Today I’d like to discuss Purple Wave’s grouped extension feature. To our knowledge, we’re the only company utilizing this exciting twist to Internet only auction bidding. We rolled it out in December for an equipment auction and have been using it ever since. Here’s what it is and how it works.
The new grouped extension feature allows the Internet only auction to more closely replicate a choice sale at a live auction. When items are sold as a choice at a traditional auction, the winning bidder gets to select among a group of items at the winning bid price, taking one or multiple items with each item costing the high bid price. The auctioneer then sells the remaining items to other bidders, usually in the same way.
Take for example the equipment auction for which Purple Wave unveiled the new grouped extension feature. There were three 2004 John Deere combines. Let’s suppose for this example that there may be one that is more desirable than the others. Let’s take the example of a traditional Internet only auction where the one with the best current bid is listed first and the other two are listed directly after it in descending order of current bid. As the bidding begins to end, more bidders are bidding on the first item, the one for this example we’ve assumed is more desirable. This bidding activity causes the item to extend for a greater period of time than the two items following it. When the second-highest bidder realizes that he cannot afford to bid again on the first item and decides to try to bid on one of the other similar items, he cannot place more bids because the other items have closed at lower prices than he was willing to pay. Since he wasn’t willing to pay those prices on the other items until he was absolutely sure he wasn’t able to purchase the first item, he was unable to purchase any combine at the auction.
With grouped extension, any item in a group receiving a bid in the last few minutes will keep all of the items in the group from closing for a period of time. This new method solves the problem above by allowing the second-highest bidder on the first item to bid strongly on that item while knowing that he has the option to bid on either of the other two items should the price on his preferred item exceed that amount which he is willing to pay.
Hopefully this new feature helps address some of the concerns bidders have when wanting only one of several like-items in an Internet only auction. What do you think of this new feature? Let us know in the comments.