Procurement Glossary & Terminologies

Glossary / Letter E / e-Auction


eAuction is a procedure whereby a buyer pre-qualifies numerous suppliers and asks them to take part in a web-based sourcing event with a set time limit.


A key advantage of an electronic auction is the elimination of the physical constraints of a traditional auction, which requires participants to be physically close to one another and significantly reduces the possible audience.

With automated bids, search engines to locate products, and the option to explore items by categories, online auctions provide users with benefits that traditional auction forms do not. In addition to these advantages, internet auctions have substantially expanded the range of products and services that can be purchased and offered in an auction style.

Types of e-auction

1. Classic reverse auction: It involves multiple sellers vying for the buyer’s business. The buyer can view all offers and select the one they want. They are used primarily for procurement.

2. English auction: In English auctions, bids are announced by the auctioneer or the bidders, and the winning bid is the price at which the item is purchased. They are the most popular and straightforward type of e-auction, and they can lower transaction costs since they are simple, intuitive, and user-friendly.

3. Dutch auction: Prices at Dutch auctions begin high and are progressively reduced until a buyer accepts the price. They help make quick selections because the highest bidder wins the auction.

4. Japanese auction: In this type, the bidder sets a high price that decreases over time by predetermined amounts.

Key Success Factors for any eAuction

  1. Check to see if the level of competition is appropriate.
  2. The key is preparation: vendors vetted for quality, transport, etc.
  3. Information from RFIs and RFQs is clear and stays the same while being set up.
  4. Let everyone know well in advance to reserve times for the live auction and training
  5. Ask the provider to confirm the starting prices and value lots.
  6. There should be no question that the supplier won the auction and the contract.

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