Adam Canady's blog

A Carleton College senior.

Reverse eBay

I recently saw this idea on r/CrazyIdeas:

A reverse-ebay: Buyers post something they are interested in buying, and vendors compete to offer the lowest bid. Internet shopping would suddenly get so much easier--instead of searching different websites and online markets for the lowest price on an item, you could make a single post and have the lowest price come to you. Additionally, it could be easier to find obscure items. No doubt it could be linked to ebay, amazon, etc. to connect potential buyers and sellers.

An interesting idea, so I thought about how it could be implemented.

Essentially, this is almost like creating a service that would organize group buys. Here are some quick thoughts:

  • The service would need to demonstrate a significant level of demand. Otherwise, it's tough for suppliers to offer the same type of discount since they're only incentivised by one sale.
  • Suppliers may want different prices and quantities depending on how large the auction became. Some may be able to supply a lot more than others who would supply less but would bid lower. In this case suppliers must be able to bid their maximum quantity offered and their minimum price.
  • Auctions would have to be limited by time. Perhaps there would be a period of time where buyers could sign up, then a period of time where suppliers could sign up
  • Suppliers would have to be confident demanders would pay up. If 500 people signed up to buy garden tools, you better be sure a high percentage of them will actually buy. Perhaps they would have to put their money down ahead of time at some predetermined market value, then they get the difference back between the market value and their 'wholesale' final price. If they decide to jump ship, there could be a flat 5% fee they'd get tagged with.
  • Distribution would be difficult. The supplier would have to ship to, say, 500 different people, which would be a hassle. If the site hosting these transactions got big enough, it's reasonable that they could act as a distribution center. The auction-winning, lowest-bidding supplier could send their goods to one location, and the distribution center could ensure it's sent out to demanders.
  • This service may be an inefficient intermediate step towards something more continuous. Demand is not guaranteed and comes in big chunks, which represents an inefficiency as some suppliers might like to ship continuously. Some suppliers would probably like to say that they can supply 500 units/week and have that order fulfilled week over week.