auction
Finance

Whose Price Is It Anyway?

The pricing of a product or service can define the success or failure of a business; too high and you’ll alienate customers who won’t be prepared to pay what you’re asking, too low and you will lose money and risk becoming unprofitable.

Fixed pricing, which has long been the standard in commerce, has become our norm, but it gives businesses and customers little room for negotiation. Since pitching your pricing right is imperative to success, it seems illogical that the predominant way of doing so allows no market intelligence or contribution from the buyer. So why is fixed pricing the accepted norm? And what if there was a better way to judge market value and the real price people were prepared to pay? If businesses are to maximise the value of their goods, services and even their staff, this needs to change.  

The difficult economic climate and dynamic pricing pioneered by cheaper airlines has paved the way for a new wave to enter the pricing world – enterprise auctions. For many years now, we have seen that when it comes to buying a cheap seat on a flight, if we get in early, we’ll most likely get the best deal and as supply goes down and demand up, we’ll have to pay more.

Enterprise auctions take this one step further, allowing businesses to sell for the maximum value to the buyer prepared to pay the most. In the current climate, where businesses are under increased pressure to deliver more and generate better value, auction technology is emerging as the ideal mechanism for pricing goods or services appropriately. Sellers can be assured they are getting the best price, while buyers have an opportunity to contribute and pay what they believe something is worth.

Auction technology can be applied across a broad range of businesses and for different uses. We have seen auction platforms created to fulfil a diverse variety of business requirements from selling off depreciating assets, such as used cars or mobile phones, to rebalancing an insurance client’s underwriting capacity or helping to open up markets around the world for the sale of artworks.

In future, successful companies will harness the potential of auctions beyond their traditional use as a sales platform. Imagine for example, using an auction platform as an HR tool and the potential savings if businesses could auction off staff capacity between departments. Live online auctions are worth over $1 trillion worldwide and the potential for the technology is exciting - crossing every sector, territory, and currency.  

As well as helping a business to understand the true value of what it is selling, online auction platforms make the sale accessible to everyone, opening up new territories globally. Goods can be sold around the world and the technology can be customised to different languages, time zones and currencies. Auctions can be executed very quickly and overheads are reduced, so as well as maximising the price sold, even more value can be generated.

In some ways auction technology is taking us back to the days of bartering, but utilising technology to make the process as streamlined and efficient as possible. Auctions guarantee that the seller sells the product for its true value – since the price achieved is what the market is prepared to pay – as well as supporting issues like compliance and transparency.

As the old adage goes – ‘something is only worth what someone is willing to pay for it.’ Nowhere is this truer than auctions – through embracing this technology a business can be sure that they are selling for the optimum value and pricing their products perfectly.

 

Phil Bird is CEO of enterprise auction platform at Perfect Channel

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Phil Bird

Phil Bird is CEO of enterprise auction platform at Perfect Channel

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