Reverse auction definition: What does reverse auction mean?

What is the reverse auction definition? 

The reverse auction is an online auction in which the roles of buyer and seller are reversed. The buyer solicits bids from sellers and selects the lowest bid. The seller is usually a contractor or supplier who provides a product or service to the buyer. In the reverse auction process, there's competition between many sellers. 

Reverse auctions are used to drive down the price of goods and services. Governments and large organizations commonly use them to procure goods and services.

Reverse auctions have several benefits. They create competition among sellers and result in lower prices. They also increase transparency and efficiency in the procurement process. Reverse auctions also help companies ensure quality production of services/goods, minimize costs, and increase the chances of finding the most suitable supplier. 

Process of Reverse auction 

Here's what the process of Reverse auction looks like: 

• Matching bid standards and ensuring it fulfils the minimum criteria for the reverse auction.

• Assuring participation of at least two qualified vendors with experience.

• Choosing the right software for reverse bidding and clarifying the functionalities. 

• Starting the onboarding and conducting a mock auction.

• Finally, kick-starting the live auction.