Wednesday, May 4, 2011

Why seat auctions do not generate an interest?

From time to time our customers inquire from us to deliver seat auction software to them. And then we are using many efforts to persuade them not to order this. After the last conversation we decided to bring our arguments here.

For those who do not know what is seat auction: customers pay fixed entrance fee; when the needed number of participants have paid this “seat” fee, penny auction starts and bidding is free of charge for them.

One of the main reasons is the length of time it takes an auction to get started. So, customers should wait unpredictable period of time till auction starts.

Another important factor seat auctions don't give any success is because there is no instant gratification. Many people start bidding in penny auctions because of the fast action. Within a few minutes (or maximum hours) they will either have won or lost. If a bidder knows he is going to have to wait hours/days (or even weeks) to participate in a seat auction, he is surely losing his interest.

The whole reason why many bidders participate in penny auctions is to relax after a long day of work. And even the fact, that seat auction format does not contain the risk of the customers' losing much money, it does not give much interest.

The more experienced bidders who use auctions to make a profit view seat auctions as a bad investment. As the probabilities of them winning are basically equal with everybody else, the chances for a profit decrease remarkably.

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