How Does Reverse Auction Software Work?
Most people assume that an auction software only allows the buyers to be placing bids, but it is possible to setup a web-based program where the bidding is being done by the seller. The software helps to manage the bids, and the sellers are bidding on the projects that are in the marketplace.
Examples of Reverse Auctions
To help you understand this concept, consider a few examples of reverse auctions. For example, the situation where a company needs help with a specific service, so they utilize a reverse auction website in order to require quotes from potential providers. Outsourcing websites, government sites, and certain types of professional services are offered through a reverse auction system.
If you remove the technological aspect, this process is sometimes referred to as a “Request for Quote” or “Request for Proposal.” The reverse auction software makes it easy for a company to request a quote or proposal, because the web application handles many of the major details.
Choosing a Winner
Instead of a standard auction website that determines the winner strictly based on the dollar amount that was bid, a reverse auction software allows you to also consider other factors. The buyer can consider whether the sellers are offering the same exact types of services and products. Looking at the scope that is covered within the proposal helps the buyer to understand the small details within the bid, so that they can get a big-picture view of the proposals before making their decision.
Each seller has a reputation, and the buyer can consider their track record in order to determine how it will impact the project. Since there are often differences between the bids, the buyer is able to consider all factors before selecting a winner from the proposals that have been submitted through the reverse auction software.
How a Reverse Auction Software Can Be Used
The possibilities are endless when it comes to using a reverse auction software. Common uses include businesses or enterprises who want to create a marketplace for specific types of services. One of our clients was wedding.com, which is a marketplace specifically catered to brides who want to get proposals from wedding vendors.
Another example is a marketplace for some type of professional service, such as a lawyer or an accountant. Small business owners can work through your website in order to come in contact with the right professional that can help with the project at hand.
When you install a marketplace on your website using a reverse auction software, you can allow your customers to hire a contractor based on an hourly or fixed rate basis. Certain features allow the buyers and sellers to connect, such as private messages that are sent through the system. All of the funds are paid by the buyer in advance, but those funds are maintained in an escrow account until the seller has agreed to release the funds. This process protects both the buyer and the seller.
Additionally, each buyer can view ratings and feedback before making their selection. When a buyer finds a seller that they enjoy working with, it is easy to rehire that provider with a quick click of a button.
As you can see, there are many advantages to using a reverse auction website. If you want to learn more about the options that are available, then you can contact us because we are always happy to answer your questions.