REVERSE AUCTIONS

The Reverse Auctions feature is probably the most exciting implementation on A2ZProfiles.com.

In a normal auction, the highest bidder gets to BUY the item at the winning bid. In addition, the buyer often has to pay for shipping charges as well as any other incidentals. Similarly, the item owner often pays a listing fee for creating the auction and an additional success fee when the auction is closed successfully. The item owner is not guaranteed to receive the desired amount; at times the highest bid may exceed expectations but more ofen than not, the highest bid received falls short of the amount desired by the item owner.  

In our Reverse Auction, the single-lowest-bid (or the earliest bid received for the lowest bid value with the least number of bids) is the winner; the difference here is that the winner does not need to buy the item or pay anything else for it. The winner gets the item for FREE! All shipping and delivery charges are also taken care of. Similarly, the item owner also does not need to pay anything else apart from the initial listing fee. All the success fee and miscellaneous incidental charges have all been taken care of as well. More importantly, upon the Reverse Auction closing successfully, the item owner is guaranteed to receive the 'Desired Net Amount' specified when the item was listed.

Determining the Winner

In the above example, Bid#1 and Bid#2 are identical, so they are not considered as 'Single' bids.

Similarly, Bid#3, Bid#4 and Bid#5 are also identical and therfore also not 'Single' bids.

The same applies to Bid#6 and Bid#7.

Bid#8 is the only bid @ Bid Value $20.00 and is therefore considered 'Single'

Bid#9 is the only bid @ Bid Value $50.00 and is also considered 'Single'

Bid#10 is the only bid @ Bid Value $100.00 and is also considered 'Single'

By definition, the winner is the single-lowest-bid and from the above scenario, there are only 3 'single' bids and the lowest is Bid#8 @ $20.00.

Bid#8 is the single-lowest-bid and is therefore the Winner! 

In the situation where there is not one single-lowest-bid, the winner is determined as follows:

In the above example, there are no 'Single' bids - all bid values have more than one bid. In situations like this, we then identify the Bid Values with the least number of bids received.

Bid Value $0.01 has 3 bids: Bid#1, Bid#2, and Bid#3

Bid Value $10.00 has 2 bids: Bid#4 and Bid#5

Bid Value $10.50 has 2 bids: Bid#6 and Bid#7

Bid Value $50.00 has 3 bids: Bid#8, Bid#9 and Bid#10

From the above, Bid Values $10.00 and $10.50 have the least number of bids received i.e. 2 bids each

The lower of the two is of course Bid Value $10.00 and the winning bid must therefore be a bid at that Bid Value.

And since Bid#4 was received before Bid#5, Bid#4 therefore qualifies as the 'Earliest bid received for the lowest bid value with the least number of bids'. 

Bid#4 is therefore the Winner! 

Putting Reverse Auctions to Work

Example #1: Shippable Item - You have a car you want to sell quickly and at a value that you desire, say $5,000. You therefore create a Reverse Auction for your car as follows:

• Download a Reverse Auction eProfile Template suitable for a car and SAVE it to your desktop - the template is FREE. To download, go to ePROFILES - click ePROFILE TEMPLATES; click Reverse Auctions on the left categories options to display a list of Reverse Auction templates. Choose the appropriate one and download. 
• Rename the template you downloaded to your desktop to something more appropriate eg. HondaMN1200FL that references your car. Next, open the template for editing by double-clicking on it. Insert details including text and photos in appropriate spaces. Once completed, click 'Finalize eProfile' on the last inside page to save and lock all your changes.
• Before you create the Reverse Auction, make sure you have sufficient AZPs in your AZP Main A/C
• The Listing Fee is 0.2% of your 'Desired Net Amount' for your car i.e. $10 = 1,000 AZPs
• The Listing Fee is deducted from your AZP Main A/C upon creation of the Reverse Auction and is non-refundable except in a situation where your listing is declined for whatever reason or CANCELLED before being approved or declined. If you cancel after being approved, there will be no refund
• Click on the menu option: REVERSE AUCTION and click the 'Create New Reverse Auction' button
• Complete the form with all relevant and accurate details and check it thoroughly before clicking 'Create'
• The 'Desired Net Amount ($)' is the amount you wish to get for your car - i.e. 5,000
• The Listing Fee is automatically calculated and shown to you: this is the ONLY FEE you have to pay
• 'Is Item Shippable ?' - click 'Yes' : items that are moveable are shippable - all shipping charges are taken care of - you do not have to worry about paying for shipping charges
• Dimensions are entered in CM (centimeters) and Weight in KGS (kilogrammes)
• Shipping Charges / Success Fee / Miscellaneous Incidentals / Reverse Auction Value ($) - these are all automatically calculated by the system to give the final 'Reverse Auction Value in AZPs'.
• You are then required to indicate the 'Bid Fee (AZPs)' - this is the amount bidders must pay if they want to make a bid for your car. Members can submit multiple bids at different bid values but for each bid they must pay this Bid Fee in AZPs. Do not set it too high or you will restrict who can participate in your Reverse Auction. Setting it too low will result in more bids required to close your Reverse Auction. Use your own judgement but once set this cannot be changed.
• The system then automatically calculates the number of 'Bids Required to Close'.
• Bidders only pay the Bid fee for their bid submission. Their objective is to submit the single-lowest-bid to win your car. Even if the winning bid was say $4,000, the winner DOES NOT PAY the $4,000. The cost to the bidder was just the Bid Fee!
• If you were assisted by one of our Global Associates during the process, you must indicate who the Associate is at the bottom of the Reverse Auction creation form.
• Confirm that you have read and accept the terms and conditions and click 'Create'
• Your submission will be reviewed by us and upon approval it will appear on the ALERTS page as well as under the REVERSE AUCTIONS page and open for bidding!
• All bid fees received are held in Escrow A/C until the Reverse Auction is CLOSED or CANCELLED
• Once the Reverse Auction has received the required number of bids, it will be CLOSED automatically and the WINNER will also be identified automatically and accordingly as per above definitions
• You will be informed via email that your Reverse Auction has CLOSED and who the winner is etc.
• You will also be emailed with instructions as to how to proceed
• The winner will also be emailed similar instructions
• If there is an assisting Associate, the Associate will also be available to assist with the final details regarding transfer of ownership and delivery etc.
• Depending on where the winner is from, your car will be picked up by UPS and shipped to the winner with shipping charges taken care of by us. You will receive a Tracking Number from UPS to track the shipment.
• Once the winner receives your car, and we get confirmation of the delivery, we will transact and pay you for your car by transferring 500,000 AZPs (= $5,000) from Escrow A/C into your Main A/C. You can then request for redemption of these AZPs either into your Debit Card if you have one, or via Bank Wire Transfer to your bank account.
• The winner is happy to have won your car for a small bid fee; you should be happy as you got what you indicated you wanted for your car; and we are happy because you are all happy!

