Use cases and examples where private electronic Markets can bring benefits.

Scenario: Your company makes products and sells them to retail customers on a website.

Problem: You have to accurately set prices to drive sales, but you are subject to supply and demand changes and unpredictable market 'head-winds'. Competition is fierce and pricing strategy is critical.

Example: Your company makes sporting goods, for example sneakers or trainers.

Solution: You create an electronic Market for each sneaker type, possibly down to the exact colour combination. On your website, next to the "Buy Now" button, you add a "Make an Offer" button. This button allows the customer to put in a price that they would like to buy your sneakers at. An employee of your company puts Sell Orders into the Market to take the best offers. Your website polls for Fills, and when it finds a new execution, it could react to either move the product into the customer's basket at the agreed price, or email the customer to agree the price with a link to continue the transaction at the agreed price.

Your company could choose to show all of the current Price data for each sneaker, show only part of it, or keep it entirely private. Orders are all routed through your company's single HaggleDigital login, and each Order holds your local customer reference in the "OnBehalfOf" field.

Outcome:

• A prospective customer that would have left your site is now engaged, and possibly converted to a sale.
• The price agreed is private to your company and the customer, your competitors have no visibility.
• The customer gets a price that they think is great, so they have a good chance of voluntarily promoting your company via social media.
• Supply side over or understock is dynamically managed so you sell exactly as much as you need to, when you need to.
• Black swan events can hit without warning - a politician is suddenly seen wearing your sneakers, social media decides it is cringe, and demand moves overnight. Selling prices in the Market can react immediately.
• Your normal business flow is uninterrupted, and customers that do not want to negotiate take the standard retail price if they wish.
• The interaction with the customer is exactly as before, the delivery and charging are the same, only the price is specific to each customer.

Scenario: Your company makes ground-breaking technology and adoption is unpredictable.

Problem: You have to sink capital into development ahead of release. To you, the product is a great idea, but consumers are unpredictable and might react with enthusiasm, a shrug or anything in between. Competitors might be working on similar ideas, or rapidly copy your product and undercut you.

Example: Your company produces glasses with an inbuilt camera and augmented reality display.

Solution: You run a marketing campaign ahead of release as you would do normally, stressing that initial supply will be limited. You set an indicative price but let people know that they can place an Order with a price ahead of release. You create an electronic Market for the glasses. Consumers place Buy Orders, but your company does not place Sell Orders, and a buy-side order book builds up. You make a call on how much of the real Market to show to consumers. If you show the current Market, customers can see the demand and make an informed choice about the price they need to offer. At launch, you know you have 10,000 units ready to go (or however many you have). You can place Sell Orders against the buy order book at the rate that suits you, and at the price you find acceptable. The price you sell at is justified by the tangible demand.

Outcome:

• A potentially chaotic and unpredictable release becomes manageable and controlled.
• Previously unquantifiable pre-release demand becomes visible.
• Supply comes under control when demand is known.
• Prices become justifiable, and recouping of investment costs becomes predictable.

Scenario: Your company operates flights or courier services, and needs operational efficiency to maximise profitability.

Problem: Travel or delivery provision must be optimised, or your company loses money shipping empty space. Demand is sporadic and unpredictable, and seasonally variable.

Example: Your company operates passenger flights and freight flights.

Solution: Each flight, defined by route and departure time, has a Market created to represent it. Customers who wish to travel on flights can place Buy Orders into the Market. Your company publishes the Price data so that customers know the price they need to beat to get that flight. At a time convenient to you, you can place Sell Orders into each Market and issue tickets, raising or lowering the price to ensure that each available seat is filled.

Outcome:

• Every flight or truck delivery becomes as full as possible, maximising efficiency.
• Periods of high demand are managed by dynamic price increases.
• Low demand periods allow you to offer discounted services to courier goods or passengers prepared to wait.
• Prices agreed with customers remain private to you and your customers.

Scenario: Your company promotes ticketed one-off events.

Problem: Demand for tickets is nebulous before an event, and subject to instability. Every unsold ticket represents a loss.

Example: You are an independent promoter and have an arrangement with the venue to hit expected capacities. You book bands for gigs, but you do not know if each band might be the next big thing, or... not.

Solution: A Market is created for each gig. The Market has an automatic expiry time before the event. How far in advance is up to you; it could be just before the doors open. You promote each gig and allow people to place Buy Orders for tickets through your website. At a rate that suits you, you sell tickets to the best Buy Orders, varying your price to ensure you hit a minimum capacity well before the gig starts. You sell the remaining tickets either at a high price to fill the venue, or drop the price to fill up an undersold night.

Outcome:

• Every gig is filled to a reasonable level and the bar business is regularised, which the venue loves.
• Popular bands get the most money for their performance.
• Unknown and unfollowed bands still attract gig-goers with low ticket prices.
• Demand for tickets becomes visible well before tickets are actually sold, allowing you to react to variable demand.

Scenario: Your company buys fashion, b-stock and end-of-line goods at a good price from manufacturers and sells to retail customers.

Problem: Holding stock in warehouses or stores costs money. Out of fashion goods cannot be sold at a profit. Seasonal variation forces you to move items like Winter coats out before the season ends, to make room for Summer t-shirts and shorts.

Example: You run a website that operates along the lines of TK-Maxx, buying up clothing direct from manufacturers and selling to retail customers at a discount.

Solution: Each item of clothing has a Market, possibly even down to the size and/or colour. Customers are presented with a fixed price option and a "Make an Offer" button. When stock for an item fails to sell on the fixed price, you can begin to take best offers and ensure that trade continues.

