Reverse Auctions: An Overview

So, you've heard about reverse auctions, or maybe you want to do one, but pump the brakes. You have a lot of questions and concerns regarding the process, and you want to make sure you have all your bases covered. With reverse auctions, there are a lot of things to keep in mind. Here is a list of concerns that Procurex has heard over the years, and keep in mind, we’ve heard it all:


- What I'm buying in this case really isn't a price only decision.

- I don't think my incumbent vendor will be too happy about having to compete for "their" business.

- I've heard from some of my suppliers that they hate reverse auctions.

- I want to make sure it's fair for the suppliers.

- Some of my suppliers can barely get their email, how can I expect them to bid online?

- This item/category is highly specialized and very few companies can make/provide it.

- I've heard that companies have to pay a fee to the reverse auction provider.

- What if I run the reverse auction and then, for some reason, I can't follow through with a Purchase Order?

- I can't commit a specific quantity or delivery schedule.

- I have to place this order quickly. Do I have time to set up a reverse auction?

- Can suppliers get help while the reverse auction is going on? What if it's only 15 minutes long?

- Is there a way for suppliers to practice on the system before the live reverse auction?

Procurex has an answer for all these questions and concerns, and probably some things you may not have ever thought of. Procurex has grown to master reverse auction and strategic sourcing methods, accompanying customer needs for everything from pizza to coal. In the upcoming posts, we at Procurex will tackle these issues in depth, and even validate the effectiveness of strategic sourcing with specific examples.