An e-auction or an electronic auction is a procedure in which a firm looking for some goods or services issues request for bids and providers can then submit their best price proposals online. The procedure starts with a brief survey to collect essential information from suppliers. Once the buyer has compiled a shortlist of suppliers, they may select a day and time for the auction and make it live. Suppliers will be able to bid against one another during the e-auction until the lowest offer is made. eAuctions allow businesses to reduce costs and time required for supplier quote negotiations.
An eAuction is to be used when the chances of industry competition are very high and there are many suppliers providing the product or service. eAuctions are most suited for high-volume purchases. It is an ideal option if the supplier relationship need not be strategic and the supply lead time is very less. It is mostly utilized for negotiated and limited public procurement procedures, as well as by multiple buyers consolidating their requirements.
