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What is e-auction?

An e-auction is a transaction between sellers (the auctioneers) and bidders (suppliers in the business to business scenarios) that takes place on an electronic marketplace. It can occur business to business, business to consumer, or consumer to consumer, and allows suppliers to bid online against each other for contracts against a published specification.
This kind of environment encourages competition, with the result that goods and services are offered at their current market value.

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Types of e-auction

Classic reverse auction

Multiple sellers compete to obtain the buyer’s business. The buyer can see all the offers and may choose which they would prefer. Predominantly used for procurement.

English auction

English auctions are where bids are announced by either an auctioneer or the bidders, and winners pay what they bid to receive the object. The most common and straightforward form of e-auction, they’re intuitive, user-friendly, and can help to reduce transaction costs.

Dutch Auction

Dutch auctions start at a high price, which is then incrementally lowered until a buyer accepts the price. The first person to bid wins the auction, which makes them good for quick decisions.

Japanese Auction

Here the buyer sets a high price which decrements at pre-set amounts at pre-set intervals e.g. £500 every 2 hours. If a supplier is happy to provide the goods and services at that price, the transaction then goes ahead.

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