eBay's 'Want It Now' format has one feature in common with genuine Reverse Auctions, namely that potential buyers post details of items they'd like to buy and wait for sellers to respond with suitable offers. But that's where the similarity ends because genuine reverse auctions have additional features: * In a reverse auction prices keep on going down, not up. * Suppliers compete against one another by reducing their prices until no one is prepared to go lower. That person is usually the winner and gets to sell his stock to the person who placed the ad. * Reverse auctions work much like items sold on tender where companies requiring goods or services invite offers from suppliers. All things being equal the lowest bidder wins the contract. But unlike the tender system, with bids normally left in sealed envelopes until the offer deadline expires and each supplier can bid just once, in reverse auctions all bids are visible and suppliers can continue bidding against one another until the lowest price is achieved. There is a downside to reverse auctions in that suppliers might get caught in a bidding frenzy in the same way buyers do in traditional auctions, and end up pricing themselves too low and actually losing money. The same could apply using eBay's 'Want It Now' feature, where it's common to see several seller responses and some sellers making regular repeat offers at lower prices to eventually win the sale. Want It Now is a great way to find customers fast but like reverse auctions there are problems to contemplate. Take your time with this new concept, study people placing and responding to posts, learn from their experience and incorporate this new medium slowly into your business |
