Scoring Auction
Understanding Scoring Auction within a marketplace
In a scoring auction within a marketplace, participant bids are evaluated based on specific criteria, such as price, quality, and delivery terms. Each criterion is assigned a predetermined weight, and bidders are ranked according to their total scores, allowing for a more comprehensive assessment beyond the bid amount to determine the winning bid.
The process:
Trade set up
The lister or auction organiser lists the product or service they are looking to sell or procure on the online platform. They define the attributes on which bidders will be scored.
Bidder evaluation
The lister then weights the attributes according to preference or their relative importance (e.g. price may be twice as important as delivery time, or quality may be four times more important than quantity).
Scoring bidding process
Participants place bids by submitting a numerical response for each attribute, which is then multiplied by the corresponding weighting to arrive at a score for each attribute.
Score calculation
The platform combines the scores to calculate an overall score for each bidder and ranks the bids from highest to lowest. The ranking may be revealed to bidders at this point. The process may then be repeated over multiple rounds, with bidders looking to increase their rank by improving their offer each time.
Transaction completion & winner notification
At the end of the auction, the bidder with the highest score wins. The winning bidder is notified, completes the payment, and finalises the transaction, leading to item delivery or fulfilment according to the agreed terms.
Why you might choose a Scoring Auction for your marketplace?
A Scoring Auction is advantageous for a marketplace when the valuation of items involves multiple attributes, allowing bidders to express nuanced preferences and considerations beyond monetary value.
Invite unlimited participants
Nuanced preference expression for multiple attributes
Score in real-time or asynchronously with multiple parties
Efficient, digital process
Clients where we have applied a Scoring Auction
Maritime and supply chain management marketplace to match supply and demand electronically.
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