E-auction varieties bewilder buyers

19 July 2006
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20 July 2006 | Paul Snell

Buyers could be missing out on big savings because they are using the wrong type of e-auction.

Alan Buxton, production director at e-sourcing firm TradingPartners, told SM 90 per cent of e-auctions are traditional "English reverse auctions", where the price is driven down by suppliers competing for the deal.

But, he added, there are many other types of auction, including Japanese reverse e-auctions, where a third-party or auction manager lowers the bid price; Dutch e-auctions, where the buyer begins with a low price and raises it until a supplier accepts; and multi-attribute e-auctions, where criteria other than price are weighted by the buyer.

Buxton said the last option could be successfully applied to the purchase of services.

He said that, at present, firms are not using e-auctions to buy services such as marketing and consultancy because they do not consider them suitable.

TradingPartners has developed a free game to help buyers understand which auction type to use for goods and services.

SMjul2006

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