Administrative / Plan / 6
Third-Level Data Repositories
Technically, a large part of Phase III is a commodity exchange, meaning it is an organized market where future delivery contracts for graded commodities (pieces, sets, catalogs, etc.) are bought and sold. What this means to LEGO enthusiasts is that they have an organized and consistent venue for buying items they need and for selling items to people in need. Additionally, they have an organized and consistent venue for barter (trades). At the core of the LUGNET marketplace is a tracking system where a member can, while browsing product information, click a checkbox to mark that product as being desired by them, or for sale by them, or for barter with them. In the context of auctions, such tracking saves people huge amounts of time since they are no longer forced to scan dozens of auction listings per month looking for things which may interest them, thus greatly reducing the risk that they may miss out on something. The tracking system will be implemented using so-called triggers in an active database, so that anyone offering a given item for sale will immediately cause potential buyers to become aware of that item, and anyone seeking a given item can readily find all sellers. Conversely, anyone seeking to purchase a given item will immediately cause potential sellers to become aware of that need, and anyone selling a given item can readily find all potential buyers. The degree to which personal desires become public is a personal decision; items can be marked (conceptually, not literally) "I need this, but don't tell anyone" or "Hey, does anyone have this for sale?" or "Is anyone looking for that set I saw in the store yesterday?" or a number of other conceptual possibilities. A powerful, integrated transaction facilitator forms the backbone for organized commerce
     Beyond simple transaction facilitation is a commerce subsystem for running auctions and reverse auctions. In a traditional auction, a seller publishes a list containing any number of independent lots of items which he or she has for sale. Bids on the lots are solicited and tallied for a period of time, and the bidders who have placed the highest bids by the time the auction closes win the right to buy the lots they won at the agreed price. Conversely, in a reverse auction, a buyer publishes a list of items he or she wishes to buy rather than sell. Like a regular auction, bids are solicited and tallied, but this time the bidders who have placed the lowest bids win the right to sell at the agreed price. Reverse auctions are very useful where there is an abundance of a given item and a buyer wants to obtain a copy of that item for the best possible price. Regular auctions are very useful where there is a rarity of a given item and a seller wants to fetch the best possible price for that item, or at the other extreme, where an item is so unpopular that it is offered for next-to-nothing just to get rid of it, but still to fetch the best price. Auctions and reverse-auctions can be held by anyone
     At least four types of auction content models will be available to the community: Piece Auctions, in which the seller purchases a number of sets through retail channels and redistributes the constituent pieces throughout the community; Set Auctions, in which the seller offers older, hard-to-find sets; Catalog Auctions, in which the seller offers older, hard-to-find catalogs, or rare out-of-the country catalogs; and Miscellaneous Auctions, in which the seller can offer any LEGO-related item, for example LEGO Idea Books or LEGO watches or rubber LEGO-brick erasers. The first three of these will be integrated tightly into the Phase II data repositories, so that bidders can see pictures and learn a little more about what they're bidding on, and look at the prices people have paid for the same or similar items in the past. Several auction content models are available
     The auction server will be capable of running autonomously 24 hours a day, 7 days a week, and it will provide immediate bid feedback to participants. Auctions run unattended
     Repositories for the Catalog Market, the Set Market, the Piece Market, and other Miscellaneous Markets will tie into a main Market repository, which will tie into the Annotations repository for tracking various details such as average selling price and total quantity ever sold. Each market tracks a specific set of data over time
     Over four years have passed since LEGO enthusiasts started gathering in numbers on the Internet, and still today there is no "blue-book" of prices, even though hundreds of hard-to-find building sets trade hands each year. Why no blue-book? Because there is currently no standardized auction format, and therefore no way to capture raw data -- except through labor-intensive means, and people prefer building and playing to labor-intensive data acquisition. LUGNET can help here: A repository of Price Guides accumulates as auctions are run and simple straight sales are transacted through LUGNET. Over time, these guides become a comprehensive blue-book -- for many, an indispensible resource, and for everyone else, a way to reduce clutter in discussion groups, since people will no longer have to broadcast "How much is xyz worth?" every time they are curious. Commerce is tracked and fed into a "blue-book"
     Any system which tracks prices paid and helps people engage in after-market barter or sales is incomplete without a grading system, since people are often willing to pay more for something in brand-new condition than for the same thing in average or poor condition. Using a handy, integrated Phase III feature, people can learn what they might expect to pay, for example, for a moderately used Australian Federal Railways "crocodile car" with somewhat wrinkled original instructions and no box, or for a never-opened copy of the same building set with very slight shelf-wear. Although all possible permutations of conditions could be tracked in exhausting detail for each item ever sold, it is likely that doing so would result in more data than is necessary or useful. (People tend to prefer simplicity to complexity when faced with a heap of data and a quick decision to make.) The LUGNET grading system will probably be category-based and consist of a set of condition categories for each type of object tracked (for example pieces, packaging, and other paper items) and a set of completeness categories or factors for composite objects (for example building sets). For example, one possibility is a 10-point amalgam of comic book grading systems:

