"Buy now option" in Penny Auctions

Is there a feature that you would like to see added to Enuuk Auction Platform?
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cynic-
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"Buy now option" in Penny Auctions

Post by cynic- » Mon Feb 28, 2011 4:30 pm

Hello
Most Penny Auction websites allow users to buy items at the regular price, minus the amount of bids already purchased. I wonder if this feature is enabled on Enuuk platform, still can't find it ;)
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RWAP
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Re: "Buy now option" in Penny Auctions

Post by RWAP » Mon Feb 28, 2011 5:04 pm

No, this is not part of Enuuk - actually it is not something I have ever thought connected with Penny Auction sites (only tried a couple and neither offered this function so far as I recall).

Presumably, this only works if an item has a reserve price on it as well - otherwise the other bidders would not be happy!

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Re: "Buy now option" in Penny Auctions

Post by cynic- » Tue Mar 01, 2011 10:08 am

I found this feature on bidrivals, for example on this item :
LINK

It's interesting to see how the "buy now" price is calculated, with the "Bid refund" especially... if you placed no bids on the item, it's more expensive than the retail price of course ;)
I guess there's a reserve price of course
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Re: "Buy now option" in Penny Auctions

Post by RWAP » Tue Mar 01, 2011 10:27 am

Hmm - this is different I think -

Basically they must have several of the same item - so you can either bid for it, or buy it now instead to purchase a second one.

There is no sign of there being a reserve price on the original auction - see
When you decide to buy the product you will no longer be able to take part in the auction, and any BidAgents you have placed on that auction will be cancelled and the remaining BidAgent bids returned to your bid account. The auction will continue uninterrupted for all other users.
From my experience, it is rare to have a reserve price on a penny auction, as why would you use up bids you have had to purchase in order to just meet the reserve price....

Thinking about the example you have given, I would actually steer clear of this site. For example if I had been bidding against you, and used up 20 bids to be the highest bidder, then you decided to buy it now, I presume I would have lost the 20 bids I placed, even if no-one else comes along to bid against me. I would not be happy!!

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Re: "Buy now option" in Penny Auctions

Post by cynic- » Tue Mar 01, 2011 11:04 am

RWAP wrote:Basically they must have several of the same item - so you can either bid for it, or buy it now instead to purchase a second one.
That's right.
RWAP wrote:There is no sign of there being a reserve price on the original auction - see (...)
From my experience, it is rare to have a reserve price on a penny auction, as why would you use up bids you have had to purchase in order to just meet the reserve price....
Of course, it is even forbidden in penny auction sites. Like admin bots. But maybe the reserve price is only applied if the buy now option is selected ?
RWAP wrote:Thinking about the example you have given, I would actually steer clear of this site. For example if I had been bidding against you, and used up 20 bids to be the highest bidder, then you decided to buy it now, I presume I would have lost the 20 bids I placed, even if no-one else comes along to bid against me. I would not be happy!!
Having several of the same item, this is not a problem, you can "buy now" the Google Nexus(1) for example, and let everybody bid on Google Nexus(2).

You're right, it would not be fair to let people lose their bids on the same object :)
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Re: "Buy now option" in Penny Auctions

Post by RWAP » Tue Mar 01, 2011 11:42 am

Hmm - I wondered why the bidding had been paused, and then I see that there is actually a reserve price - 1% of the Buy Now price...
If there are no more bids in the Bonus auction before the bid price has reached 1% of the Buy Now price, the reserve price, the auction will be paused and everyone that have placed bids in the auction will receive a Bonus. The Bonus is calculated as all bids placed in the auction + another 50% of all bids placed in the auction.
It may well therefore be that the Buy Now price disappears once the reserve price is reached... However, what a bad way to run an auction - someone has used 114 bids (worth £47.88) just to find that the auction has now stopped because the current price is still only £3.35 compared to the reserve of £6.49)! In fact a total of 276 bids have been placed (worth £115.92 just to get within 1/2 of the reserve price).

My understanding of how this operates is as follows:

a) Bidder1 and Bidder2 place, say, 20 penny bids each on the item (costing 42p each in this instance, taking the total bid cost up to 40*42p = £16.80. Presuming the item price increases by 1p with each bid, the item price is then at 41p.

b) Bidder1 is the current lead bidder.

c) Bidder2 decides to place a block of 20 bids on the item (to be automatically placed) at a cost of 20*42p (8.40). 5 of those bids are used to make Bidder2 the current lead bidder
The cost so far to Bidder2 is (20+5)*42p = £10.50. The cost to bidder1 so far has been (20+4)*42p = £10.08
The item price is then at 50p.

d) Bidder2 decides that rather than keep bidding against Bidder1, he will use the Buy It Now - he gets the item for £649 less the 15 unused bids (649-15*42p) = £642.70. However, his overall spend is still higher than the market value of the item - £642.70 + £10.50, compared to £649.

e) Bidder2 is still shown as the highest bidder - what happens if the reserve price has been reached I do not know! Otherwise bidder1 needs to place one more bid to win the auction (ignoring the reserve price). He will not know that Bidder2 has used buy it now to buy a second item, so will not know that he has used up £10.08 worth of bids for no reason.

The other option is that as soon as Bidder2 uses the buy it now, that ends the auction, but then all of the people who bid on the item have lost out on the value of their bids placed....

This would really need some thought as to how it should operate without upsetting all of the bidders....
As you say, Penny Auctions should not have a reserve price, but then this link you provided seems to have a reserve price...

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Re: "Buy now option" in Penny Auctions

Post by cynic- » Wed Mar 02, 2011 4:37 pm

RWAP wrote:e) Bidder2 is still shown as the highest bidder - what happens if the reserve price has been reached I do not know! Otherwise bidder1 needs to place one more bid to win the auction (ignoring the reserve price). He will not know that Bidder2 has used buy it now to buy a second item, so will not know that he has used up £10.08 worth of bids for no reason.

The other option is that as soon as Bidder2 uses the buy it now, that ends the auction, but then all of the people who bid on the item have lost out on the value of their bids placed....

This would really need some thought as to how it should operate without upsetting all of the bidders....
As you say, Penny Auctions should not have a reserve price, but then this link you provided seems to have a reserve price...
Good explanation.
About e) Bidder1 will not know that Bidder2 has bought the item directly. Auction keeps going on with other users.
I would not apply "reserve price" unless "buy it now" is called by Bidder2
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Re: "Buy now option" in Penny Auctions

Post by RWAP » Fri Feb 17, 2012 3:09 pm

I see that Enuuk now incorporates a buy now option for Penny Auctions.

This is not exactly what was planned (and implemented) as above - I am notsure that many people would be too happy with the Enuuk version...

Under Enuuk if a bidder exercises the Buy Now option, their bid credits are refunded to their account, and they just have to pay the full buy now price. The user will then need to use those bid credits on something else.

However, all of the other bidders lose their bid credits which they used on the auction !!

When users are paying for bid credits, this seems a really bad idea and you could easily see how this would lead to fraud - set up a penny auction with a high buy it now price - when lots of bids have been placed, get a friend to exercise the buy it now option - they don't pay for the item, but everyone loses all their bid credits !! :o

At least the solution which was proposed by Cynic (which we implemented for him), seems much fairer all round. :)

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