A reverse auction is a bidding technique used in outsourcing between buyers and seller, and in which sellers bid one against each other to win the business. This is something used in the contractor and specially in construction business. Also this is used in roofing business, plumbing, electrical work, and other sub contractors areas of commercial and residential construction. If you want to find out the reverse auction meaning, please read ahead. The creation of reverse auctions has never been easier.
When should you do a reverse auction?
Usually a reverse auction is used in the purchase of raw materials, construction materials, components and various materials that are in the construction business and when you want reverse auction bidding. But this can also be done in the house chores, and house services, like plumbing, house cleaning, furniture setup, house renovation and others.
What are some examples of reverse auction?
In general a reverse auction is an auction where the buyers and sellers roles are reversed. Meaning the person posting the auction will be the one that will pay for the service, while the person bidding will be the one getting paid. They actually send a price quote for the service they can provide. Here are some examples of reverse auction:
- construction business or real estate business or construction services, or house renovations. It provides a platform for the buyers and contractors/suppliers to bid and offer the services they have
- public companies and government companies, where they post a project they have , and suppliers will post offers for that project. Whoever bids the lowest, wins the project. The bidding can be open or sealed.
- Dutch auction, where the buyer wants to buy X number of products at a certain price, and then the suppliers will bid with their offers
- building materials reverse auction or reverse auction method fails
For example the freelancer websites are reverse auction types, where the customer will post a quote request and service providers or contractors will post their offer. We have written a case study about creating a website like upwork (a very well known freelancer type of website)
What is a reverse auction software I can use ?
When it comes to software solutions, we have a few choices. The one we prefer is a reverse auction platform which is online in a website or within an internal network. We do have the project bidding theme, that is a wordpress theme and script. And it will offer you all features that you need, and on top we do have some awesome support too.
What is B2B reverse auction?
A b2b reverse auction is a type of auction where the procurement team will source goods or and services to their customer companies. Its basically a way for the procurement teams or companies to bid on requests from companies requesting services or goods.
What are the benefits of a reverse auction ?
There are multiple benefits for a reverse auction, because it forces the procurement teams that participate to offer competitive prices. See a list of the benefits:
- offering the best possible price for the customers
- customer has a chance to choose the best offer that they want
- lowering the costs of customers through bid competition
Reverse Dutch auction
A Reverse Dutch Auction is a type of auction in which the roles of the buyer and seller are reversed. Unlike a traditional Dutch auction where the price starts high and is gradually lowered until a buyer is found, in a Reverse Dutch Auction, the price starts low and is gradually increased until a seller is found.
Here’s a step-by-step process of how a Reverse Dutch Auction works:
- The auction starts with a low price.
- The price is gradually increased over time.
- Sellers (or suppliers) watch the price increase and decide at what price they are willing to sell their goods or services.
- The first seller to accept the current price sells their goods or services to the buyer.
- The auction ends when the buyer’s demand is met or the maximum price is reached.
This type of auction is often used in procurement processes where a buyer is looking to purchase a good or service at the lowest possible price. The competition among sellers often leads to lower prices. And this is very typical for construction projects, and procurement systems.
Look no further for the software to launch a reverse bidding website, and try our project bidding theme. We have an experience of over 10 years since launch of this product and it has been used within thousands of websites. They were ranging from roofing business, to electrical work, house renovation websites, lawn care services and so much more. Read more about how to do an auction website.