind of the difference between if you look at the features of an auction site, you've got to be able to go in and find things. One of the auction sites we worked with was a real estate auction site. And so they had all kinds of different buyers and people that would list those properties, right? It might be a single person listing a property or an agency broker with many different listing agents or an agent listing a property.

But the buyer profile is just as different. They could be a single person looking for a house. You know, we live here in Austin, so a single person moving to Austin might come in here and say, "All right, I'm looking for a home for my family. It's got to be able to have four bedrooms, three baths." So all the basic type of filter stuff, but even more importantly, here in Austin, we've had such an explosion recently, and it's not just a lot of people moving to Austin. It's a lot of investors coming to Austin, looking for homes to come in, fix up, and flip. So investors are coming in. They want to be able to go. "I'm looking for all properties of between 2,000 and 2,400 square feet on a quarter acre or smaller." So they've got profiles, and so they want to come in and put alerts and be alerted for every single property that comes in and potentially bid on all of them. So you've got power buyers as well as power sellers.

So the ability to have an extremely robust catalog that cannot only display and show and compare those different items you might want to be bidding on. But the ability to find all the information about it, quickly. Things like, "is it an inventory? How much is shipping? How long is it going to take to get here? What is the pricing? Is there any really technical information? Do they have enough information about liens on the property? Is it in a school zone? Is there shopping nearby?" All the things that you would expect to see on Zillow—does your auction site if you're dealing with real estate offer all that same kind of information that someone looking for real estate would be expected to do?

But if your auction site is also dealing with Pokemon cards, then what does that auction look like? Because now they're looking for card ratings, is it actually sealed? Is it a card rating? What's the condition? Same thing with music. I buy a lot of used vinyl. I'm constantly, when I go to these auctions, looking for what is the condition of the vinyl? Is it new? Is it used, is it repop, things like that. What do you have to say about the catalog, Chris?

CHRIS: I think fundamentally the catalog is kind of the heart of being able to interact with the site. This is something that has a lot of depth to it as well, specifically, really looking at performance, customization. And as you talked about, Ron, there's so much nuance depending on how the business works. And so what I would leave the audience with on this one is to consider where is your business going to go over the next three to five years? And what audiences are you working with? Because you might need to have a different presentation by audience. You may need to have different kinds of capabilities at the core of your eCommerce auction platform to be able to deliver on different mediums. And so this could be mobile and tablet, as well as a typical web browser.

They could also be using a kiosk type of a model or an integrated model, and the list goes on. And so think about where you're going over the next three to five years with this. This is obviously the heartbeat of the eAuction system being able to interact with the items quickly and effectively. And frankly, the way I would say it is if your eAuction platform doesn't meet a baseline standard, it simply will get rejected by users.

RON: Yeah. Good point. And you brought up a really good point that I know our platform does that I haven't really seen elsewhere. You know, when you go buy a common eCommerce platform one of the things people do is they all go out and look at themes and they think that the styling is, and the styling represents the functionality, but it really isn't, right? It's just like, that's the color that we're going to paint the house. That's not the house. That's not the layout of the house or the functionality. It's just, did we throw shutters on it? Did we put a nice front door and what color do we paint and stain the doors and shutters. And that's kind of what you just mentioned about the different layouts.

One of the things our platform can do that I haven't seen [on other platforms] is we can have different styles and layouts within a single product catalog. So in my example, I gave a minute ago, if there's a completely different layout or a different number of features that need to be available for a used vinyl record versus a piece of real estate, then maybe we need to have multiple types of templates for the different types of auctions there are. Which kind of brings me to the next one when it's different types of events, those could be the different types of auction types. So this kind of falls into two buckets, the different types of auction types might be online, in person, time-based events. Is there reserve, no reserve events, custom events?

Silent bidding is one that we came to with the real estate, right? And group-based events. So that could be different types of events, but then different types of events could be classification of products. So for the vinyl records, I have to have maybe it's vinyl records, sports memorabilia, Pokemon cards, all the things that are collected that have a condition and a rating and things like that have a different type of layout than real estate, which has to have things like, is it within walking distance? Is it in an HOA or a HUD? Are there schools nearby? What's the location of the property? Does it have a survey map? All those different types of things, it'll have nothing to do with a vinyl record, right? So you might even have to have within a single catalog, multiple different types of layouts for posting the auctions, which is a very technical thing versus the different types of auctions just based on time reserve, no reserve, which is more about the features of the auction platform.

The last thing we'll talk about is how do you improve the eAuction tools, right? Where is my business intelligence coming from? How do—if Chris and I were running this auction platform—how do we make decisions for the business going forward the next three to five years? How do we grow the business? So one of the most important part and crucial elements of the platform is the analytics, right? If we have data, data tells us things. So the platform's got to be able to not only just capture the data, you want to have a module that's either an AI, a BI, or a machine learning module. So business intelligence, artificial intelligence, whatever it is, we want to be able to go in and have things like, "Hey, we noticed that these types of auctions typically run longer and we have more than X% of those auctions that people never buy and never close. What's the problem? How do we help our sellers do that? Because partly how we make our money is we take a small cut of each auction if that's how our auction runs, right?"

If there's a problem with the technical layout or the information or the experience that users are having that's causing them to leave, and it's not the items, then how do we know? If it is the items? Are we not showcasing them correctly? Do we not have large enough pictures? Do we not have the rating of the memorabilia? So that the most important elements that they need to know, people are having to just type that manually into their descriptions. And so the buyers can't find and filter on that.

What if I wanted to buy any sports cards, but I wanted ratings only of 9.0 and better? Well, then that needs to be a part of the filters when I go into sports memorabilia, because that's how I buy. And if you manually force them to type that into the description, I don't have time to go look through 10,000 auctions through every single one to find a card that I want to buy. So I'm going to go elsewhere because I buy in lot. It's something that I buy a lot of. What do you say about analytics? Because I think that's probably one of the most important features, if not the most important.

