A reverse auction is an auction in which sellers compete to sell to a buyer. It is typically part of a sourcing or purchasing process whereby an organization seeks competitive bids on a contract or purchase.
ProcessA reverse auction may involve an extended process whereby a purchaser issues requirements and specifications of their needs. In many cases, sellers will be evaluated for their ability to deliver, quality of products and other factors such as risks before being qualified to bid. The bidding may be conducted with one time blind-bids or may involve open competitive bidding. Specialized procurement software may be used to facilitate the bidding process.
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