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UMNI

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Pricing is Hard

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Status Quo

  1. Cost: Price = Cost + Markup
  2. Competition: ± Competitor’s Price
  3. Customers: Surveys, Market Studies

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It's one of the areas where companies, even big ones, have been making [pricing] decisions mostly on gut feel and past practice.

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- Greg Loewen, LA Times

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Case Study: iPhone X 64GB

Retail: $999

Ebay: Thousands of listings sold from $1,500 to $2,000 near release date

Conclusion:

  1. Resellers exploited a mismatch where demand outpaces supply
  2. The secondary market price is a rich signal for gauging demand

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Innovations

  1. Big data
    1. Demographic Info
    2. Webpage Tracking
    3. Order History
  2. Black Box Dynamic Pricing
    • Increase ticket price as seats fill (eg. airlines)
    • Targeted discounts

3. Crowdfunding

    • Kickstarter
    • Tesla Model 3

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Looking for Equilibrium

“...consumers are more willing to accept prices that they themselves played a role in setting”

- Kelly L. Haws William O. Bearden, Dynamic Pricing and Consumer Fairness Perceptions

Problem: Centralization

People indirectly influence dynamic pricing by willing/unwilling to demand the good for a given price. Companies control the price offering

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Solution: Decentralization

Buy/sell transactions should be transparently available on a ledger. This allows customers to participate in price formation.

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Our Solution - Conceptual

  • Form price consensus in a decentralized way
  • Measure demand explicitly
  • On-chain transparency
  • Give consumers open influence on pricing

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Our Solution - Technical

  • Primary Market (retail) Price Discovery
    • Issue item token to measure total demand
    • Create group token auction to measure price sensitivity
    • Feed results into pricing recommendation smart contract

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Our Solution - Technical cont.

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  • Secondary Market (resell) Price Discovery
    • Floating bid/ask on outstanding tokens via 0x ERC20 exchange
    • Token redeemable for item at any time at retail store

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Demo

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Next Steps

Building out product, deploy beta on testnet

Full integration of 0x protocol

Work with partner stores to do real world testing

Deploy to production network

Disrupt traditional retail sales model on a massive scale

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