FAQs - E-Auctions

What is an ON - LINE REVERSE AUCTION?

A reverse auction is where competing suppliers are invited to bid against each other, visibly and in realtime.  It is a powerful way of reducing costs and /or increasing quality.

• It is a bolt on to a price negotiation and is not an additional task for the procurement (buying) department
• It assists and accelerates the execution of the procurement (buying) process
• It is a secure Internet web based technique
• It is a dynamic and revolutionary manner in which procurement (buying) is progressing

Can an ON - LINE REVERSE AUCTION be used on all projects?
It is not appropriate for all procurement (buying) exercises, for example where it is items are difficult to specify or where there is only one source such as for branded goods.

What is the potential of an On-Line Reverse Auction?
Savings can vary between 1% and 70% but typically are around the 15%-25% mark, but it depends entirely on the circumstances of the individual auction.  What you can be sure of is that the market will be bottomed out and you can proceed into the new contract knowing that you have secured the best deal.   Auctions are an important feature in an efficiency review.

Does the lowest price bid on an ON - LINE REVERSE AUCTION get the business?
No - other factors need to be considered such as quality and service.

Which type of companies can benefit from ON - LINE REVERSE AUCTIONS?
Any company can benefit that wishes to have a lead role and enjoy the benefits of the e - sourcing revolution.