Auction website development

In countries where the problems of ensuring transparency, facilitating communications, and automating trade processes are relevant, online auctions have great potential. For example, in Armenia, such platforms operating on the basis of the classic business model are necessary for banks, credit institutions, importers, exchanges, etc. In addition to the classic, there are also Dutch and Scandinavian auctions in the world, dozens of types of gaming platforms that include gambling components in the trading process. Let us briefly describe the types of online auctions.

• The classic or English type is the most common and standard auction. The business model is based on the method of increasing the initial cost using bids. This method is mainly used to sell exclusive goods, according to the principle of receiving the highest price offer. The price rises step by step, the calculation of the size of each bid is made as a percentage of the initial cost. The buyer is the participant who makes the last bid during the announced period of time. As an organizer of trade, both offline and online auctions receive income from the placement of lots and have a percentage of sales.
• The principle of the Dutch auction is based on lowering the starting price until the first buyer appears. This model is mainly used in wholesale trades, especially in cases of perishable goods. For example, this type of trade got its name from the method of selling Dutch flowers. Large batches of flowers for wholesale were received at the port, starting prices were announced, which were gradually reduced to ensure the fastest possible sale before the loss of marketable appearance. The same model in Armenia can be used for the sale of agricultural products and even for the sale of other lots.
• Scandinavian auction, the name of which has nothing to do with the Scandinavian countries, despite the fact that in Europe and the USA it is recognized as a type of auction, causes mistrust in many. The reason is the use of this type in illegal trading schemes. What is special about this model?

The site puts up for sale a precious item with an unnaturally low starting price. For example, the latest iPhone model with a conditional price of 10 thousand drams. With the help of advertising, potential buyers are attracted, who must have a certain amount on their balance to participate in the auction. This is necessary to pay for each bid to increase the price of the lot. Yes, here in each subsequent step, in order to offer a higher purchase price, the participant must pay. Conventionally, each step increases the cost of the lot by 10 units, but for each subsequent offer, one of the participants pays 20 units. The winner is the author of the last bid.

Let's assume the market price of the lot is 500000, the participation fee is 3000. When recruiting 100 participants, the organizer already has 300000. Let's assume that this budget covers the costs of advertising, marketing and office. The organizer also has 20 units for each subsequent offer starting from the starting price of the auction.

That is, even if the product is sold for 250000, it turns out that on the way to increase from 10000 to 250000, the participants made 24000 steps, for which the organizer received 480000 drams from the balances.
Let's summarize the example of one lot. The participation fee budget covers the current expenses of the auction. The fees for bids amounted to 480 thousand, plus 250 thousand for the sale price of the lot. If you subtract the market value of the goods, you get 230000 net profit from one lot. One average participant in this "game" loses 7800, the winning participant advertises the site everywhere.

• Game auctions are varieties of the above, with a decrease in price, with an increase, time limit, the addition of game functions and other interesting tools.

If you have already defined the model of your future business, contact Astudio to get the necessary consultation on creating an Internet business or startup. We will tell you about the disadvantages and advantages of trading portals, advise on tools for attracting and retaining visitors, warn you about the risks and opportunities.

Stages of creating an Internet auction:

1. We make a reasonable price offer;
2. We discuss the functionality and determine the final budget;
3. We draw up a technical task and an agreement;
4. We create and agree on a web design;
5. We program a site from scratch;
6. We test and activate the project;
7. We provide technical guarantees.