Outcome:

• Stock moves through at a controlled pace, regularised by the instant control of dynamic pricing.
• Demand for each item becomes visible and you can set prices to ensure that you sell all stock by a particular time.
• You know that warehouse space will be clear for incoming new-season goods.
• The guesswork of setting a price for each line item is removed, and the Market reveals the price customers are actually willing to pay.

Scenario: Your company runs a real-world online game, and wants to allow players to trade in-game for limited resources.

Problem: Developing your own electronic markets is difficult and takes time (ask me how I know). Players farm or mine resources and want to exchange them for rare items, but have no inbuilt exchange methods.

Example: Space simulation games often provide players with mining and resource creation tasks. Fantasy games often have resources players can collect and quests to obtain rare items. The games often have one or more in-game currencies that could be exchanged for the rare or farmed items.

Solution: Each gaming resource has a Market created for it, possibly a Market per game location. Players with items they have mined, created or farmed can exchange these for an in-game currency.

Outcome:

• Players have a goal for their resource creation tasks.
• A meta-game of trading between different Markets becomes possible, adding a layer of complexity to the game.
• Development time is not wasted on trying to build an in-game exchange.

Scenario: You and your friends, colleagues or associates wish to trade amongst yourselves, possibly as independent producers or farmers, possibly directly exchanging products.

Problem: Your country might have a volatile currency or prohibitive trading fees, or a lack of facilities. You might have a local network of people in a similar situation, and it would be more effective to directly exchange goods rather than use a transactional currency.

Example: You are an independent arable farmer and you have a network of similar farmers in your region who want to trade crops, livestock or other products directly with one another.

Solution: You create a Market per combination of goods, for example Wheat vs. Olive Oil, Wheat vs Lamb etc. You invite other Users on the platform that you know, who have goods to trade, to these Markets. You exchange goods directly without using a currency.

Outcome:

• Other farmers in your network might have needs that you were unaware of, that you can fulfil.
• Other businesses like wholesalers could be included, providing stability and liquidity.
• The volatile currency is avoided, and you trade the relative value of the goods directly.

Scenario: Your company has an established and beloved product line and uses limited-edition releases to generate hype and enthusiasm.

Problem: Limited factory special runs of items are costly, but can be very collectible and good marketing. Demand for a particular special edition is unpredictable; one might be incredibly popular, but the next less so.

Example: Your company makes guitars, and each year you release unique colour, specification or finish combinations to keep the product line fresh and in the media. Demand for each new limited edition is unpredictable.

Solution: You create a Market per new limited edition, and open the Market well before the product is released. You allow direct customers and wholesalers to access the Market and place Buy Orders. As the demand becomes visible you can sell at a price that regularises the demand.

Outcome:

• Each limited edition is fully sold through.
• No discounting is required, and there is no need to reveal if a particular edition was unpopular, prices are private.
• Customers obtaining bargains have a chance to use their social media to publicise this at no cost to your business.

Scenario: Your media company sells advertising time-slots on broadcast media.

Problem: Your company must ensure that all slots, including less popular daytime or overnight slots, are filled. Peak-time slots must be sold at the best price to be efficient.

Example: Your company sells 30-second radio time slots, and the number of slots is fixed each day.

Solution: A Market is created per time slot. Each Market can have an expiry time, beyond which it will close. Advertisers are given access to these Markets and can place bids on each slot. The advertisers would be able to see bids from their competitors, and can increase bids where necessary, or pick up cheaper slots as they need. At the deadline before the broadcast time-slot, your company would take the best bid.

Outcome:

• Advertisers would understand why they are charged the rate they are, because they would see the genuine Market.
• Low demand time-slots would find a realistic price based on actual demand.
• All time-slots should be filled, with the high-demand slots maximising returns, and the low-demand slots getting best value returns possible.

Scenario: You run one or more restaurants.

Problem: Demand for tables is peaky, with weekends in high demand, early weekdays in low demand, and events like Valentine's Day causing sporadic peaks. You have a fixed resource that you must optimise, your table space.

Example: Your restaurant charges a booking fee, but this fee might need to be flexible to cope with both high and low demand nights.

Solution: You run a Market for each sitting. The Market expires before the sitting begins. On your website, you allow customers to see Market demand for each sitting, and let them place a bid for the booking fee. Shortly before the sitting begins, you take the best booking fee bids and transact with the diners. The diners now know they will get their table, and your restaurant has a partial payment that covers you if the diners do not show.

Outcome:

• The fixed supply of tables is sold at maximum efficiency, and the restaurant is filled optimally each night.
• Diners become aware of the competing demand, and can see why prices rise at peak times.
• Sales on low demand nights can be increased by having very low booking fees.

Scenario: You are an artisan or craftsman with skills in high demand, but limited work time.

Problem: You need to make sure you are working as often as possible, and charging as much as the Market will bear.

Example: You are a barber with a shop and you have one chair.

Solution: You break your time into slots, and sell each slot in a Market. You allow customers to bid on each time-slot. The customers then see what times are high and low demand, and can choose times that work for their combination of time and cost requirements.

Outcome:

• Demand is spread over the available working time.
• Customers willing to pay more can book the slots they find most convenient.
• Customers who are flexible with their time can book the low demand slots.
• More time is spent working, for best payment, with time when the chair is empty being minimised.

Scenario: You operate an independent hotel.

Problem: You need to ensure that every available room is in use at all times.

Example: Your hotel has to cater to seasonal tourist bookings, outside events, and conferences.

Solution: Each combination of room and night has a Market created for it. The Market expiry can be set so that the room booking is completed the day before. Your website allows customers to place bids to book each room.

Outcome:

• Customers can see when rooms are in high demand, and when demand is low.
• If someone must have accommodation on a particular night, they raise their bid to secure the room.
• Customers who are flexible with their time can choose to book over periods that minimise their costs.
• The hotel maximises room occupancy and the return on the limited resource of room space.