Reverse Auction

A reverse auction is a type of auction in which the roles of buyers and sellers are reversed. Sounds complicated? In general terms its very simply to understand and operate.

As the website owner you list an item for reverse auction, your customers purchase credits in order to bid. The winner is the customer who placed the lowest unique bid.

For example,

You list Transformers - Revenge Of The Fallen DVD. The auction runs for 10 days.

Customer A places a bid at 5p
Customer A places a bid at 6p
Customer A places a bid at 8p
Customer A places a bid at 9p
Customer B places a bid at 6p
Customer C places a bid at 5p
Customer D places a bid at 8p
Customer E places a bid at 8p
Customer F places a bid at £1
Etc

After 10 days, based on the example above customer B is the winner. As their bid is the lowest unique amount.

Customer B then pays 6p (plus postage if you want to charge that) to receive the DVD. Obviously for Customer B that is a bargain and they walk away very happy indeed.

Each customer purchases credits in order to place a bid.

That is a very simply example to show you how it works. Your auction site will attract more bids and many more customers after you have marketed it.

How it works for the website owner

Each customer needs to buy credits in order to bid, for this example we will say each credit is £1.

Customer A purchased 10 credits for £10
Customer B purchased 10 credits for £10
Customer C purchased 10 credits for £10
Customer D purchased 10 credits for £10
Customer E purchased 10 credits for £10
Customer F purchased 10 credits for £10

The DVD costs £10 from an online retailer

Each time a customer bids, £1 is deducted from their online account. Generally each customer will probably bid more than once in order to get a better chance of winning.

How much can I make

Example 1
DVD cost: £10 (includes free delivery from online retailer such as Play.com)
Customers bid: 20 bids at £1 each: £20
Lowest unique bid at the auction finish: 34p
Your profit from auction: £10.34

Example 2
TV cost: £150
Customers bid: 200 bids at £1 each: £200
Lowest unique bid at the auction finish: £15.56
Your profit from auction: £115.56

Example 3
Ford KA Car cost: £8000
Customers bid: 10000 bids at £1 each: £10000
Lowest unique bid at the auction finish: £845.44
Your profit from auction: £2845.44

These are only examples and not intended on giving an accurate or even guaranteed idea of profit. But they do show what might be possible with the correct marketing.

We would suggest starting with lower value items such as DVDs, Video games etc.

You can normally purchase the DVD and dispatch directly to your auction winner, reducing the need to hold and handle the stock. This way you only spend when you have the money from your customers.



A reverse auction is a type of auction in which the roles of buyers and sellers are reversed. Sounds complicated? In general terms its very simply to understand and operate.

As the website owner you list an item for reverse auction, your customers purchase credits in order to bid. The winner is the customer who placed the lowest unique bid.

For example,

You list Transformers - Revenge Of The Fallen DVD. The auction runs for 10 days.

Customer A places a bid at 5p
Customer A places a bid at 6p
Customer A places a bid at 8p
Customer A places a bid at 9p
Customer B places a bid at 6p
Customer C places a bid at 5p
Customer D places a bid at 8p
Customer E places a bid at 8p
Customer F places a bid at £1
Etc

After 10 days, based on the example above customer B is the winner. As their bid is the lowest unique amount.

Customer B then pays 6p (plus postage if you want to charge that) to receive the DVD. Obviously for Customer B that is a bargain and they walk away very happy indeed.

Each customer purchases credits in order to place a bid.

That is a very simply example to show you how it works. Your auction site will attract more bids and many more customers after you have marketed it.

How it works for the website owner

Each customer needs to buy credits in order to bid, for this example we will say each credit is £1.

Customer A purchased 10 credits for £10
Customer B purchased 10 credits for £10
Customer C purchased 10 credits for £10
Customer D purchased 10 credits for £10
Customer E purchased 10 credits for £10
Customer F purchased 10 credits for £10

The DVD costs £10 from an online retailer

Each time a customer bids, £1 is deducted from their online account. Generally each customer will probably bid more than once in order to get a better chance of winning.



Example 1
DVD cost: £10 (includes free delivery from online retailer such as Play.com)
Customers bid: 20 bids at £1 each: £20
Lowest unique bid at the auction finish: 34p
Your profit from auction: £10.34

Example 2
TV cost: £150
Customers bid: 200 bids at £1 each: £200
Lowest unique bid at the auction finish: £15.56
Your profit from auction: £115.56

Example 3
Ford KA Car cost: £8000
Customers bid: 10000 bids at £1 each: £10000
Lowest unique bid at the auction finish: £845.44
Your profit from auction: £2845.44

These are only examples and not intended on giving an accurate or even guaranteed idea of profit. But they do show what might be possible with the correct marketing.

We would suggest starting with lower value items such as DVDs, Video games etc.

You can normally purchase the DVD and dispatch directly to your auction winner, reducing the need to hold and handle the stock. This way you only spend when you have the money from your customers.



View a demo of the website