The algorithm of the electronic auction on winbix.com.
“I am a co-founder, CTO and project manager, who is responsible for the development of MVP Winbix. I am actively engaged in projecting, formalizing requirements, working with a team of programmers, testing and monitoring of project development”.
In this article, I want to write about the most important function of our electronic platform, on which we have been working for the last six months.
As you already know from our video, the price of each product which is posted on our website is constantly reducing. The seller sets two prices while posting the goods on the site: the starting price and the minimal price for which he is ready to sell the goods. Using this data, the marketplace launches an auction in which the price starts to decrease for each item from the upper value to the lower value.
When the user watches the goods on the site, he does not know its minimal price (this is the seller’s secret). What does the buyer see?
For each auction, the buyer has access to the information about the starting price (the one that was at the start of the auction) and the current price (which was formed then), the amount of savings and the timer, which shows when the next price reduction will occur.
The user can make one of two decisions at any time: stop the auction by clicking on the “buy now” button (this means that he is obliged to buy the specified item at the current price), or wait for the next price reduction and maybe get the item for a lower price. The buyer does not know at what exact value the price of the product will reduce next time. The price step is determined by a special secret algorithm and it is random. Also, any other user can buy this product at the current price at any time, in this case, the lot will be completed and the system will form a new lot for this product, and the price reduction will start from the initial value.
What happens if no one buys the lot at the lowest price?
This lot will be closed after a certain period of time. The system will form a new lot and start all over again.
What happens if the user stops the auction but does not buy the product?
It is the same as if a person makes a bid at an auction, but he does not have the money to pay for the goods. In this case, the system imposes certain sanctions on this user, for example, it temporarily blocks the possibility of his participation in other auctions.
Lots and goods — what’s the difference?
In our system, the lots are presented as ordinary goods: you can search for it, filter by various parameters, view product cards and its characteristics (just like on a regular marketplace). But nevertheless, lots are lots. You need to understand that the system can have several lots for each product and each lot has its own history. If the lot was sold (with appropriate good), the system will launch a new auction for the same product (if it is available in the warehouse) and this will be a new deal.
At the same time, we have developed functionality for online changing prices in the product catalogue without reloading the page. For each lot, there is a history of its changes.
In the future, we will be able to determine which price reduction strategy is optimal, based on the data on the purchased lots.
What are the advantages of such a system of the price reduction?
- The consumer buys the goods for the price that is appropriate for him;
- As a result, buyers influence pricing;
- The seller sells his goods, which would be in stock;
- Seller receives statistics on sales at the appropriate price;
What we are working on now:
We are improving the lots working system. The mechanism is already working, and we are testing it in different conditions and with different input data in order to achieve maximum efficiency.