What Is A Reverse Auction?
A Look At The DubLi Zero Auction.

One of the first challenges in operating a Reverse Auction is getting enough consumers to participate in the auction. A company must be prepared to loose a good deal of money in the early stages of setting up a reverse auction. In the first several months of setting up the Dubli Auctions in North America, Michael Hansen, the founder of Dubli lost millions of dollars because there were not enough consumers participating in the auctions.

Lets take a look at the Dubli Zero Auction and exaimine how it works as well as how the “word of mouth” or in this case, Viral Marketing builds out the customer base.

First of all, anyone can participate in a DubLi Reverse Auction, but in order to participate in the auction, the consumer must have a bank of DubLi Credits, with each credit costing 80cents. Once the consumer has established their free account on the Dubli Network, then they will click on the Zero Auction tab at the top of the page. Once the Zero Auction is loaded they can either click on “Show All” or they can click on one of the 6 product categories. The 6 categories are as follows:
  • Travel and Vouchers
  • Toys & Games
  • Top Auction
  • Electronics
  • For Her
  • Household and Leisure
If for example the consumer is interested in electronics they simply click on “Electronics” and all the electronic items that are available in the zero auction will be loaded on the page. At the time of this article the following items were listed in the zero auction.
  • HP iPAQ914c Business Messenger --- Start price: $349.99
  • Epson Multimedia Projector 2200 Lumens --- Start price: $549.99
  • Dyson DC28 Animal --- Start price: $599.00
  • WD portable Hard Drive 500 GB --- Start price: $106.95
  • iPod nano- chromatic 16 GB purple --- Start price: $138.50
  • Casio Exilim EX- FC100 Digital Camera --- Start price: $239.95
  • Elgato EyeTV Hybrid ---Start price: $128.00
You will notice the start price for each item is listed on the right. What Dubli does, which is unique to Dubli, is they guarantee you that the start price listed is absolutely the best price you can find anywhere online of all the major retailers. This is a very significant feature because as the consumer realizes they will always find the best prices for products that fall into these categories, they will always check the Dubli Reverse Auctions first before going anywhere else.

Let’s assume that the consumer is interested in the iPod nano listed above. They simply click on the image of the iPod and it will bring it to the top of the page with a full product description below it, so the consumer can see for sure this is the iPod they wish to bid on.

The next thing the consumer will notice is the start price is $138.50. Below the start price it says “Your Current Price Is”; and it will be grayed out. In order to see the current price the consumer will have to click on the green button that says “Show Price”. When they click “Show Price” it will cost them one dubli credit, or 80cents, and the current price will be shown.

Every time someone clicks on show price, the price drops by 25cents. That 25cent drop comes from the 80cent dubli credit. The remaining 55cents goes into the commission structure which is either paid out to the non-profits or the dubli associates that are helping Dubli establish the initial customer base.

At the time of the writing of this article I clicked on show price and it was at $98.00. That means I spent 80cents to save $48.50. Now at this point you might be asking why I didn’t buy the nano right then. I already knew that the start price of $138.50 was the best price I could find anywhere online – Dubli even guaranteed me it was the best price I could find online, so why would I not grab it at $98.00.

The reason is very simple. I CAN’T BUY IT. In the Dubli Zero Auction, you have to be the last consumer to check the price and take it from the final 25cents to zero (thus the name of the auction) and if you are the one that takes down to zero, then you get it for nothing. That’s right, you get to buy that brand new, brand name, fully warranted $138.50 iPod nano for absolutely nothing. The only expenditure you have is the cost to the credits you spend to take it to zero and of course the shipping cost.

If you want to check out the auction yourself, you can go click on the Free Credits near the top righ of this page and will be happy to send you a few free credits.