[meteorite-list] Steve Arnold's Famous Reverse Auction
mexicodoug at aim.com
mexicodoug at aim.com
Tue Apr 29 02:00:46 EDT 2008
Hi again Steve #1,
"AND having said ALL that, I don't even know if I will call this a
"Reverse Auction."
Agreed, that sounds to me like a Liquidation Sale, or maybe an
Inventory Annihilation Sale, like a car dealership might have. Any way
you put it, it sounds like you are making an effort to open serious
opportunity. See my comments below regarding a real reverse-auction*.
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).
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 (?) ...
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.
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 !!
*This is a standard reverse auction. It is basically a want ad. For
example:
Doug:
I am looking for a specimen of Johnstown ADIO minimum 5 grams weight,
maximum 25 grams, with some fusion crust.
Bidder 1: Offer 8 grams at $W
Bidder 2: Offer 5 grams at $X
Bidder 3: Offer 20 grams at $Y
Bidder 4: Offer 12 grams at $Z
Auction closes, no more bids allowed.
X>W>X>Y>Z
:. Bidder 4 wins and must sell Doug the 12 gram piece (he would
definitely hope to buy!!!) for $Z.
Best wishes,
Doug
-----Original Message-----
From: MeteorHntr at aol.com
To: meteorite-list at meteoritecentral.com
Sent: Tue, 29 Apr 2008 12:18 am
Subject: Re: [meteorite-list] Steve Arnold's Famous Reverse Auction
Hey Guys,
I really didn't want to get into this yet, as I wanted to be the first
to
try this on Ebay. Talk about it too much, and someone else might try
this
before I get to do it first!
But I will explain it so you guys don't get too confused.
Ebay has an Auction format and a "Buy It Now" feature.
Yes, "Buy It Now" is NOT a true "auction," even though most people
think of
Ebay as an Online AUCTION Site. With "Buy It Now" sellers can place
items on
sale for a fixed price. As a seller, if you want to discount things
for 5%
or 50% or 90% off some of your items, you can. Michael Cottingham had
a 40%
off sale for a few days, just a couple of days ago. So I am sure most
all of
you are aware of this Ebay feature.
Since, so many people seemed to enjoy my so called "Reverse Auctions"
I had
in the past, I thought "Hey, why not do it on Ebay?"
The problem with doing it the old way was that there was a LOT of work
on my
end, lowering prices, dealing with an influx of emails on people that
wanted
to buy it at the new lower price. With Ebay, it will be much easier to
do
this.
So that is my plan.
My email earlier was simply an attempt to contact some of you that have
previously bought from me, people that enjoyed the process. I wanted
to talk
with you guys off line about some things.
Of course, in my description on the Ebay lots, I was going to explain
how I
was going to progressively lower the prices, in my "Reverse Auction"
style,
starting with my asking price, then maybe a day later, putting a 10%
discount
on the ones that had not sold. Then maybe the next day, putting a 20%
discount on the remaining ones. This keeps going until everything is
sold, or
until I raise enough cash and decide I don't want to sell some or all
of the
remaining at too low of a price.
The opposite way of doing this is with a normal auction with a reserve
price, or at a starting price.
Theoretically, a lot might get down to 99% off, before someone "Buys
It
Now." If the lot was a $1.00 item at the start, then it would then be
marked
down to $0.01. If it was a $1,000.00 item, then it might go down to
$10.00.
In fact, someone might not even pay $0.01 for some meteorites. It
happens
that some "Normal" auctions start at $0.01 and the seller hopes that
the bids
go up, yet sometimes no one even bothers to bid once on them, so there
is no
sale at $0.01.
Is it a "scam" to start high and then lower the price until an items
gets in
a price range that someone decides they want to buy it? I don't
really
think so.
If I think a 100 gram Goa is worth $1/g or $100, I might start it out
at
$100. If someone likes that rock, and agrees it is worth $100, they
can "Buy
It
Now" at that price. If not, I might drop the price with a 10% of
Sale, and
it is now $90. If no one likes that price, and I want to go lower, I
can
offer a 20% off price, and thus the "Buy It Now" price is temporarily
at $80.
