In a normal auction, buyers bid prices up. In a reverse auction the roles swap: one buyer, several sellers, and prices move down. The buyer defines the lots and items, a starting or reserve price, the minimum decrement between bids and the duration. Suppliers, usually already qualified through an RFI or RFP, log in during the event and submit successively lower bids. Each bidder sees enough feedback, such as their rank, to know whether to bid again.
Several formats exist. In an English reverse auction bidders see the leading price and bid below it. A rank-only auction shows each supplier only their position. A Dutch auction runs a clock that lowers the price until a supplier accepts. Most events use auto-extension against sniping: a bid in the last few minutes extends the closing time, so the event ends only when competition has genuinely stopped. Parallel or staggered lots let one event cover many items.
Reverse auctions work best when the specification is fixed, several qualified suppliers can meet it and price is the main differentiator: commodities, packaging, logistics lanes, standard components. They work poorly for complex services, single-source items or relationships that depend on trust, where aggressive price pressure can damage quality or supply. The award should still go through approval, and the auction price should flow into the purchase order or contract without being retyped.
How iProcure handles reverse auction
Auctions is iProcure's eAuction module, and it is shown on sample data today. The demo shows a reverse auction from both sides: bidders see their rank, never a competitor's name, and a late bid extends the close, so nobody wins by sniping. Award approval, decided from the email on a phone, is live today.