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Definition: a Reverse Auction is a business model in which the role of the buyer and the seller are inverted, mainly with the objective to drive purchasing prices downward. In this procurement process, multiple suppliers compete to win a buyer's business by submitting the lowest price for a product or service. Unlike a traditional auction where bids increase, sellers in a reverse auction submit progressively lower bids in real-time until the buyer accepts the lowest offer. This method is primarily used by large corporations and governments to competitively source goods and services, with the goal of reducing costs. |
More on procurement and purchasing: Buygrid Framework, Kraljic Matrix, Modified Rebuy, Post Purchase Behavior, Procurement Contract Management, more on procurement and purchasing... MBA Brief provides concise yet precise definitions of organizational concepts, management methods, and business models as taught in an MBA program. We keep it short and provide links to high-quality websites where you can learn more about your topic.
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