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

  • Spaces4Learning Announces Winners of 2025 Product Awards

    Spaces4Learning has just announced the winners of the 2025 Product Awards! The award program recognizes innovation and excellence in products that enhance learning environments in K–12 schools and institutions of higher education.

  • California Middle School Completes Two New Academic Buildings

    Sunnyvale Middle School in Sunnyvale, Calif., recently announced that construction is complete on two new classroom buildings of two stories each, according to a district news release. The new wing will house seventh- and eighth-grade students and is part of a larger campus modernization project.

  • ClassVR Wins Tech & Learning Best of Show at ISTELive 25

    Avantis Education recently announced that its flagship product, ClassVR, won the Tech & Learning Best of Show Award at ISTELive 25 in San Antonio, Texas, according to a news release. The program is designed to celebrate products that are “transforming education in schools around the world and that show the greatest promise for the industry,” and this is the fourth consecutive year that Avantis has claimed the award.

  • Tennessee State University Gains Approval for New Engineering Facility

    Tennessee State University in Nashville, Tenn., recently announced that it has received approval from the Tennessee State Building Commission to build a new engineering building on campus, according to a university news release. The 70,000-square-foot, $50-million facility will play home to the university’s engineering programs and the Applied & Industrial Technology program.