BiG DEAL : BiG Auction Model #1 : Discreet Bid
BAM 1 | DISCREET BID AUCTION
DEFINITION | High applicability to business cases where the seller doesn’t want to divulge the price (keep it discreet).
MODEL/TYPE | MarketPlace product listing.
DOMINANCE | Skill (skill vs. chance)
BiG DEAL revenue:
- Product listing fees
- Consumption of BiG Tokens to convert to PLAYs
- Percentage from the success revenue
- Sell services | High
- Sell goods | Low
- Sell experiences | High
- Sell digital assets (NFTs) | Low
INTERBIDDER BID PRICE | Closed
TOKEN ESCROW (WINNER BINDING) | No
AUCTION TIME SENSITIVITY | Runs over days or till inventory lasts
BOT BIDS POSSIBLE | No
MULTIPLE BIDS FROM ONE PARTICIPANT | No (but can be switched ON by the auctioneer)
BID OPPONENT | The house
- Multiple winners possible
- Everyone above/below the discreet price fixed by the auctioneer
WIN WIN WIN applicability | High
- Auctioneers win | Selling inventory without revealing rates
- House wins | Revenue from listing and success fees
- Winners win | They get the best deal at their rates
- Non-winners win | Their contribution will be carried forward in the next deal thus they don’t lose.
Discreet Bid (BAM1) is a MarketPlace model. It is open for sellers to list their products on the platform (after compliance checks are cleared by the BiG DEAL platform). The Discreet Bid model is perfect for business cases where the seller wants to keep the selling price discreetly.
Example | Think of a luxury hotel selling rooms. The room rack rate might be $500 per night, but the hotel is open to selling the room inventory at $200 per night due to slack season. But luxury hotels would never announce deep discounts as it hurts their brand and business in the long run. How do you then sell?
Welcome to the Discreet Listing System by BiG DEAL.
Being a MarketPlace, the hotel will register as a seller on BiG DEAL. The hotel would be able to list its inventory on BiG Auctions for a hidden (discreet) price. Let’s assume the discreet price as set by the seller is $200. Buyers (guests) would be able to bid on this. They would be shown the rack rate of $500 (or a price mentioned by the seller), but nothing else. Each buyer bids as per their best guess — and what they are willing to pay. Each buyer who places a bid of above $200 (the secret price preset by the auctioneer) will be a winner and eligible to book the room. The auction closes either on a particular fixed (pre-announced) date or when the inventory is completely sold. Each participant/bidder only sees their bid amount. Other bid amounts are kept discreet. The advantage | The seller can sell discreetly without revealing that the hotel was ready to sell its inventory as low as $200 per night. This saves the hotel’s brand from taking a hit. The discreet/secret price is like a threshold price — everyone who bids above this price will automatically be deemed to have won. So, we can have multiple winners.
Example of ‘multiple winners’:
- Suppose we have a luxury vacation package worth $4,000, but the seller is happy to sell it for less. So, now, when the auction closes, these are the top five bids: $3,100 | $2,499 | $1,815 | $1,201 and | $1,100.
- Here if the seller is keen to make sales and is willing to discreetly accept all bids above, say, $1,200. Then our ‘secret price’ becomes $1,200. If there are any bids above that amount, they all win. So, in the above example, there will be a total of four winners.
- This means there would be a total of four winners as follows: $3,100 — Winner (highest bid) | $2,499 — Multiple Winner (above $1,200) | $1,815 — Multiple Winner (above $1,200) | $1,201 — Multiple Winner (above $1,200) and | $1,100 — Non-winner (below $1,200).
- So, each of these winners would now be offered the chance to buy one holiday package (to redeem at any time within the validity period) at the price that they offered, without knowing what anyone else might be paying.
- Since this is non-binding, none of these winners are obliged to go ahead though. They can simply not go ahead. All they lose is their bid cost.
- So, ‘bid your best price’, and you never know, the seller might say YES!
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