With increasing online eCommerce websites, the customers are getting attracted to online shopping rather than going to the local shops and with the same reason the eCommerce world had started offering deals. Reverse Auctioning is one such trend which is flourishing in the eCommerce world.
What is a Reverse Auction?
Let me briefly explain you about the reverse auctioning. A Reverse Auction is an event which is implemented on-line with pre-qualified suppliers who are invited to compete on predetermined and published criteria. Mostly, it is similar to a time restricted Request for Proposal. The participating suppliers can check out the best price quoted so far or they can check their own rank compared to the other competitors. On the other hand it allows bidders to be contained within a single database, while offering an easy comparison of current bids from the vendors. In short you can buy whatever you want, be it cctv cameras, furniture etc. at the best price.
Let me now take you through 4 main reasons, why Reverse Auction is beneficial to buyers.
- Best available Market Price.
Firstly, reverse auctions are very useful to get the best available market price at the time of the bid. Most of the times, a reverse auction will result in a cheap rates paid than traditional sealed bids or negotiations. It is possible that the savings are sometimes difficult to accurately measure, and when some product costs are “concealed” (set up plywood prices, change costs, etc.), Companies implementing this technique in standard reverse auctions are often experiencing 10% or rather more real cost savings. Whether you use the latest price paid or bid price reduction, you can exactly track, report and post the results to all vendors within no time after the event is complete.
- Process Improvement
Reverse auctions help in making the process easy though it requires special care be taken to provide accurate specifications and evaluate the perfect historical spend information which helps you to better forecast your demand to interested vendors. This will improve your productivity for future competitive bids since you will have quick access to the information in the future. Reverse auctions can reduce the negotiation time from weeks to minutes. Upon that you will be able to easily duplicate the bid package if you would like to run similar reverse auction events in the future.
- Bid Transparency
Another main advantage to bidders is transparency. Reverse auctions can be used as a transparent reporting tool for all bids that are accepted. Online bidding systems can normally save all data for fast report generation. In some case, the live event can be seen in real time by interested vendors from any internet connection in a conference room. Moreover, reverse auction systems are web-based, allowing interested buyers and sellers to log into the system. One can easily compare best tiles price for purchase sitting at home.
- Suppliers from Worldwide
Last but not least, being a buyer, you can extend your search for new potential suppliers from around the world. When you participate in online reverse auctions, you will be able to post the bid on the website which will attract more suppliers to compete for your business. You have to just pre-qualify the suppliers, but the more number of suppliers will increase the competition for your purchase, which in turn drives bid prices down.
Many people that currently perform competitive bidding will be able to witness the value of the reverse auction process. You can save time and money by doing it right. So don’t miss out the advantage to connect and contract faster with the suppliers by using reverse auctions.