And so on. If I have 2 Gaos up, each 100 grams, and one is oriented,
and the
other isn't, someone might jump at the $90 price, while someone else
might
wait until the price gets to $50 to Buy the nonoriented one.
In fact, I think some dealers put "retail" prices on their web sites,
but if
you call them, or email them they are willing to lower the prices to
make a
sale. Maybe the first day they put something up, they might not sell
something too discounted. But talk to them a week later, or a month
or year
later,
and sometimes buyers can talk a seller down. No scam involved.
Is this a gimmick? Well, I guess it depends on the definition of
"gimmick." I would tend to think it is "marketing." Of course, it
being on
Ebay, no
one is forced to participate. Is Ebay a "gimmick?" Is "Buy It Now" a
gimmick? Is offering a discount a gimmick? Is "Free shipping" a
gimmick? Is
saying "hurry up and buy before I sell out" a gimmick? By a broad
enough
definition, about anything can be called a gimmick.
AND having said ALL that, I don't even know if I will call this a
"Reverse
Auction." My original email to the group only asked if anyone here
had
participated in one of my "Reverse Auctions" of the past. Maybe my
previous
"Reverse Auctions" didn't fit the legal definition of a true auction,
but those
that enjoyed participating in them in the past, know what I meant when
I asked
my simple question to contact me off list.
Doug mentioned, this more as a "Going out of business sale" format. I
would
agree, with the exception that I am not "going out of business."
Maybe it
would be best compared to a furniture store that is having an
inventory
liquidation sale. The goal of the store is to move out enough
inventory so
there
is enough room for the new inventory coming. The sale gets better and
better
each week, until there is the floor space for the new, then the sale
goes
off. You expect the best stuff to go early, and real bargains can be
picked up
on items that others, for whatever reason, don't seem to value.
Maybe if you have had a yard sale, you know that over time you get to
be
more flexable on price, often lowering prices, maybe more than once,
over a
weekend sale. At the end of the sale a guy shows up with a truck and
offers
you
$20 to haul it all off, and you are happy to take the deal!
I had items in previous auctions sell for 80% off what my first asking
price
was. In those cases, either I totally missed guessing what the real
value
was, or someone got a real sleeper of a good deal.
"Sniping" can occur, but it happens EARLY instead of at the last
second.
I have just acquired a lot of inventory some of which, to be honest, I
don't
know what it is worth. I could put it on Ebay, and let the price go
up, but
that requires I sell it. With a reverse auction, someone could offer
me a
trade for something, as the price is going down, and if I wanted to
take, I
could tell them to "Buy It Now" and I could take barter instead of cash
or
paypal. With and absolute auction, you don't know until the very last
second
what it will (or will not) sell for.
Anyway, my request of asking those of you that have done it before, if
you
enjoyed it, please email me off list. I still want to chat with you.
If you didn't enjoy the process in the past, I would have to assume
that you
didn't participate, or you were too greedy, hoping the price would go
down
one more time, and someone else jumps in and gets it before you do.
If I do end up doing this on Ebay, by all means, if you think it is a
scam,
and you don't want say a 3mg crumb of Chassigny from the Natural
History
Museum in London for $100, or $90, or $80, or $70, or $60, or $50, or
$40, or
$30,
or $20, or $10, or $5 or $0.01 by all means don't bother
participating.
In fact, there are a lot of people that might like the Chassigny at
$10 that
would hope you DON'T show up and "Buy it Now" at $20 and you get it
instead
of them getting it.
Maybe I shouldn't have said that? Now no one will probably want to
say
anything nice about it hoping to run off all the competition. Drats...
Steve Arnold #1
**************Need a new ride? Check out the largest site for U.S. used
car
listings at AOL Autos.
(http://autos.aol.com/used?NCID=aolcmp00300000002851)
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