Despite all the hype, the DubLi reverse auction system is emerging as a credible alternative to conventional auction systems. In a conventional auction items list at an agreed value by the seller and usually have a reserve price below which the item will not sell. Bidders place their bids until there is a clear leader and the bidder with the highest bid wins the auction. No rocket science here! In a reverse auction the seller will list their item at a price agreed to with the auctioneer. This is where all similarities end. the DubLi auction system has three auctions:
1. Bidders buy enough credits to place their bids. With DubLi a bid costs around £0.60. Every bid the bidder makes reduces the price of the item by £0.15. The price of the item remains hidden and appears as: ???, until a bidder places their bid and the price is revealed. Now the bidder can decide to buy the item at this point. If they 'buy' the item the auction stops and the item is sold. If the bidder decides the price is too high, they wait, but they run the risk of someone else buying the item.
2. Same as 1. until the the auction starts. Bidders can bid at any stage and the auction does not stop until either:
a. £0.00 is reached,in this case the bidder with the lowest or £0.00 bid wins; or
b. the auction runs out of time, e.g. 2 days in which case the bidder with the lowest bid wins. This auction produces some great bargains.
3. Same as 1. until the auction starts. Bidders must place 'unique' bids. If any two bids are the same those bidders are out of the auction. The person with the lowest unique bid wins. Therefore, a bidder may think:
What's the lowest price I could possibly pay for the item? and make that bid. Or:
At what price could I bid on the item and still save £200? and make that bid. Or:
What's the highest price I am prepared to pay for the item? and make that bid. If they make all 3 bids they have a greater chance of getting a unique bid and also getting the winning bid. This last auction is historically the most popular.
The reverse auction has an advantage of allowing bidders to bargain more competitively than a conventional auction. Those who are risk takers can get access to amazing bargains. One of the most extraordinary bargains I have seen was a condo on the Black Sea valued at over US $180,000 which sold at auction for under US $15,000! Before you think this type of auction sounds too 'ruthless' or too much like 'gambling'. The answer is that it doesn't need to be. As explained, auction 1. is not for risk takers. The item is already listed at the lowest legitimate price found on the internet. So no matter where people bid, they will get a bargain. So I hope you found this informational, if not interesting and please visit my 'About Me' page: http://myworld.ebay.com.au/771shaunm and view my store: http://stores.shop.ebay.com.au/GetzGear
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3 August 2009
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