Oztion’s new Best Offer cuts BIN ASPs 25%
By Garry HJ | July 19th, 2009 | Category: OZtion | No Comments »
Australian auction venue Oztion introduced a Best Offer feature this week and within 24 hours saw a 25% cut in the Average Selling Price (ASP) of Buy Now items sold after accepting offers made by buyers.
Reactions from sellers caused another announcement to be made the following day stating that a Minimum Offer threshhold tool had been added, which auto-inserted a floor offer of 40% of the Buy Now price advertised.
It would seem that Aussies are fond of making the same stupidly low bids that plague other venues and regions offering such tools to vendors.
The use of a Best Offer tool is contentious amongst auction sellers worldwide – they argue that it is unneccesary and leads to friction. The purpose of online auction selling is to list at the lowest price you’ll accept, with good images and descriptions leading potential buyers into a bidding war that elevates prices to profitable levels. If the price rises above what a buyer is willing to pay, then they should stop bidding.
Fixed price vendors on the other hand are proponents of having a mechanism to clear obsolete and surplus inventory that does not entail creating new or revised listings with discounted prices. Currently, eBay leads the market with such tools ranging from eBay Stores Markdown Manager to Fixed Price Best Offer.
It’s interesting that the introduction of such a tool on the site for Australian sellers only, should reveal such an immediate price reaction. Until recently, Australia was one of the world’s strongest economies, benefiting from huge resources exports to China, which is also now suffering rapid economic shrinkage.
Do you use “best offer” or “markdown” tools? What is your experience of them – where are the most affluent and the most cost sensitive buyers (geographic region or product category)?
Gaz
