Reverse Auctions for Automobile Buying: CarWoo Takes the Cheap Suit Out Of Car Sales

Here is a fascinating article from Wired with the latest "Gee, why didn't I think of that" business idea. It comes from a start-up called CarWoo (http://carwoo.com/), based in Burlingame, CA. They have a novel approach applying reverse auctions to one of life's most anticipated and yet dreaded transactions - buying a car. Here's the Wired article:

CarWoo Takes the Cheap Suit Out Of Car Sales | Autopia | Wired.com

and watch the well-done YouTube demo/promo below:

So, what do you think of the concept? Have you tried it? Send us your thoughts/feedback here to the The Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/)

David

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Defining the Concept: The Chartered Institute of Purchasing & Supply Offers Its Definition of What a Reverse Auction Is

Well, here is the definition of what constitutes a reverse auction from The Chartered Institute of Purchasing & Supply. CIPS defines it in the following manner:

Reverse auctions

The opposite of the usual kind of auction in which potential buyers  compete to bid the price up. In a reverse auction, which has come into  its own with the Internet, suppliers bid the price down.

David

From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/

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Union Uses "Reverse Auction" as Fighting Words

Image by Getty Images via @daylife

Hey, here at the RARC, we're following the latest news and trends in all uses of reverse auctions (and the terminology of it as well). Well, here's a new one out of Wales. The union for auto workers at TRW Automotive is using "reverse auctioning" in an accusatory (and pejorative) way - alleging that management is having its plants engage in a "reverse auction" on lowering costs to determine which one(s) to close. You can read the details here below:

BBC News - Union talks on Resolven car plant closure

From the article:

"Derek Vaughan, Labour MEP for Wales, and a former leader of Neath Port Talbot council, said he was shocked by management "tactics" at TRW.

He accused TRW of holding a "reverse auction" among its plants in Europe to find out which staff would take the biggest cuts."

Now, not saying we haven't seen this kind of action done before - but a unique twist to use the "reverse auction" label in such a way.

David

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Beware the $31.47 iPad

Now, as head of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), I've been picking-up the fact that there is a whole a lot of confusion out there as to what is - and is not - a "reverse auction." Philip Elmer-DeWitt, writing for Fortune, attacked the matter head-on in his article, "Beware the $31.47 iPad," which you can read below:

Beware the $31.47 iPad - Apple 2.0 - Fortune Tech

DeWitt echoes what I've been seeing out there on the Interweb - that there are many firms out there - like Dubli (and yes, mentioning them here will drive up my traffic and comment counts!) and other "auction" sites (call them "penny auctions" or "pay-per-bid" sites) that are not reverse auctions at all. I'll withhold my judgment on their legitimacy, but suffice it to say, as DeWitt put it: "If it looks too good to be true, that's because it is!"

David
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Why Auctions Work?: Insights - and "Game, Set, Match-level Evidence" - from a Market Leader

Image via Wikipedia

Here's a fantastic three-part article, written by Beverly Dunn of Ariba. It is part of their "Knowledge Nugget" series, but this is not a McNugget by any means - it's prime stuff! Whether you are in procurement for your organization or government agency or you are on the supplier side of the fence, this three-part series is a must-read (and a must share). Grab a cup of coffee and read all three parts by clicking on the links below:




Part 1: http://exchange.ariba.com/community/solutions/sourcing/blog/2010/09/13/ariba-knowledge-nuggets-ariba-sourcing-why-auctions-work-1-of-3

Part 2: http://exchange.ariba.com/community/solutions/sourcing/blog/2010/09/13/ariba-knowledge-nuggets-ariba-sourcing--why-auctions-work-2-of-3

Part 3: http://exchange.ariba.com/community/solutions/sourcing/blog/2010/09/13/ariba-knowledge-nuggets-ariba-sourcing--why-auctions-work-3-of-3

Great information from Beverly, based on Ariba's decade of experience and data. Hey, you can't argue with the proof she offered from an analysis of ten years worth of reverse auction experience:

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The Savings Proof is in the Pudding

Auctions drive incremental savings of five to seven percent on average versus RFP alone 10 years of Ariba data shows that:

• Our customers historically average 17 percent savings using eSourcing practices that include auctions
• Auctions drive incremental savings of three to four percent from incumbent suppliers over RFP
• Reductions in the cost of products/ services go straight to bottom line
• Has a significant impact on organizational health
• Reduced cycle times for resourcing activities (up to 90%)

*Data based on all Ariba-managed sourcing projects run on Ariba software

"Game, Set, Match" for reverse auctions? Why not get moving on this today to produce significant savings in the procurement area for your company, your agency, your hospital - any organization? Contact us here at the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/ to get started.

David

From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/
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Reverse Auctions Produce Significant Savings for the Federal Government on Energy Procurements

Want to save money on energy contracts and increase transparency in the process? This is the promise of reverse auctions in energy procurement - a topic we've been following closely here at The Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/). Our friend, Chris Dorobek has conducted an interesting interview on the subject with Richard Domaleski, who is the CEO of World Energy. You can listen to the full interview at the link below:

Federal News Radio 1500 AM: Reverse auctions help agencies with transparency

Very interesting times in the energy field, as the interests of governments - at all levels - to save money is spurring intense interest in procuring the ultimate commodity (electricity) through reverse auctions to produce significant budgetary savings.

David

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Reverse Auctions About to be Employed for Allocating Universal Broadband Service?

We may be just about to see one of the biggest - and most high profile - implementations of reverse auctions in the public sector. As was recently reported by the online publication, The Connected Planet (http://connectedplanetonline.com/), all signs point to the fact that the FCC (Federal Communications Commission) will employ reverse auctions to help allocate universal broadband access by having potential service suppliers bid down the price - providing the most coverage for the least amount of expenditure by the federal government. Image via Wikipedia
You can read the complete analysis on the matter in the article, "The reverse auction conundrum," written by Joan Engebretson at:
The reverse auction conundrum

Interesting times.....we'll keep you abreast of developments here at the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/).

David
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