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Reverse Auction Sites

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Reverse Auction Sites

  1. 1. Reverse auction sites
  2. 2. Reverse travel auctions' history <ul><li>Reverse auctions gained popularity in the late 1990s as a result of the emergence of Internet-based online auction tools </li></ul><ul><li>FreeMarkets: Pioneer of online reverse auctions </li></ul><ul><li>Other companies rushed to join the reverse auction marketspace </li></ul><ul><li>business-to-consumer (B2C) auctions were created after B2B auctions </li></ul>
  3. 3. How they work, in general <ul><li>buyers name their price and invite suppliers to bid for their customer </li></ul><ul><li>In the PriceLine model, </li></ul><ul><li>the company selects </li></ul><ul><li>generic categories such </li></ul><ul><li>as a weekend in Paris. </li></ul><ul><li>It then negotiates with a </li></ul><ul><li>number of suppliers who </li></ul><ul><li>would be interested in selling </li></ul><ul><li>to PriceLine's customers </li></ul><ul><li>(the buyers) </li></ul>
  4. 4. Choose a reverse auction site - profile the types of hotels you found on the site <ul><li>Priceline is the most famous consumer reverse auction site </li></ul><ul><li>Hotels found: from 1 to 4 stars </li></ul><ul><li>Famous hotel brands (Marriott, Accor,etc) </li></ul><ul><li>Main touristic venues </li></ul>
  5. 5. Sites that give customers advice on using reverse auctions <ul><li>www.Bugdettravel.com </li></ul><ul><li>www.excellent-romantic-vacations.com/ </li></ul><ul><li>http://www.managingchange.com/dynamic/auctions.htm </li></ul>
  6. 6. List the key points <ul><li>3 companies dominate the travel auction scene: ebay, SkyAuction & LuxuryLink </li></ul><ul><li>The most substantial discounts will generally be on ritzy vacations, which have a higher profit margin built into normal prices </li></ul><ul><li>SkyAuction and LuxuryLink are travel agents that negotiate deals directly with hotels and airlines. </li></ul><ul><li>The last half hour is when 50 percent of bids come in </li></ul><ul><li>Purchases on the spot are rarely a good deal </li></ul>
  7. 7. Conclusion: how can a hotel best participate in a reverse auction site, if at all <ul><li>Reverse auctions work best when: </li></ul><ul><li>buying products where there is a clear industry specification for the item and recognised quality standards. </li></ul><ul><li>the supplier and manufacturer are well known and have a proven track record. </li></ul><ul><li>the industry does not suffer periods of shortages </li></ul><ul><li>after purchase service is minimal or very unlikely </li></ul><ul><li>distance is not an inhibitor to the supply or the service of the product. </li></ul><ul><li>the required item is difficult to find. </li></ul>
  8. 8. Links <ul><li>http://www.budgettravel.com/bt-dyn/content/article/2006/02/08/AR2006020801519.html </li></ul><ul><li>http://www.excellent-romantic-vacations.com/travel-auction-websites.html </li></ul>

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