Example #2: Non-Shippable Item - You have a house you want to sell quickly and at a value that you desire, say $350,000. You therefore create a Reverse Auction for your house as follows:

• Download a Reverse Auction eProfile Template suitable for a property - the template is FREE. To download, go to ePROFILES - click ePROFILE TEMPLATES; click Reverse Auctions on the left categories options to display a list of Reverse Auction templates. Choose the appropriate one and download. 
• Rename the template you downloaded to your desktop to something more appropriate eg. SunsetVilla that references your house. Next, open the template for editing by double-clicking on it. Insert details including text and photos in appropriate spaces. Once completed, click 'Finalize eProfile' on the last inside page to save and lock all your changes.
• Before you create the Reverse Auction, make sure you have sufficient AZPs in your AZP Main A/C
• The Listing Fee is 0.2% of your 'Desired Net Amount' for your house (subject to a min. of $2 and a max. of $300) - so for your house it would be $300 = 30,000 AZPs
• The Listing Fee is deducted from your AZP Main A/C upon creation of the Reverse Auction and is non-refundable except in a situation where your listing is declined for whatever reason or CANCELLED before being approved or declined. If you cancel after being approved, there will be no refund
• Begin by clicking on the menu option: REVERSE AUCTION and then click the 'Create New Reverse Auction' button
• Complete the form with all relevant and accurate details and check it thoroughly before clicking 'Create' at the bottom
• The 'Desired Net Amount ($)' is the amount you wish to get for your house - i.e. 350,000
• The Listing Fee is automatically calculated and shown to you: this is the ONLY FEE you have to pay
• 'Is Item Shippable ?' - click 'No : items such as a house / building / land / services are non-shippable
• Success Fee / Miscellaneous Incidentals / Reverse Auction Value ($) - these are all automatically calculated by the system to give the final 'Reverse Auction Value in AZPs'.
• You are then required to indicate the 'Bid Fee (AZPs)' - this is the amount bidders must pay if they want to make a bid for your house. Members can submit multiple bids at different bid values but for each bid they must pay this Bid Fee in AZPs. Do not set it too high or you will restrict who can participate in your Reverse Auction. Setting it too low will result in more bids required to close your Reverse Auction. Use your own judgement but once set this cannot be changed.
• The system then automatically calculates the number of 'Bids Required to Close'.
• Bidders only pay the Bid fee for their bid submission. Their objective is to submit the single-lowest-bid to win your house. Even if the winning bid was say $150,000, the winner DOES NOT PAY the $150,000. The cost to the bidder was just the Bid Fee!
• If you were assisted by one of our Global Associates during the process, you must indicate who the Associate is at the bottom of the Reverse Auction creation form.
• Confirm that you have read and accept the terms and conditions and click 'Create'
• Your submission will be reviewed by us and upon approval it will appear on the ALERTS page as well as under the REVERSE AUCTIONS page - OPEN for bidding!
• All bid fees received are held in Escrow A/C until the Reverse Auction is CLOSED or CANCELLED
• Once the Reverse Auction has received the required number of bids, it will be CLOSED automatically and the WINNER will also be identified automatically and accordingly as per above definitions
• You will be informed via email that your Reverse Auction has CLOSED and who the winner is etc.
• You will also be emailed with instructions as to how to proceed
• The winner will also be emailed similar instructions
• If there is an assisting Associate, the Associate will also be available to assist with the final details regarding transfer of ownership.
• For high valued non-shippable items, a change of ownership will require a Lawyer to handle the transaction and we will appoint one to handle each case; the legal fees are all taken care of. You pay nothing.
• Regardless of where the winner is from, the Lawyer will arrange for the legal transfer of your house to the winner and at the same time arrange for full and final settlement of the 'Desired Net Amount' to you.
• Once the lawyer has concluded the legal transfer, we will transact the remaining AZPs in Escrow to the assisting Associate and the remainder will be kept by the platform. 
• The winner is happy to have won your house for a small bid fee; you should be happy as you got what you indicated you wanted for your house; and we are happy because you are all happy!

Click here to see how Reverse Auctions can be applied to various scenarios for different businesses.