This blog was contributed by our partner Tophatter.
As more and more shopping moves online—Internet Retailer recently reported ecommerce sales grew by 15% in 2018—it becomes a more personalized, targeted experience. A hyper-personalized experience escorts the shopper through to purchase, but it can also suck the fun out of shopping. And Americans love to shop. Think of how many 80’s have montages of shopping at the mall; it’s ingrained in us! So the rise of personalization drives a huge market opportunity: fun shopping experiences.
Keeping customers engaged is key. Auction shopping marries the mechanics of a game with shopping. Similar to apps like Candy Crush, the most downloaded game ever on iOS, auctions are entertainment without a steep learning curve. As malls close and the time the average person spends on their phone rises, there is more consumer demand than ever for fun, online shopping experiences.
Auctions also motivate deal-focused shoppers to compete against one another to win an item. These shoppers looking for a bargain are serious. Tophatter’s 2018 Gifting Survey found that 18.8% of women and 9.7% of men would choose a bargain over intimate moments with their partner. For sellers, the margins are smaller on bargain purchases but there is huge volume to be had.
How to Win at Auction Selling
Apprehension around selling in auctions usually comes from two places:
- volume can be hard to predict and
- the final sale price is not fixed.
But in those variables lie a lot of opportunity. Let’s break them down.
Managing Unpredictable Volume
In fixed-price marketplaces, sellers spend countless hours and resources to optimize their listings for improved search rankings. They also spend money on ads to ensure their products are seen. But auctions can move volume fast without ads or search optimization. This is because people look at this type of shopping as something of a game. On auction marketplace, Tophatter, the average person spends 8-10 minutes in the app at a time. And you can control branding and marketing more easily once a customer has ordered. Their experience is not tailored around a frictionless path to purchase, but rather to spend time competing products up for sale and setting reminders for products they are interested in.
Brick and mortar retailers who optimized for slow shopping are still growing as their competitors fumble, and auction formats bring those same principles to the online experience. These are shoppers looking shop as a pastime, which drives more competition and purchases. The right product in a fast-paced auction format can sell hundreds and even thousands of times a day. These “winning products” that are successful in auctions offer a wealth of data about the products that are trending and where to invest in new inventory.
How Do I Ensure Margins Without Fixed Prices?
This is the biggest barrier for most sellers who are exploring auction marketplaces. Marketplaces have built a number of checks and balances to protect sellers. From reserve prices to starting bid tools to shipping price control, Sellers can optimize for their target selling price before a product goes up for auction. Meanwhile, the marketplace balances the supply and demand in real-time. This ensures the right amount of competition to the number of products at auction.
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Every product will not work in the rapid auction format, but marketplaces enable sellers with testing ground to try products with low investment and risk. Wholesale and overstock goods are ideal for the auction format, no matter the category.
Auctions put the fun back in shopping. This makes deal-focused shoppers more motivated to buy. Enabled with the right tools, sellers can move volume fast in auctions and learn quickly about shopper demand. This is high reward selling, so time to see the sales you are missing in auction marketplaces.