REVERSE AUCTIONING

By:
Rajat Rathore(91042)
Pragati Saraf(91040)
 Reverse Auction

Suppliers

Buyer
 Defining the concept

“Reverse” Auctioning….
An acquisition technique which
allows prospective buyers to
list any item(s) they wish to
buy, and the sellers bid to
provide the best price
 Short History

Reverse auction buzz started with the success of

www.priceline.com. The success story continued
with numerous vortals doing huge business in
their area of specialization.
The first Indian vortal on tea www.teauction.com
had revolutionized the contemporary business
practice of Tea Auctions.
 Reverse Auction

• Suppliers pre-screened and approved.

• Suppliers are issued passwords.

Only suppliers with passwords can participate in the auction

• Offerors are anonymous to all participants see a bidder number,

not the competition’s names.
• Evaluation criterion can be price or best value.
• Interested Suppliers apply online and get approval
 Reverse Auction Process

•Company Posts a Purchase Request

•Company Selects Time Frame For Auction
•Sellers Bid On Purchase Request – New Bids Going Lower
and Lower
•Auction Ends
•Company Contacts Seller to Purchase Product or Service
 
 Does the lowest bidder always win the bid?

No, All purchases are up to the sole discretion of the

Company. Factors which influence Companys may
include but are not limited to: 
Seller’s Capability

Seller’s Reputation Seller’s Quality

Seller’s Location Seller’s Delivery Date

Seller’s Price Seller’s Terms

Offerors Competing can be anywhere in the world…
just need to have Internet access
Bidder 1
Bidder 2
Bidder 6

Bidder 3

Bidder 5 Bidder 4 Bidder 7

 Purpose of this mechanism

 To ease the transition to doing your business over

the Internet.
 To maximize the purchasing power of the company.
 To maximize the negotiating power of the company.
 To find alternative sources of supply.
 Intimation about an action
The company will send complete
information about its adoption of internet
as buying mechanism to world’s leading
exporters.
The approved sellers will be intimated
through email (once data base is set up).
 Cost Savings

•The admistrative cost saving of

finding new sources of supply
•The cost saving in form of fast order
placing
•Lower costs through competitive and
cooperative bids
 Results

• 100% Paperless Process

•Auction and issuance of Purchase Order

completed in less than 1 hour

•Virtual competition

•Best Price/Value For Buyer

THANK YOU