Reverse Auctions: Whose definition will win?

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My last post looked at how interest seems to be starting to re-awaken in reverse auctions.

So I did a google on Reverse Auction to see what came up. The results are very instructive:

  1. Wikipedia’s definition of a reverse auction. Good.
  2. BidJam - One of those “lowest unique bid wins” operations. Ouch.
  3. Autoebid - a site for consumers to run reverse auctions on new cars. Good.
  4. Charlotte’s auction - one of those “lowest unique bid wins” operations. Ouch.
  5. BidLowest2Win – one of those “lowest unique bid wins” operations. Ouch.

If you’ve been fortunate enough not to come across these “lowest unique bid wins” operations then this is how they work. Someone puts up a TV for sale, for example. People who want the TV place bids and pay a fee per bid. The person who placed the lowest unique bid then pays that price to buy the item. Yes, gambling, essentially. 

So of the Top 5 sites found by Google in natural searches to do with Reverse Auctions: 1 is about reverse auctions in general, 1 is about consumer reverse auctions, 3 are gambling sites.

Even Wikipedia’s definition is under assault by the gamblers. The introduction to reverse auctions ends with the following:

(In the past few years mobile reverse auctions have evolved. Unlike B2B reverse auctions, mobile reverse auction is B2C and allow consumers to bid on products for pennies. The lowest unique bid wins.)

The parentheses are Wikipedia’s.  

This tells me a few things:

  1. A Consumer vs Business point. If ever anyone needed more proof that business software isn’t sexy then here you go – the relatively recent consumer view of reverse auctions as a form of gambling seems to be swamping the business view. (The business view takes its cues from the academic literature on the subject. So you could even extend the argument to say that consumer technology is sexy, business technology is less so and academic technology is really dull)
  2. A linguistic point. Whatever we believe about what a “reverse auction” truly is, no-one owns language, so if “reverse auction” comes to mean “gambling” then there’s not much B2B auction providers can do about it. 

So which way will things go? Will the “lowest unique bid wins”-type of gambling sites retreat in the face of an increasing accceptance of the business/academic consensus on what a reverse auction truly is? Or will these “lowest unique bid wins” types of event become so dominant in the public mind that subliminally people file “reverse auction” in the same general area as “poker”?

Will the supply chain definition of reverse auctions become the parenthesis, with the B2C version becoming the main definition?

One thought on “Reverse Auctions: Whose definition will win?

  1. Alan

    I wouldn’t worry, you are right words mean what the user and the context demands they mean. Only when promoting take up, or talking to other practitioners do I use ‘reverse auction’ when I am running events they are auctions.

    I know strictly I am wrong, but no-one has been pedantic enough to call me on it yet. But I have had to explain what I mean by a reverse auction before now.

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