Just what is a reverse auction? Be careful the answer is not that easy.

November 19th, 2010

A customer asked me if they could start to use the term e-bid instead of reverse auction for all of the events they are doing because of the negative connotation associated with the word auction.

There has been a lot of discussion about reverse auctions lately in the blogosphere. Most of it has centered on whether or not reverse auctions are strategic or not. Many of you are well aware of my opinion on that subject. What interested me was my customers thought that there was a negative reaction to the term. Guess where it came from? You’re right it came from the buyers which is one of the two places it usually comes from, the other being the suppliers. This normally happens during the early adoption stage of e-procurement tools within a company.

My answer to the question was you can call it what ever you want within your own company but do you know how many kinds of reverse auctions there really are. The answer was no. So listed below are some of the names of different types of reverse auctions. Some apply to specific industries while others are just enhanced versions of a particular type. Probably the most commonly used is the classic Dutch auction.

My question to you e-procurement types out there is how many can you name or better yet define the use of. And if there are so many types with the reason being manipulation of the results in different ways, then maybe reverse auctions are strategic or not.

1. English Auction
2. Multi unit English Auction
3. Yankee Auction
4. Proxy English Auction
5. Classic Dutch Auction
6. Vickrey Auction
7. Japanese Auction
8. Chinese Auction
9. Pay-Your-Bid Auctions
10. Aggregate Demand Auction
11. Negotiated Price Auction
12. Exchange

We look forward to and appreciate your comments.

If you thought this page is useful to your friend, use this form to send.
Friend Email
Enter your message

Leave a Reply