Typically, when we think of online auctions, we picture a computerized bidding process where suppliers and buyers join together for fair commerce. While considering this, we often assume that the E-auction process is straightforward and simple, but after working at some of the most reputable consulting firms in the world, I came to understand that there are typically 6 types of auction/reverse auction techniques that organisations and procurement managers tend to follow:
British Reverse E-Auctions:One of the most popular ways for providers to view their position in relation to other bids or the best pricing is through British Reverse E-Auctions (or both)
Vickery Reverse E-Auctions: Using this method, bidders can instruct the platform to place a bid on their behalf while keeping the suppliers' suggested retail price hidden from the buyers (just like Ebay used to conduct auctions)
Dutch Reverse E-Auctions: An auction style where suppliers can only view a price and a clock. Once the price is claimed, the deal is awarded to the first supplier, and the event is over.
Sealed Bid E-Auctions: These are somewhat akin to E-RFQs in that sealed bids are communicated electronically, and until the event is over, you are unable to view what providers have submitted.
Weighted/Multi Attribute E-Auctions: Using this method, suppliers are free to adjust prices at any time and non-price elements are combined to provide a "total merit score."
Which sort of online auction suits you the best?
When choosing the most appropriate E-auction technique, a number of aspects are taken into consideration, such as:
Analyze your spending. Where are the savings peaks and opportunities? How much of the previous spending was with the existing supplier? Exist opportunities to boost spend consolidation or supplier diversity?
Count the number of eligible bidders. How many participants in your event are you anticipating?
Compensate for market competitiveness. Is there a lot of price competition between suppliers?
Analyze the anticipated bidding strategy. Depending on how you connect with the suppliers, how aggressively will each company approach the bidding process? Are there any particular suppliers that you are aware of as having the capacity to bid significantly less than others, maybe as a result of responses to RFIs and RFPs or pre-bids?
Think about the qualifications' and specifications' consistency. Do any of your eligible bidders have special skills despite your best efforts to standardise the specifications? These can be both beneficial (for instance, superior service) and detrimental (e.g. suspect quality)