Forward vs. Reverse Auctions

In a nutshell, there are really only two categories of auctions — forward and reverse auctions. There may be variations with these based on a number of factors, including the progress of the auction and the criteria for determining the “winner” of the auction.

Forward auctions take the form of a single seller offering an item for sale, with buyers competing to secure the item by bidding the price upward. Forward auctions are far-better understood by the public at large than reverse auctions as to how they operate, due primarily to the fact that they are widely used at the consumer level. They are also widely used when the goal is for the seller to receive the most money possible for the item being offered at auction. Thus, a forward auction should be utilized for sales of goods and services of all types, whether conducted online, offline or a hybrid of the two.

Reverse auctions are the other major form of auctions. In a reverse auction, a single buyer makes potential sellers aware of their intent to buy a specified good or service. During the course of the actual reverse auction event, the sellers bid against one another to secure the buyer’s business, driving the price to be paid for the item downward. Thus, the winning bidder is the seller who offers the lowest price. Reverse auctions are most typically used for procurement by private companies, public sector agencies and nonprofit organizations.

Reverse auctions are not a short-term tactic for procurement operations, but are, in fact, a proven method for long-term management of indirect spend — delivering significant savings and process efficiency. For more information on reverse auctions and the procurement process, visit Reverse Auction Research online at www.reverseauctionresearch.org.

Source: Reverse Auction Research (www.reverseauctionresearch.org)

This article originally appeared in the College Planning & Management September 2013 issue of Spaces4Learning.

Featured

  • Pfluger Architects Announces Promotions of Seven Staff Members

    Texas-based architecture firm Pfluger Architects recently announced that it has promoted seven staff members to senior-level positions. One of the promotions is that of Dallas-based Senior Project Architect Chad Martin to Principal, according to a news release.

  • modern college building with circuit and brain motifs

    Anthropic Introduces Claude for Education

    Anthropic has launched a version of its Claude AI assistant tailored for higher education institutions. Claude for Education "gives academic institutions secure, reliable AI access for their entire community," the company said, to enable colleges and universities to develop and implement AI-enabled approaches across teaching, learning, and administration.

  • Image courtesy of Armstrong International

    The Modern Hot Water System Approach to Keep Higher Education Buildings Safe and Operational

    Higher education campuses face unique structural and operational demands. With a range of old and new buildings, a variety of facility types, and ambitious sustainability goals, it's essential that no aspect of infrastructural performance is overlooked. Facility managers must be equipped to provide a safe, reliable and efficient space for students, faculty and guests.

  • Active Learning Classroom

    Striking a Balance: The Keys to Renovating Science Education Buildings for the 21st Century

    The recent renovation of the Durham Science Center at the University of Nebraska-Omaha (UNO) provides a roadmap for facilities managers tasked with balancing budget constraints, modern pedagogical demands, and long-term sustainability.

Digital Edition