  • Pristine-Mint
  • Mint
  • Near-Mint
  • Very-Fine
  • Fine
  • Very-Good
  • Good
  • Fair
  • Poor
  • Junk
Each condition contains detailed explanations in the relative object contexts. That is, when applied to building set boxes, these conditions contain information about scratches, tears, dents, price-tag sticker residue, and so forth. When applied to pieces, these conditions contain information about gloss, dust, fingerprints, nicks, cracks, warps, yellowing, and so forth. And when applied to various paper items such as catalogs and building instruction booklets, these conditions contain information about gloss, folds, tears, spine cracking, pen marks, and so forth. Another grading system which might work is one based on the simple 13-point grading system popular in many primary schools: A+, A, A-, B+, B, B-, C+, C, C-, D+, D, D-, and F. Simplicity aside, however, a single-letter system with + and - modifiers may be confusing to newcomers in that "F" is equivalent not to "fair" but to "junk." Another danger is that people may use "A+" when they really mean "A," whereas the "pristine" prefix on "mint" is designed to discourage the popular misconception that "mint" (i.e., "fresh from the mint") is the best possible condition. In either case, an additional condition is needed for "new," meaning "it's brand new but the condition is not guaranteed to be mint or better." This need arises because it is not altogether unheard of for a brand-new, still factory-sealed building set to contain a transparent piece with a micro-scratch or a light-colored piece with a dark-colored imperfection streak in the plastic. "New" is the condition that all brand-new piece-auctions implicitly carry. Modifiers such as opened and unopened will also apply to composite objects such as building sets. Note also that a building set can have been opened but with the pieces still in the holey plastic bags. A set like this would be characterized as neither "opened" nor "closed" but perhaps as "box-opened and piece-closed." This high level of detail may border on esoterica in a blue-book context, but is quite practical in a pre-sale context.
A grading system keeps details straight
     To minimize catastropies of ignorance, dishonesty, or inexperience, a public tracking and annotation system will be implemented in which both good and bad experiences can be relayed throughout the marketplace. It is important to realize that in an unrestricted marketplace, a single person could, very easily, sell hundreds of people short, ruining all of the fun in the marketplace and creating an atmosphere of distrust and paranoia. (Something like this on a small scale has, in fact, apparently happened recently in, which is an unrestricted marketplace.) For the LUGNET marketplace to be successful, it must contain checks and balances to minimize (and hopefully eliminate) catastrophes. Sellers of large quantities of items, such as auctioneers, will go through a continual "proving" period where more and more "rope" is let out by the system as each subsequent sale is completed without havoc. Some may consider this to be a cesspool of nonsense, but something must be put into place to protect and inform buyers and to keep the marketplace as safe as possible. Sellers demonstrating previous success and a good reputation outside the community may be granted a higher initial quota for their first auction. Checks and balances will minimize (and hopefully eliminate) catastrophes in the marketplace
     Another reason for quotas (or limits) is because, as the community grows, there will be an ever-increasing number of new members who have never before conducted an auction, nor who have even seen an auction, and who do not understand how much work an auction can be, especially a piece-auction. Indeed, the auction software is so powerful that it just as easy to run a one million piece auction as it is to run a one thousand piece auction (at least, in terms of registering bids -- but therein lies the problem). Additionally, the software is also so powerful that it permits sellers to sell pieces which they do not yet even have in their possession, since the exact contents of each broken-down set is pre-known by the system, assuming it has been entered into in the Piece Inventories repository. This system may be so efficient, so powerful, and so seductive to some that they may take enormously naïve risks which end up hurting the community or even ending in lawsuit. Clearly, a system of checks and balances is critical to the success and stability of the marketplace, and imposing limits on sales is one method of achieving these checks and balances. Additional market protection may be provided by third-party escrow or insurance services, although these are unlikely to penetrate the market in a meaningful way unless they are free or mandatory (in other words, although they provide personal protection to buyers, they do not protect the marketplace as a whole). Additional reasons for checks and balances are quite compelling
     Auctioneers can exercise discretion over who is allowed into their auctions, if they so choose. By default, the system asks auctioneers to approve the participation of each bidder, giving the auctioneer choices such as the following:
  • "Let this person bid in my auction."
  • "Don't let this person bid in my auction."
  • "Let this person bid in my auction but limit their spending to $x."
  • "Always let this person bid in my auction."
  • "Never let this person bid in my auction."
  • "Let this person bid in my auction but require pre-payment before accepting any bids from them."
Choices like these allow auctioneers to look someone up and learn a bit about them before letting them just jump in and start bidding with reckless abandon. Some of these choices also save auctioneers time in future auctions since the system learns their preferences. If an auctioneer chooses to disable these protections, there will probably still be blanket criteria available such as "This auction is open to anyone who is 18 years of age or older" and "This auction is open only to people in my country because I don't want to hassle with shipping things overseas or through customs."
Auctioneers can approve bidders individually

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