Phil Bird's Vision: Revolutionising Price Discovery through Auction Technology

Main image - Revolutionising Price Discovery through Auction and Trading Tech

In this article, Phil Bird, Executive Director of NovaFori, discusses the role of auction platforms in driving price discovery and overcoming market saturation challenges. As the Executive Director of the company, Phil has been intimately involved in the development and growth of auction and B2B platforms. Through years of experience and observation, he has seen how these platforms have transformed market landscapes, revolutionising how businesses operate and interact. From their beginnings to their current prominence, Phil has witnessed auction platforms' evolution and profound influence on industries worldwide. Learnings from marketplaces which have faltered or struggled to gain traction have provide a balanced view, allowing for an understanding of what needs to happen as an auction platform changes based on market trends, new supply or loosing bidders.

Embracing Innovation in Price Discovery

Traditional pricing methods often struggle to capture the true value of goods and services. Auction technology is a game-changer that revolutionises price discovery through transparency, efficiency, and market-driven dynamics.

"Pricing is an evolving picture, setting a fixed price ignores trends, varying input costs, market sentiment and other contributing factors. Unless the good or service is highly commoditised with lots of price reference points, not taking a dynamic approach will result in lost margin and potentially reduced trade."

Leveraging Real-Time Bidding Dynamics

"At NovaFori, we empower buyers and sellers with real-time bidding dynamics. Imagine a scenario in the commodities market, where coffee producers and buyers engage in dynamic auctions to determine prices based on factors like quality, quantity, and market demand. This real-time pricing mechanism ensures fair value for both parties and fosters transparency and efficiency in the market."

Price discovery creates an encompassing view of the all the market dynamics, but also includes and allows for highly diverse product attributes. For example, imagine the coffee commodities market, where producers and buyers have to determine the price based on quality, quantity, and certainty of forward supply.

With all these attributes creating a transparent market which delivers a fair and equitable way of buying and selling is important.

Typically B2B marketplaces are “ongoing transactions”, using our example of coffee buyer, this might be a supermarket chain looking to fill its selves with coffee beans. They will need to consistently purchase coffee beans as products are sold in stores. With this in mind, a buyer will want to purchase on a monthly or annual basis and will look for transparency and fairness, otherwise they will not wish to continue purchasing. Typically this is where brokers provide a level of service, creating consistency, however with a real time dynamic pricing marketplace, buyers can get closer to the market without introducing price risk.

Driving Market Efficiency Amid Saturation

"In saturated markets, differentiation is key, and auction technology offers a pathway to efficiency. Consider the carbon credit trading sector, where auction platforms facilitate real-time exchanges, driving transparency and efficiency in environmental markets. By allowing participants to bid on carbon credits based on factors like emission reduction projects' quality and environmental impact, auction technology ensures a fair and efficient allocation of carbon allowances, contributing to global efforts to combat climate change."

Carbon Credits in particular is a supply lead market, there is more demand than supply. More importantly the source of carbon credits is very diverse and has more or less positive impact directly on the environment.

Using our dynamic pricing solution enables the marketplace operator to help buyers and sellers understand and discover products. Pricing is a function of understanding the contributing factors of a product, there is no easy way to determine this without using auction technology to understand how a product or service is valued at any given moment in time.

NovaFori banner to CIX Case study - Platform for carbon offsetting projects
NovaFori x CIX (Climate Impact X)

A Vision for the Future

"As we look ahead, auction technology will continue to redefine the boundaries of price discovery. Through advancements in data analytics and machine learning technology, businesses will gain deeper insights into market dynamics, empowering them to make more informed pricing decisions and drive sustainable growth."

Data is an output of the process of price discovery and is quantitative. By understanding many price discovered transactions it is possible to determine what factors of a product or service most contribute to price outcomes. In other words, transactions over time using this approach provide context about the market. This context can be translated through data products to provide intelligency to enable buyers and sellers to better plan and understand the purchasing or selling journey to make better use of their inventory or service.

Ultimately balancing supply and demand more closely reduces friction and waste, enabling profit and margin to be enjoyed by both buyers and sellers by leveraging this smart transaction technology.

NovaFori's Commitment to Innovation

"At NovaFori, innovation is our cornerstone. We are dedicated to pushing the boundaries of auction technology, empowering businesses to thrive in a rapidly evolving marketplace."

The transformative potential of auction technology in revolutionising price discovery and driving market efficiency is immense. As businesses embrace innovation and adapt to changing market dynamics, auction platforms will continue to play a pivotal role in shaping the future of pricing strategies and fostering sustainable growth.

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