What the Poseidon Bidding War Tells Us About Selling Cars
This is the story of how a Hollywood producer used auctions to start a bidding war, and what that has to do with selling your car?
The producers of The Poseidon Adventure (1972) decided to auction the TV rights to the movie. Instead of setting a flat price, or negotiating with one network, they made every network duke it out for the first TV showing of the movie.
It’s a bit of a wild ride, but we promise we’ll tell you what this has to do with cars and your money. Buckle up.
How a Sinking Ship Movie Sunk ABC
So in the 1970s ABC paid $3.3 million for 1 airing of The Poseidon Adventure and lost $1 million in the process.
It’s because the movie’s producer, Irwin Allen, started a bidding war for the movie, and they made so much money doing it.
Which is what Carmigo does for cars, but more on that later.
Back to the 70s.
ABC came out hot, with $2 million. It was a competition after all. Then CBS said $2.4 million.
ABC: $2.8 million.
CBS’s then-President Robert Wood has said he knew this was too much, even when he made the bid.
Lucky for him, ABC’s Barry Diller made one more bid — $3.3 million. They bid $3.3 million, knowing that the airing was projected to make closer to $2 million.
Diller immediately vowed, “never again,” when it comes to auctions.
How You Can Start a Bidding War for Your Car
Want to start your own little bidding war for your car? We can help.
Here are the basic reasons why you get more money when you auction your car instead of selling traditionally.
Social proof: A car is only worth what someone will pay for it. But in an auction setting, each bid redefines what the car is worth. The more dealerships bidding, the greater the social proof that your car is actually worth more.
Scarcity: Human beings instinctively value scarcity. The less of something there is, the more we value it. In a Carmigo auction, only one of our many potential bidders can drive away in your car.
Multiple Buyers: A trade-in offer is based on the needs of one dealership. Making the car available to multiple car dealerships with differing inventory needs creates a fairer market price.
Competition: The dealerships bidding on your car are essentially competing for your car. And each bidder is from a different car dealership, so they’re competing in that arena as well.
Time Restriction: Restricting time means that the bidders have less time to process, meaning they rely on faster reaction instincts instead of processing more deeply. In humans, the rational brain is the slower processing part of the brain. Carmigo’s shortened timeline is not only more convenient for sellers, but could serve to increase the money made on their car.
The Carmigo Bidding War
Economics and communications researchers have found that auctions trigger a number of natural human responses that can generate fair-market values for the seller. And sometimes those conditions can benefit the seller by driving the price up.
This doesn’t mean bidders are making bad decisions, it simply means they’re using a different set of problem-solving skills, specifically the ones above. The dealerships bidding on the Carmigo marketplace have been doing this for a long time, so they understand these mental processes too.
But our goal is to make sure the playing field is level. That’s why we built an auction platform where you can get your car in front of lots of dealerships all at once, without ever having to leave home.
We want dealerships to have access to quality cars for their customers.
And we want you to get a fair price for your car without having to drive from one dealership to the other. Or worse, without having to talk to strangers on the Internet.