Reverse Auction Sites

BidsBull (Reverse online auction in North America)

Grabaseat Reverse Online Auction (Air New Zeland airline auction)

Hamilton County Ohio Reverse Auction (Ohio reverse online auction)

HUD Reverse Auction (HUD Reverse online auction information)

Otilby (Reverse online auction)

Reverse Auctions (Reverse auction)

What is a reverse auction?

Reverse auction is a purchasing strategy that allows businesses to obtain goods and also services at the lowest market pricing. Regular auctions result in increasing incremental pricing, reverse auctions feature decreasing pricing until a single buyer is left who is willing to complete the transaction at the stated price.

There are numerous auction types in the marketplace and each type has its own specific characteristics that the seller and buyer must adhere to. Each auction format defines the “rules of the road“ that both parties must be aware of in order for the transaction to be successfully consummated. These auction rules are valid for online auctions as well as traditional live in person auctions. The revere auction bidding format lets purchasers accepts proposed bids in which the bidder’s cheapest / most advantageous bid towards the purchasing firm will be successful. With a reverse auction, the buying organization can list any item they would like to buy, after which retailers bid to supply the stated item at the best possible price. The buyer decides the precise specifications associated with each product as opposed the terms of the transaction being dictated by the seller.

A very important characteristic of reverse online auctions that could influence the successful sale is the automatic extension of the bidding time period if bidding becomes intense. All reverse online auctions are started with advance notice of the specific auction close time. Early bidding does not provide any benefit to the seller and in fact can be detrimental to the seller because it reveals the seller’s intent to his competitors. Early bidding also signals the buyer there is strong interest for this proposal.Many reverse auctions that have a fixed closing time instances are encountering “sniping” which is the process of submitting bids in the final seconds of the auction closing. Last minute sniping deprives the competition of the ability seeing a bid and undercutting it again.

Auction time extensions can salvage the bidding process for the buying entity by recovering the desirable attributes of reverse auction, namely getting the best possible pricing for your purchase. An auction time extension is generally invoked if there is bidding occurring in the designated final minutes of the auction. As example, if bids are submitted in the final minute of the auction close, time extensions can be allowed by the purchasing entity. The time extension late in the last minute of the bidding proceeds allows bidders the chance to respond to “snipers” and actually helps the buyer achieve an optimal purchase price. A drawback of bidding time extension for sellers is that it actually obligates serious bidders to come back to the auction at closing time and remain active in the bidding process until the “official” auction close.

Businesses with large annual purchasing budgets using reverse online auctions will achieve a lower purchase cost for a set of goods. Reverse auctions definitely allow purchasers to be in a superior position by having more control over the buying process and to achieve the best economies of scale for their purchasing strategy.

Happy Bidding !