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CHRIS: Yeah. And I think it's often overlooked and this is really one of the challenges with eCommerce software nowadays is that there are so many nuances that we would encourage you to be thinking about. And if you don't have them kind of from the beginning, then it can be really challenging, if not literally physically impossible, to get at that data. It doesn't mean you can't operate your business it just means you're losing out on an opportunity.

There's a big opportunity cost there with not choosing the right platform and partner where they're going to basically force you to think about these things and kind of confront you with them as a business owner, and as a leader of your division, et cetera, in a way that you're going to really think through how you need to operate your eAuctions platform. So absolutely agree, Ron analytics, if you don't have them, then you can't make data-driven decisions for certain areas of the business. So it's absolutely critical.

RON: Yeah, I agree. And that really leads us into the summary, the eAuction platform, because to have that analytics and to have that information, to make those decisions, if those decisions say that we need to make a modification to the platform and the platform's not modifiable or customizable, we're still painted back into that corner you talked about. So the ability to customize, extend, enhance has to be core as much as the features and the capabilities of the platform itself. In my opinion, that means that development teams have to be able to get source code. So when you go looking for a platform, is it one that the vendor or the development team working and providing that to you are they going to hold it hostage?

Many clients that come to us, one of the things that they say is, "we have this platform, we've outgrown it, but now the development team wants to charge us $500 an hour and holding it hostage. And we just can't afford to pay them. And they're not providing it because the platform's not designed so it's costing us too much money." So aside from the extensibility, can your team, can you get a copy of that source code? Is it made available? Is it documented? Does it have a robust API? I was talking to a client the other day and they were talking about APIs and this isn't really auction, but since auction are basically based an extended eCommerce platform, if you look at different eCommerce platforms, WooCommerce is the most widely distributed platform in the world. And that's because it comes free with most WordPress templates, right? So it's out there millions of times, and WooCommerce is distributed.

However, as the most distributed eCommerce, we'll call it a plugin in the entire world, its API you would think would be incredibly robust since there's thousands, tens of thousands of plugins written to WooCommerce. But you go look at the API documentation and it exposes roughly 400 or 500 endpoints to the API. And we can go into that later in detail. The last time I looked at our API and actually counted our API extended over 10,800 endpoints. And I think the last time I counted was well over two years ago, I have no idea what it is today. Can you imagine almost 11,000 endpoints compared to 400 when a developer looks at that and sees a fully developed and documented API, literally exposing every single capability into that API, it makes it just that much more extensible and capable, right?

CHRIS: Yeah. Orders of magnitude it's like comparing a go-cart to a rocket ship. And fundamentally what you really want is a go-cart that can turn into a car that can turn into a full truckload that can then turn into a jet liner that can then turn into a rocket ship. And you've got to be thinking about this and it is the reality of operating a business. And it's a reality of expectations that your end-users have. And if you think about it this is a dynamic game, and it's competing against everyone else out there that's doing the same thing that you are. And so your objective and our objective as your partner and as an extension of your team is to enable you to be the best by ideally in order of magnitude, but that's got to be at the back of your mind this entire time.

And we want you to know that this is what is constantly on our mind. We ruminate on it and think about it. How can we help you to better serve your customers in every high-fidelity aspect? And in the short term with the fundamental basics that your business needs to be able to it grow and scale?

RON: Yeah, that's a good point especially around talking about the growing and scaling. One of the things that I've seen is other people are like, "oh, well, we can get complete custom capabilities by completely customizing and building it from scratch." Well, that's not necessarily designed and built in an easy modular fashion. I mean, if you think about it, how many of us have played with Legos? Doesn't matter if I built a rocket ship out of Legos, right? Because I could turn around and take that same Lego set later, grab more Legos snap onto it and accompany that rocket with a booster or with a space station, right? It's made to be modularly extensible. And the great thing about it is I can go upgrade.

And that's the one thing that's probably the last thing I want to talk about. And then we'll go ahead and tie off this overview. The last thing is, make sure that the cut optimizations that either your vendor or you make, when the platform gets upgraded next year, it doesn't override everything that you've done. There has to be this architectural layer built into the architecture that says, I have a thing client overrides. So we have a two-tiered system in this client override over the core platform. So if we go in and make a customization for a client, we do that in this client override module section. So when the platform is running and a user uses the eAuction platform, it looks to see if there's a client override, if so it uses that. If not, it then fails over back to the core functionality. So a year from now, when we go back and update that core code, we don't override the user functionality and lose all of that custom capabilities that we've done.

CHRIS: Yeah. That's right, Ron, and one of the interesting things about this is as the system is more and more automated and scaled up, customizations can affect the overall cost and the overall timeline. And they can create an inertia around delivering more value to the end user. So you can organizationally create an inertia within your software if the software itself doesn't have a great architecture for customization. And so this is kind of where you can get yourself into quicksand, if you will, technically, and create this really giant bottleneck that just kind of continues to slow everything down over time. So not only do you want to be looking for the ability to customize, but then so what type of customization and kind of what pace can the customization be completed at and then maintained at over time.

RON: Yeah, I totally agree. Well, thanks, Chris, I think that about ties off and covers the basics. As you can see folks, there is a lot to an enterprise in a robust eAuction platform. So there's going to be a lot of different follow ups to this. So stay tuned as we produce the next chapters of this eAuction series and if your company needs a robust eAuction platform, or if you've got questions right now, give us a call or visit us at clarity-ventures.com and schedule a demo with an eAuction expert. See you on the next webinar. Thanks Chris.

CHRIS: Thanks Ron and thanks everyone. Bye for now.

 

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