The buyer finds a vendor with the capacity to produce parts at the lowest cost. Some smaller vendors, who typically couldn't reach a global market, now can. On average, McVay said, his company's auctions save 17 percent for buyers. But if our auctions can increase their market reach, they may be better able to run their operations at full capacity, therefore reducing unit costs. Indeed, fixed prices are a relatively new phenomenon in the world, having only become the norm in advanced industrial countries over the last century or so.
Bargaining is still common among the majority of people populating the planet.
Likewise, customization at the individual level preceded mass production. The spread of auction-determined pricing and mass customization may take some getting used to, because they will place increasing demands upon our ability to make intelligent choices.