webinarseauctions-chapter-7-part-7-guidelines-for-types-of-auctions Chris Reddick (President and CEO of Clarity Ventures) and Ron Halversen (Vice-President of Sales and Marketing at Clarity) discuss Vickrey reverse auctions and "buy it now" features. Part 7 of an 8-part series (Return to Part 6) VICKREY AUCTION RON: The final one is called a Vickrey Reverse Auction. The platform can bid on the user's behalf, basically like eBay. And that was the auction that I won last week that was on eBay. I went in and I was busy at work. So it was 2:00 in the morning before I went to bed. I was looking for some specific classic record albums, found one that I'd been looking for for a while, put in my max bid, and off it went. A lot of penny auctions can do that as well. The idea is to be able to feed off what the closest competitor is, plus a small step. So they'll come in, and, on certain auctions, they'll say, “increments around a dollar. Go ahead and put in your max bid.” So as soon as you're outbid, it'll increment by a dollar. It'll just take your bid by a dollar. That way it can keep you as the lead. And it'll just automatically happen via the online auctino software until either you're outbid or until you win the auction. BUY IT NOW RON: Now, the one thing eBay does, too, on that type of Vickrey Reverse eAuction, is there could be a “buy it now” option. That's the one thing—I don't know about you, Chris, but most of the time I'm looking at the buy it now option on an eAuction site because I don't want to deal with the max bid. I don't want a deal. I'm losing out on something. I'm very busy. So for me, it's like, “Hey, if I have 15 minutes and really sit down and find an album, and I really want it for $20, but I can buy it now for $23 and not deal with any hassle,” 99% of the time I hit the buy now. CHRIS: Same. Absolutely agree, yes. RON: So one of the things that that brings up—and I want you to really dive into this, you know the eBay thing. The only reason why the eBay thing works a lot is because, aside from the buy it now option, they've got this max bid capability, right? I've got this ability to set a reserve, and then I've got this ability to set max. And then the way that whole thing works, I want you to talk through that and talk about some of the different nuances and things that we can do in customizing these reverse auction websites for our clients. CHRIS: Absolutely. Whenever it comes to the mechanics of bidding, this is significantly going to drive the behavior of the users, so you can get a massive amplification of this bidding process and the value of the auction for both buyers and sellers by having these mechanics down. And in particular, like you were describing Ron, with some of the psychological elements of bids. Whenever a bid goes out and somebody who was in the winning bid position sees that, for some of these different types of auctions, it creates this psychological drive to then get the winning bid, and you end up creating a frenzy of sorts. CHRIS: Depending on the different auction type, it can be a frenzy on the seller side for certain reverse auction formats. But typically it's going to be on the buyer side. Ultimately, this focus is on items and getting a group of people focusing on it and really showing each other by their behavior, through their bids, that there is a certain value there. It ultimately creates the truth. It gets to the truth of what the value is for the items. In some cases, it can really get to the high end of the spectrum of where that true value lies. And that's really what our goal is for your eAuction platform, for your eAuction platform. And to be able to do that, we need to get that interaction. Continue to Part 8 to wrap up the webinar about types of eAuctions.
Chris Reddick (President and CEO of Clarity Ventures) and Ron Halversen (Vice-President of Sales and Marketing at Clarity) discuss Vickrey reverse auctions and "buy it now" features. Part 7 of an 8-part series (Return to Part 6)