It is critical that the offering of the auction house is not made or enhanced by the business. Airbnb fits the description of a digital auction business model, because it does not own or rent the premises it offers (and its systems are digital even though its offer is physical). Uber in the USA is not an auction house, because it has a contract with its drivers to deliver a prespecified service to customers; and practically speaking neither the driver nor the passenger has a choice in who is partnering with whom for any particular trip.
Customers – Who They Are
The auction house identifies and matches buyers and sellers, and this is the core matchmaking proposition. The auction house may also provide ancillary services such as valuation, that have a different business model, such as product or solutions.
Engagement – Value Creation Proposition
Apart from infrastructure that in the case of a physical auction house is the rental of premises and the furnishings, or in the case of the digital auction house the building of the digital infrastructure, there is no value chain. A retail store is not a match maker, because the typical retail store owns the goods it sells, and so has inventory. From a commercial standpoint, an auction house does not take possession of the goods it sells (but it might do for legal and regulatory reasons at the time of the sale).
Learn more about the Matchmaking Business Model
You identify two or more customer groups and brings them together in your marketplace.
Delivery – Value Chain
The provider uses digital technology to ensure that the capital good performs to standards, is repaired or replaced in anticipation of any breakdown, and is optimised for the customer’s needs at that particular time.
Monetization – Value Capture
The auction house collects a fee from either the buyer or seller or perhaps both parties for transacting a sale.