| Auction Feature |
OptimalCommerceTM Platform |
| Buyer Benefits |
Supplier Benefits |
| Strategic Simplicity: Transparent |
Scheduled Discrete Rounds
Auction proceeds per a regular and fast schedule. |
A quick resolution to a transaction. |
Regular expectations of auction progress. |
Bid Time Masking
Masks the placement of other bids. |
Eliminates possibility of bidder collusion through auction software. |
Simplified auction process allows bidder to focus on their competitive advantage. |
Non-discretionary Bid Price
Bidders do not type in a bid price. Bid prices are fixed by the software. |
Eliminates possibility of bidder collusion through auction software. Simplifies monitoring process. |
Suppliers can bid faster since their only choice is to bid lower or leave the auction. |
Eligibility
Requires bidders to be competitive throughout the auction. |
Bidders cannot prolong the auction by jumping in and out. |
Suppliers know that failure to bid in one round removes them from competition. |
Uniform Prices
Uniform prices mean all winners receive the same price. |
Uniform pricing achieves better results than discriminatory pricing. |
Simpler and safer for bidders because each can submit their lowest bid knowing that they will not be penalized if the final price is different. |
| Superior Ergonomics: User Friendly |
Pull-down Quantity Bidding
Bidders do not have to type in a bid quantity. |
Removes a possible area for collusion. |
If every possible input is valid, then users receive fewer error messages and make fewer mistakes. |
Combined Bid Forms
All relevant information is found on one bid entry screen. |
Enables rounds to be shorter. |
Simplifies the bidding process. |
Active Bidder Verification
All bids must be explicitly verified. |
Process is auditable and resistant to bidder challenge. |
Further reduces bidder errors. |
Extensions and Recesses
Grants bidders additional time to formulate competitive bids. |
Buyers receive bids from all bidders. |
Allows suppliers the time they need to correct problems and modify their reservation price. |
| Precision Economics: Efficient |
Tie Breaking
No ties are permitted and the auction continues until there is an explicit winner. |
Rapid resolution of a transaction. |
Clear expectation that the winning bidder is the one with the best price. |
Exit Price
Bidders that cannot agree to the new bid price are allowed to place a last and final best bid called an exit price. |
This makes the auction extremely efficient with precision final pricing, yet does not allow bidders to nickel and dime each other and slow auction progress. |
Bidders can come closest to bidding their reservation price. |
| Optimal Design: Most savings |
Volume Adjustment
OptimalCommerceTM can reduce the volume of goods purchased to assure that suppliers will bid a sufficient excess quantity to result in a competitive price. |
Assures a competitive price. |
Reduces the necessity for a complete re-auction. |
Activity Rules
For complementary auction lots, ensures that all products maintain sufficient competition during the final stages of a multiple product event. |
Ensures that all lots offered at auction are taken and that the speed of the auction is optimal. |
Eliminates Winner's Curse and the risk that one product is better than another to bid on. |
Switching Rules
Auctioning complementary or substitute goods simultaneously allows bidders to bid across their entire production line. Implementation of a switching rule doubles the savings achieved from all the other software features. |
Total savings versus industry standard auctions is 5-10% of contract value. |
Allows bidders to bid across their entire production line and to bid in concert with their production decisions to increase the winner's profit. |
