What is Auction Software?
Auction software in procurement is a digital tool
used to run reverse auctions or
e-auctions, where suppliers compete in real time
to offer the lowest price for goods or services that a buyer wants
to purchase.
Key Features of Auction Software:
-
Real-time bidding: Suppliers submit live bids,
often competing to undercut each other’s prices.
-
Automated rules: Set auction types (e.g.,
English, Dutch, Japanese), time limits, and bid increments.
-
Transparency and analytics: Tracks bidding
history and provides post-auction reports for analysis.
-
Supplier management: Allows pre-qualification
and communication with vendors.
Types of Auctions Commonly Used:
-
1. Reverse Auction–
Suppliers lower their prices to win a buyer’s business (most
common in procurement).
-
2. Dutch Auction–
Price drops over time until a supplier accepts the current
price.
-
3. English Auction–
Suppliers increase their bids, used more in asset selling than
buying.
Benefits:
- Drives competitive pricing
- Improves transparency and fairness
- Reduces negotiation time
- Enhances procurement efficiency
