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There is a reverse action every day at The everyday smack sale has a different item each day - give it a shot tomorrow !

So how does it work, to quote TechCrunch -
" Here’s how it works: an undisclosed quantity of a particular item (today it’s an 80 gigabyte Video iPod ) will be put up for auction, starting at its regular price and falling in price every few seconds. Users watch the price fall, torn between letting it fall lower and buying the item at the current price before the mystery quantity is sold out. There’s a forum for real time communication and the psychology sounds just nuts"

Just went and checked out the website and it seems interesting. The interface is clean and simple and it seems to offer value to buyers. Am airing my first reactions - feel free to comment...

1. Everybody who would be watching the auction would have a reserve price and if the price falls below that his propensity to go ahead an buy it would increase and this would only mean that items which are in demand (typically products just off the shelf) would most probably get sold at a price closer to the start price.

2. If I am doing a product launch I would be encouraged to use this route for my 'test marketing' studies or controlled product launches. Why do I think so,
  • Based on how the price moves after the reverse auction starts would give the company a great understanding of the acceptance of the product and the price that it has set for it.
  • The real time communication medium that it supports is where the company can get tons of valuable information that is going on in a buyers mind as he decides to wait or buy the product.
  • Companies can also gather good information about the kind of promotions that would work and the ones that may not for the product in question

3. I really dont think that this approach would work for products which are in the market for a long time / for which price discounts are available on other sites.

4. The duration of the reverse auction is extremely important. If its too short or too long the right price discovery might not happen. I would suggest that Jellyfish would be better off providing this as a B2B service to companies for test marketing at product launch or study effects of promotions which are planned rather than as a service to the end consumer.

Links : : TechCrunch

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