Reverse Auctions Facilitate Wise Buying
Many companies are discovering the value of using reverse auctions to help them make purchases of products and services. While this is a completely different way of buying than many purchasing agents are used to, there are some important traits shared with the tried and true RFP process.
When e-Procurement is facilitated through a reverse auction, buyers will discover these similarities with the standard RFP process:
An ability to gain RFI reports – Buyers are able to do their own vetting of potential vendors during a reverse auction. This enables purchasing agents to be certain of qualifications, skills and quality before moving forward to accept bids.
Capability of spelling out a project entirely – Buyers can still fill out RFP type buying specifications. In fact, a reverse auction’s success pretty much hinges on it. The more detailed and forthcoming buyers are about their needs, the more likely it is incoming bids will fit the bill.
Ability to gain from competition – Just like a standard RFP process, reverse auctions call for bidders to compete against each other. Unlike a standard format, however, reverse auctions open the door on competition even more. In an open auction, bidders can see each other’s proposals and they can respond in kind. This means buyers are more likely to get the lowest possible prices on products and services.
Reverse auctions open the door for companies to make wise purchases. When sellers compete and transparency is involved in a purchase, buyers have little to lose and everything to gain.
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