New Auctioning Model with Cars and Online Shopping
Car auctions have been going on for years, usually in a descending-bid auction based on the context of Forbes’ article. People have learned to work the system to get what they want while ‘newbies’ are left behind for not knowing the simplest of information such as the “handshake deal” that can occur in a back room if a car doesn’t sell on the auction block. However, the Finest Automobile has developed a new, effective way to appeal to the modern-day generation who prefers the ‘perks’ of online shopping over physically traveling into a store to buy an item.
In this new model, the previously one to two-part in-person auction (based on the original auction and possible back room deal) is split up into a two to four-part auction process consisting of a variety between in-person and online auctioning. In the first portion of the auction, the car is originally placed online with extreme detail before the in-person event. Similar to other forms of online shopping, the car’s features have been photographed in over a hundred photos in order for buyers to have all the information available to them before they make their ‘purchase’, or participate in the auction in this situation. Part two of the auction takes place during the day of the auction where people most likely utilize either the first-price sealed bid auction or the second-price sealed bid auction due to the auction taking place over a variety of platforms (online, calling into the auction by phone, or in-person). The third and fourth portions of the auction devised by Finest only occurs if one of its cars does not sell the day of the auction. In this situation (part three of the auction process), the auction’s type is most likely either a first-price sealed-bid auction or an ascending-bid auction based on the car being put up for auction only on an online platform after the live event. During this portion of the auction process, only those people on Finest’s client network are eligible to bid online for the following 24-hour period. Although the entire new auction process could be seen as putting in more effort than necessary, it pays off in that its “more accessible and less daunting to younger generations [and] increases the overall chance of a sale” according to CEO of The Finest Automobile Auctions, Bradley Farrell. In the fourth and final portion of the auction process, the 24-hour bidding did not end at the highest bidder. Instead, participants in the auction receive a last-chance to make an even higher offer for the car, but it doesn’t end there. Any time someone makes a new, higher offer, a two-minute clock resets until no one else offers a higher bid. Due to this resetting clock, the auction can go on for as long as it prefers. Unlike the old model where bidding takes place over some form of strict time period, Finest’s new auctioning model extends the time period rather than pressuring the buyer (for example, a buyer pressed by the shortening time period of a bid could overestimate their value of the car and bid a higher amount than they would have preferred if given the time to properly analyze their personal value of the car).
The effectiveness of Finest’s new model for auctioning does not end in its theory, as the results speak for themselves: at a recent auction in June, Finest sold 63% of their cars coming very close in percentage to what a “more established auction house may sell”. The Finest Automobile Auctions utilizes the connectivity of modern technology to out-source their cars and not only reach a wider audience with their auctions but integrate an already existing system (i.e. online shopping) to their auctioning model in order to benefit from the latest technology-driven generation.